ADVANCING
SUSTAINABILITY
ACCELERATING
GROWTH
Annual Report 2021
ADVANCING
SUSTAINABILITY
ACCELERATING
GROWTH
We are advancing sustainability, making
it our business with a focus on energy
& environment, urban development,
connectivity and asset management.
Under Vision 2030, we are accelerating
growth through an asset-light model,
harnessing technology and working
with like-minded partners on
solutions to drive sustainable
development and create value
for our stakeholders.
VISION
A trusted global company building
a sustainable future.
MISSION
We deliver solutions for sustainable
urbanisation safely, responsibly
and profitably.
GROUP OVERVIEW
Key Figures
Group Financial Highlights
Global Presence
Chairman’s Statement
Interview with the CEO
Vision 2030 in Action
— Highlights of Achievements in 2021
— Focus Areas in 2022
— Technology and Innovation
— Collaboration and Integration
Ecosystem for Value Creation
Sustainability Framework
Board of Directors
Keppel Group Boards of Directors
Keppel Technology Advisory Panel
Senior Management
Investor Relations
PERFORMANCE REVIEW
Operating & Market Review
— Energy & Environment
— Urban Development
— Connectivity
— Asset Management
Financial Review
Group Structure
2
3
4
6
12
18
21
22
24
26
28
34
38
40
42
44
46
48
54
58
62
66
75
GOVERNANCE
Corporate Governance
Risk Management
Regulatory Compliance
FINANCIAL REPORT
Directors’ Statement
Independent Auditor’s Report
Balance Sheets
Consolidated Profit and Loss Account
Consolidated Statement of
Comprehensive Income
Consolidated Statements of
Changes in Equity/Statement of
Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Significant Subsidiaries, Associated
Companies and Joint Ventures
OTHER INFORMATION
Interested Person Transactions
Key Executives
Major Properties
Group Five-Year Performance
Value-Added Statements
Share Performance
Shareholding Statistics
Notice of Annual General Meeting
and Closure of Books
Corporate Information
Financial Calendar
76
110
114
118
123
132
133
134
135
138
141
207
215
216
221
227
232
233
234
235
241
242
GROUP OVERVIEW
KEY FIGURES
2
REVENUE
$8.6b
NET PROFIT
$1.02b
Increased 31% from FY 2020’s $6.6 billion.
Higher contributions from all segments –
Energy & Environment, Urban Development,
Connectivity and Asset Management.
Compared to FY 2020’s net loss
of $506 million.
All segments registered improved
year-on-year performance in FY 2021.
MSCI ESG RATING
AAA
Retained the highest AAA rating in the
Morgan Stanley Capital International
(MSCI) ESG ratings in December 2021.
Ranked among the top 8% of global
industrial conglomerates, based on
environmental, social and governance
(ESG) criteria, in the MSCI All Country
World Index. Keppel has held the rating
since February 2020.
RETURN ON EQUITY
EARNINGS PER SHARE
EMPLOYEE ENGAGEMENT SCORE
9.1%
$0.56
Compared to negative 4.6% for FY 2020.
Improvement in Return on Equity for
FY(cid:632)2021 corresponded with the
net(cid:632)profit achieved.
Compared to loss per share
of $0.28 for FY 2020.
Net profit of $1.02 billion for FY 2021
translated to earnings per share of $0.56.
84%
This was higher than Mercer’s global
average of 80%.
CASH DIVIDEND PER SHARE
NET ASSET VALUE PER SHARE
COVID-19 RELIEF EFFORTS
$6.41
Increased 9% from FY 2020’s
$5.90 per share.
$5.5m
Disbursed since the start of the pandemic
to support affected communities in
Singapore and overseas.
FREE CASH INFLOW
$1.75b
Compared to FY 2020’s outflow
of $72 million.
This was mainly due to cash proceeds
from asset monetisation, higher dividend
income, as well as lower investments
and capital expenditure, partly offset
by higher working capital requirements.
WORKPLACE SAFETY AND
HEALTH AWARDS
18 Awards
Clinched at the WSH Awards 2021.
Keppel achieved its zero-fatality target
in 2021, and saw improvements across
its Total Recordable Injury, Accident
Frequency and Accident Severity Rates.
33.0 cents
More than triple FY 2020’s cash dividend
of 10.0 cents per share.
Total distribution for FY 2021 comprises a
proposed final cash dividend of 21.0 cents
per share, and an interim cash dividend of
12.0 cents per share.
NET GEARING RATIO
0.68x
Decreased from FY 2020’s net gearing
of 0.91x.
Net gearing decreased mainly due to
reduced net debt as well as a higher
equity base. The decline in net debt
was mainly driven by cash proceeds
from asset monetisation. Strong earnings
growth and the issuance of perpetual
securities in FY 2021 led to higher
capital employed.
Keppel Corporation Limited
GROUP OVERVIEW
GROUP FINANCIAL HIGHLIGHTS
3
GROUP HALF-YEARLY RESULTS ($ million)
Revenue
EBITDA
Operating Profit/(Loss)
Profit/(Loss) before Tax
Attributable Profit/(Loss)
Earnings/(Loss) per Share (cents)
For the year ($ million)
Revenue
Profit
EBITDA
Operating
Before Tax
Net Profit/(Loss)
Operating Cash Flow
Free Cash Flow
Economic Value Added (EVA)
Per share ($)
Earnings/(Loss)
Net Assets
Net Tangible Assets
At year end ($ million)
Shareholders’ Funds
Perpetual Securities
Non-controlling Interests
Total Equity
Net Debt
Net Gearing Ratio (times)
Return on shareholders’ funds (%)
Profit/(Loss) before Tax
Net Profit/(Loss)
Shareholders’ value
Distribution (cents per share)
Interim Dividend
Final Dividend
Total Distribution
Share Price ($)
Total Shareholder Return (%)
n.m.f. denotes no meaningful figure
2021
2H
1H
3,677
4,948
385
188
516
300
920
710
819
723
16.5
39.7
Total
8,625
1,305
898
1,335
1,023
56.2
2020
2H
1H
Total
3,182
3,392
6,574
52
(149)
(357)
(537)
(29.5)
370
157
102
31
1.7
422
8
(255)
(506)
(27.8)
2021
2020
% Change
8,625
1,305
898
1,335
1,023
(275)
1,750
204
0.56
6.41
5.53
11,655
401
385
12,441
8,400
0.68
12.0
9.1
12.0
21.0
33.0
5.12
(1.5)
6,574
422
8
(255)
(506)
202
(72)
(1,368)
(0.28)
5.90
5.02
10,728
–
428
11,156
10,123
0.91
(2.4)
(4.6)
3.0
7.0
10.0
5.38
(18.6)
31
209
>500
n.m.f.
n.m.f.
n.m.f.
n.m.f.
n.m.f.
n.m.f.
9
10
9
n.m.f.
-10
12
-17
-25
n.m.f.
n.m.f.
300
200
230
-5
-92
Annual Report 2021
GROUP OVERVIEW
GLOBAL PRESENCE
4
TOTAL FY 2021 REVENUE
$8.6b
Markets outside of Singapore
contributed about 42% of the
Group’s revenue for FY 2021.
7
5
4
6
1
2
3
5
1 ASIA (EX SINGAPORE)
$1,824m
• China
•
•
India
Indonesia
• Japan
• Malaysia
• Myanmar
• The Philippines
• Republic of Korea
• Vietnam
2 SINGAPORE
$5,029m
3 AUSTRALIA
$61m
4 MIDDLE EAST
$92m
• Qatar
• The United Arab Emirates
5 EUROPE
$574m
• Belgium
• Germany
•
Italy
•
Ireland
• The Netherlands
• The United Kingdom
6 SOUTH AMERICA
$552m
• Brazil
7 NORTH AMERICA
$493m
• The United States
Keppel Corporation Limited
Annual Report 2021
GROUP OVERVIEW
CHAIRMAN’S STATEMENT
6
7
ADVANCING
SUSTAINABILITY
ACCELERATING
GROWTH
We are accelerating the execution of
Vision 2030, our long-term strategy to
guide the Group’s transformation and
growth as one integrated company.
DEAR SHAREHOLDERS,
2021 marked an inflection point for the
global(cid:632)economy, as it gradually rebounded
from the depths of the COVID-19 crisis.
Based on the projection by the International
Monetary Fund, the global economy grew
by(cid:632)5.9% for 2021, but growth is expected
to(cid:632)slow to 4.4% for 2022, reflecting
the(cid:632)myriad challenges that the world
continues to face today, including
geopolitical tensions, the continuing
impact(cid:632)of COVID-19, supply disruptions
and(cid:632)inflation.
Despite the volatile environment, Keppel
delivered strong performance, as we
accelerated the execution of Vision(cid:632)2030,
our long-term strategy to guide(cid:632)the Company’s
transformation and(cid:632)growth as one integrated
company providing solutions for sustainable
urbanisation. We have set and announced
specific financial and non-financial targets
for the Group, including transforming and
focusing our business, asset monetisation,
growing recurring income, as well as
working towards the mid to long-term
Return on Equity (ROE) target of 15%
per(cid:632)annum.
As part of Vision 2030, we have also put
sustainability at the core of our strategy.
This includes both how we run our business,
and advancing growth by making sustainability
our business, through providing solutions
that contribute to sustainable development
and combatting climate change.
DELIVERING STRONG
FINANCIAL PERFORMANCE
In FY 2021, Keppel Corporation made a
net(cid:632)profit of $1.02 billion, a sharp reversal
from the loss of $506 million in FY 2020,
and(cid:632)the highest net profit the Group has
made in the past six years, since the start of
the downturn of the offshore & marine (O&M)
sector. Our ROE improved to 9.1% for FY(cid:632)2021,
a marked improvement not only from
negative 4.6% in FY 2020, but even
compared to the 6.3% in pre-pandemic
FY(cid:632)2019. Our recurring income also grew
33% year-on-year to $292 million.
DANNY TEOH Chairman
We will be paying out a total cash dividend
of 33 cents per share for the whole of 2021,
more than three times the total cash dividend
of 10 cents for 2020.
With our successful asset monetisation
programme and the enlarged equity base,
net gearing fell to 0.68x as at end-2021,
compared to 0.91x at end-2020. Free
cash(cid:632)inflow was $1.75 billion, a sharp
improvement over the outflow of
$72 million(cid:632)in FY 2020.
Taking into account the strong performance
of the Group, the Board of Directors has
proposed a final cash dividend of 21.0 cents
per share. Together with the interim cash
dividend of 12.0 cents per share, we will
be(cid:632)paying out a total cash dividend of
33.0(cid:632)cents per share for the whole of 2021
– more than three times the total cash
dividend of 10.0 cents for 2020. This
represents a gross dividend yield of 6.4%
on(cid:632)the Company’s last transacted share
price of $5.12 as at 31 December 2021.
In January 2022, we also announced our
$500 million Share Buyback Programme.
Shares repurchased will be held as
treasury(cid:632)shares which will be used in
part(cid:632)for(cid:632)the annual vesting of employee
share plans, and importantly, also as
possible currency for future merger and
acquisition (M&A) activities.
TRANSFORMING AND
RE-FOCUSING OUR BUSINESSES
Over the past year, we announced a series
of initiatives and proposed transactions to
simplify and focus our business and grow it
in line with Vision 2030.
Two of these transactions are currently
still(cid:632)being negotiated, namely the proposed
combination of Keppel Offshore & Marine
(Keppel O&M) and Sembcorp Marine,
together with the resolution of Keppel O&M’s
legacy rigs, and the proposed divestment
of(cid:632)our logistics business in Southeast Asia
and Australia.
The decision to commence discussions on
the proposed combination of Keppel O&M
and Sembcorp Marine was not an easy one
for Keppel, given the Company’s heritage in
and strong association with the O&M sector.
But the Board and management believe that
Keppel Corporation Limited
Annual Report 2021
9
ASSET MONETISATION
$2.9b
Announced from
4Q 2020 to end-2021.
GROUP OVERVIEW
8
CHAIRMAN’S STATEMENT
Having landed on our long-term strategy,
we are now committed to accelerating
growth, and realising our Vision 2030
targets by 2025.
this is an important and necessary strategic
move amidst the global energy transition
and structural challenges facing the sector.
If we are successful in executing the
combination, I believe we would not
only(cid:632)create a stronger combined entity,
leveraging the strengths of the two
companies, but also significantly sharpen
Keppel’s focus, simplify our business
and(cid:632)trigger a re-rating of the Company.
The rationale for the proposed divestment
of(cid:632)the logistics business is clear, given
our(cid:632)plans to be more disciplined, and
to(cid:632)focus on needle-moving businesses
aligned to our long-term strategy.
In 2021, we also announced the proposed
acquisition of the Singapore Press Holdings
(SPH) portfolio. We are grateful to shareholders
for your overwhelming support at the
Extraordinary General Meeting in December
2021. As Keppel has commenced arbitration
proceedings, I will not comment further
on(cid:632)this matter, except to highlight that
the(cid:632)proposed acquisition was in part
opportunistic, given SPH’s plans to
restructure and divest its non-media
business. Apart from the SPH portfolio,
we(cid:632)are also exploring other exciting M&A
opportunities, as we continue to grow
Keppel’s business in line with Vision 2030.
Beyond business transformation at
the(cid:632)portfolio level, we have also been
driving(cid:632)innovation and transformation
in(cid:632)each business unit, whether it
is(cid:632)Keppel(cid:632)Infrastructure’s rollout of
Energy-as-a-Service, Keppel Land’s pivot
from a traditional developer to be an
asset-light urban space solutions provider,
or M1’s digital transformation.
PURSUING GROWTH AT
SPEED(cid:632)AND SCALE
The world is changing rapidly, with
technological advancement and macrotrends
such as urbanisation, digitalisation,
climate(cid:632)change and the(cid:632)energy(cid:632)transition
both disrupting businesses and creating
new opportunities.
Vision 2030 was developed in response
to(cid:632)many of these macrotrends, a number
of(cid:632)which have been further accelerated
by(cid:632)COVID-19 and growing concerns about
climate change. Importantly, Vision 2030
is(cid:632)not a static document cast in stone.
We(cid:632)will closely monitor the evolving
operating environment and adjust our
strategy and business model to ensure
we(cid:632)remain competitive and relevant,
and(cid:632)well-placed to create value for all
our stakeholders.
Keppel has announced renewables projects with a total capacity of 1.1GW, including the acquisition of a majority stake in leading solar platform Cleantech Renewable Assets.
(In picture: One of Cleantech's assets in Singapore)
M1 continues to roll out its 5G Standalone (SA) network, which achieved 50% outdoor coverage in Singapore as
at end-2021.
We will also focus on driving growth in
terms of both speed and scale. When we
first set out to draft Vision 2030, a longer
time frame was deliberately chosen to
give(cid:632)our younger business leaders a
longer(cid:632)runway to boldly envisage a
different(cid:632)future Keppel. Having landed
on(cid:632)our long-term strategy, we are now
committed to accelerating growth,
and(cid:632)realising our Vision 2030 targets
by(cid:632)2025.
We are also exercising firm discipline in
capital allocation. Instead of being a highly
diversified conglomerate, we will be more
selective about the businesses we are
involved in. We will double down and scale
up in our chosen areas, and not be engaged
in too many sectors.
SHARPENING THE USE OF
OUR CAPITAL
We are adopting an asset-light business
model, as can be seen from our asset
monetisation programme, as well as our
efforts to tap third-party funds for growth.
Since the launch of the asset monetisation
programme, we announced $2.9 billion
of(cid:632)asset monetisation from 4Q 2020 to
end-2021, and received about $2.7 billion
in(cid:632)cash over this period, thus freeing up
our(cid:632)balance sheet to fund new pursuits and
also reward shareholders. We are confident
of exceeding our asset monetisation target
of $5 billion by end-2023; but we will not
stop there. Asset monetisation will be a
key(cid:632)part of Keppel’s business model and
ecosystem for value creation going forward.
We have also pivoted away from
relying(cid:632)mainly on our balance sheet for
new(cid:632)projects, a recent example being
Keppel(cid:632)Corporation’s collaboration with
Keppel Asia Infrastructure Fund (KAIF)
and(cid:632)a(cid:632)co-investor of KAIF to acquire a
majority stake in Cleantech Renewable
Assets, a leading solar platform.
Our Asset Management business will be
an(cid:632)increasingly central pillar for the Group,
not just as a vertical yielding recurring fee
income or as a platform for capital recycling,
but as a “horizontal” that brings the Group
together to collaborate and hunt as a pack,
working alongside third-party investors to
expand our capital base.
HARNESSING TECHNOLOGY IN
THE(cid:632)PRESENT AND FOR THE FUTURE
We are also investing in technology, a
key(cid:632)enabler of Keppel’s future growth.
This(cid:632)is driven both centrally, with valuable
inputs from our Keppel Technology Advisory
Panel, and also in each of our business
units. For example, Keppel Infrastructure is
collaborating with partners to explore various
clean energy and decarbonisation solutions;
Keppel Land is focusing on smart and
sustainable buildings; M1 is rolling out its
5G(cid:632)Standalone network and 5G use cases;
while Keppel Data Centres is exploring
ways(cid:632)to reduce the carbon footprint of
data(cid:632)centres. We have also stepped up
our(cid:632)investment in start-ups and venture
capital funds to gain early access to
intellectual property and technology,
and(cid:632)build new capabilities. Some of the
innovative solutions we are exploring, such
as energy-efficient floating data centres,
can(cid:632)be commercialised fairly soon, while
others such as carbon capture, utilisation
and storage, will take more time to materialise.
But we have started the journey, with an eye
on the future.
Keppel Corporation Limited
Annual Report 2021
GROUP OVERVIEW
10
CHAIRMAN’S STATEMENT
11
VOLUNTEER HOURS
>12,000 hrs
Of community outreach and
service by Keppelites globally.
PUTTING SUSTAINABILITY AT
THE CORE OF STRATEGY
2021 was also a year in which we made
significant progress in our sustainability
journey. Ahead of the United Nations
Climate Change Conference in Glasgow,
we(cid:632)announced our commitment to
halve(cid:632)the(cid:632)Group’s Scope 1 and 2 carbon
emissions by 2030, compared to 2020
levels, and achieve net zero by 2050.
Achieving this target would require us to
pay(cid:632)close attention to the carbon footprint
of(cid:632)our businesses, including the M&A
opportunities we explore, and how we
harness renewable energy and improve
the(cid:632)energy efficiency of our assets.
Since 2020, we have committed to support
the recommendations of the Task Force
on(cid:632)Climate-related Financial Disclosures,
and are deepening our understanding
and(cid:632)disclosure of climate-related risks
and(cid:632)opportunities. In 2021, we conducted
a(cid:632)high-level assessment of the vulnerability
of 50 of the Group’s key assets to physical
climate risks. Based on the findings,
business units will consider possible
mitigation or adaptation measures to
be(cid:632)taken, where necessary.
These are areas where Keppel has the
relevant capabilities and track record,
and(cid:632)where we can make a difference to
the(cid:632)global decarbonisation agenda.
During the year, we announced a series of
sustainability-related business initiatives,
such as exploring the import of renewable
energy to Singapore and the proposed
development of supply infrastructure to
bring liquefied hydrogen into Singapore
to(cid:632)power Keppel’s data centres. We will
pursue even more of such initiatives
going(cid:632)forward, as we make sustainability
our business.
BUILDING A SUSTAINABLE
FUTURE TOGETHER
Governance is a key aspect of sustainability,
and Keppel remains focused on corporate
governance, compliance and risk management.
We continued to enhance the Group’s
compliance measures, including progressively
rolling out the ISO 37001 Anti-Bribery
Management System across business
units.(cid:632)We have also strengthened our
cyber(cid:632)security governance structure and
established a Keppel Cyber Security Centre
to address the increasing prevalence of
cyber security and data privacy risks.
The net zero commitments made by many
governments and companies around the
world will drive demand for renewables,
clean energy and decarbonisation solutions.
In recognition of Keppel’s commitment to
corporate governance and sustainability,
Keppel was conferred the prestigious
We have announced our commitment to halve the
Group’s Scope 1 and 2 carbon emissions by 2030,
compared to 2020 levels, and achieve net zero by 2050.
Keppel Corporation Limited
Keppel Land is seizing opportunities
in sustainable urban renewal.
(In picture: Keppel Bay Tower,
Singapore’s first BCA Green
Mark Platinum (Zero Energy)
commercial building.)
Singapore Corporate Governance award
at(cid:632)the Securities Investors Association
(Singapore)’s Investors’ Choice Awards
2021. We also retained the highest MSCI
AAA ESG rating, which we have held since
early-2020. These accolades reaffirm
the(cid:632)Board’s and management’s efforts
to(cid:632)improve corporate governance and
sustainability practices, and encourage
us(cid:632)to(cid:632)strive for even higher standards.
Safety is one of Keppel’s core values,
and(cid:632)we(cid:632)maintained our unwavering focus
on(cid:632)health and safety during the year.
I(cid:632)am(cid:632)pleased to share that in 2021,
Keppel(cid:632)achieved our zero-fatality target
for(cid:632)our global operations and also saw
improvements across our Total Recordable
Injury, Accident Frequency and Accident
Severity Rates.
People are our most valuable asset, and
we(cid:632)continued to invest in training and
development, strengthening succession
planning and deepening staff engagement.
Despite COVID-19-related disruptions,
our(cid:632)workforce remained highly engaged,
with an engagement score of 84% in
the(cid:632)2021 Employee Engagement Survey,
about 6% above Mercer’s Singapore
average, and 4% above Mercer’s global
average. We have enhanced efforts to
improve the overall well-being of employees,
paying particular attention to mental health
amidst the prolonged pandemic. This
includes organising workshops on mental
wellness and activities to promote healthy
lifestyles, and making available professional
counselling for employees who may need
such services.
Keppel has always believed that when
our(cid:632)communities thrive, we thrive. We seek
to contribute to society in different ways,
through charitable donations, community
investments, commercial initiatives that
contribute to building a more resilient and
inclusive society, as well as staff volunteerism.
Since the start of the pandemic, Keppel
has(cid:632)disbursed about $5.5 million to the
fight(cid:632)against COVID-19, in Singapore and
overseas. New initiatives in 2021 include
a(cid:632)$300,000 donation to the Digital for
Life(cid:632)Fund, set up by the Infocomm Media
Development Authority, to help low-income
seniors to be more connected with their
communities using digital tools, and the
donation of laptops to students from lower
income families to support home-based
learning. In support of environmental
conservation, we announced a $1 million
donation to support the development of
the(cid:632)Keppel Coastal Trail at Labrador Nature
Reserve in Singapore. The trail would help
safeguard core habitats and critically
endangered native species, and also
enhance public awareness of the role of
Mr Desmond Lee (centre), Minister for National Development and Minister-in-charge of Social Services Integration,
Mr Danny Teoh (right), Chairman of Keppel Corporation and Mr Loh Chin Hua (left), CEO of Keppel Corporation,
together with Keppel Volunteers and members of the community, planted 50 trees at Labrador Nature Reserve
on 7 November 2021 to mark the launch of the Keppel Coastal Trail.
coastal forests in mitigating the impact
of(cid:632)climate change and rising sea levels.
Beyond financial support, Keppel’s staff
provided more than 12,000 hours of
volunteer community outreach and
service(cid:632)globally, including both physical
activities held in accordance with safe
management measures, as well as
virtual(cid:632)events.
ACKNOWLEDGEMENTS
I would like to thank Dr Lee Boon Yang
for(cid:632)his strong leadership and invaluable
contributions as chairman of the Board
for(cid:632)close to 12 years, before his retirement
in(cid:632)April 2021. Boon Yang played a pivotal
role to help the Company remain resilient
amidst challenging conditions, and lay
the(cid:632)foundation for its future growth.
We are pleased to welcome Mr Shirish Apte
as an independent director. Shirish brings
to(cid:632)the Board a wealth of experience in the
global banking and financial services sector,
which is invaluable to the Company in the
next phase of its growth.
In line with the prevailing SGX listing rules,
which came into effect on 1 January 2022,
I(cid:632)am no longer considered an independent
director, after having served for more
than(cid:632)nine years on the Board. Reflecting
our(cid:632)commitment to high standards of
corporate governance, Mr Till Vestring
has(cid:632)been appointed Lead Independent
Director with effect from 1 November 2021.
Till(cid:632)has served for over six years on the
Board and shown his dedication and
commitment to strong corporate
governance. We thank Till for accepting
this(cid:632)new responsibility and look forward
to(cid:632)his continued contributions.
I would also like to express my deep
appreciation to fellow directors for their
dedication and wise counsel, which helped
Keppel to deliver strong results amidst a
tough operating environment. I am also
grateful to our partners and other stakeholders
for their confidence and support for Keppel.
Finally, I would like to thank and commend
Keppelites around the world for their
many(cid:632)contributions to the Company and
to(cid:632)the communities, wherever we operate.
We will continue to work together with all
stakeholders to advance sustainability and
accelerate growth.
Yours sincerely,
DANNY TEOH
Chairman
25 February 2022
Annual Report 2021
GROUP OVERVIEW
INTERVIEW WITH THE CEO
12
THE KEPPEL OF TOMORROW WILL
BE DEFINED BY OUR FOCUS ON
SUSTAINABILITY, BEING ASSET LIGHT,
AND HARNESSING TECHNOLOGY.
LOH CHIN HUA Chief Executive Officer
Q From Keppel’s perspective,
how would you characterise 2021?
A 2021 was a watershed year for Keppel,
as the Group rallied together to accelerate
the execution of Vision 2030. Against a
volatile backdrop marked by continuing
COVID-19-related curbs, supply chain
disruptions, geopolitical tensions and
inflation, Keppel delivered a strong
set(cid:632)of results.
For the first time since 2015, at the
start(cid:632)of the offshore & marine (O&M)
downturn, Keppel Corporation’s
full(cid:632)year(cid:632)net profit crossed $1 billion,
reversing the net loss of $506 million
in(cid:632)2020. Our revenue also grew 31% to
$8.6 billion in 2021.
Significantly, our strong progress in
asset monetisation contributed to a
strong cash inflow of $1.75 billion for
the year, compared to an outflow of
Keppel Corporation Limited
$72 million in FY 2020. Our net gearing
also fell to 0.68x at the end of 2021
from(cid:632)0.91x at the end of 2020. We were
thus able to propose a final dividend of
21.0 cents, bringing the total dividend
to(cid:632)33.0 cents per share, more than three
times what we had paid for the whole
of(cid:632)FY 2020.
As part of our efforts to be more
disciplined and refocus our portfolio,
we(cid:632)announced the proposed combination
of Keppel Offshore & Marine (Keppel O&M)
and Sembcorp Marine, including the
resolution of Keppel O&M’s legacy rigs,
as well as the proposed divestment of
our logistics business. We have made
good progress in both these areas and
are working towards signing definitive
agreements by the end of 1Q 2022.
During the year, we continued to drive
transformation and growth in each of
our key business units. We have also
made significant strides forward in
other(cid:632)Vision 2030 targets, such as
strengthening governance, driving
innovation, enhancing employee
engagement, and improving our
safety(cid:632)performance. We achieved
our(cid:632)zero-fatality target in 2021 and
saw(cid:632)improvements across our Total
Recordable Injury, Accident Frequency
and Accident Severity Rates. Reflecting
our commitment to sustainability,
we(cid:632)announced our target to halve the
Group’s Scope 1 and 2 carbon emissions
by 2030 from 2020 levels and achieve
net zero by 2050.
Q What are Keppel’s priorities in 2022?
A
In 2022, our focus will continue to be on
accelerating our Vision 2030 plans to
transform Keppel, building on the strong
momentum of 2021. We will continue
our asset monetisation programme and
increasingly pivot towards an asset-light
13
model. We will gravitate away from
lumpy earnings to more recurring
income, and will also continue working
towards our medium to long-term Return
on Equity (ROE) target of 15% per annum.
Q Can you provide an update on your
asset monetisation programme?
What will you do after you have
achieved the $5 billion target?
Will you set a new target?
In the year ahead, we will look at
further(cid:632)focusing and simplifying our
business. Under Vision 2030, we see
ourselves not as a conglomerate of
diverse parts but as one integrated
business providing solutions for
sustainable urbanisation.
As we pursue the many exciting
growth(cid:632)opportunities, we will be very
disciplined and selective about what
we(cid:632)will do. We will double down and
scale up in our focus areas such as
renewables, decarbonisation solutions,
sustainable urban renewal, data centres
and asset management. We will also
continue to focus on risk management,
compliance and controls, safety and
project execution.
The Keppel of tomorrow will be defined
by our focus on Sustainability, being
Asset Light, and harnessing Technology,
which has always been one of Keppel’s
fortes. I am confident that, guided by
Vision 2030, we will emerge stronger,
more relevant, and on a faster growth
path than before.
A We have been making good progress
over the past one and a half years. We
announced in September 2020 that we
planned to achieve $3-5 billion in asset
monetisation over three years. At our
first half results in 2021, I shared that
we(cid:632)were confident of reaching the higher
end of our target by the end of 2023.
With $2.9 billion in asset monetisation
announced by the end of 2021, as well
as a pipeline of deals that we are currently
working on, I am confident that we can
exceed our asset monetisation target of
$5 billion by the end of 2023, if not earlier.
We will focus on exceeding the $5 billion
target first, before setting any new targets.
The key point is that asset monetisation
is integral to Keppel’s strategy to be
asset light, and we have seen how
powerful it can be in improving cashflow
and earnings. We will not be stopping at
$5 billion but will continue to drive asset
monetisation as a consistent feature
of(cid:632)Keppel’s business model moving
forward. This will allow us to regularly
unlock capital for re-investing into new
growth areas, as well as reward our
shareholders sustainably.
Q Can you provide an update on the
proposed combination of Keppel O&M
and Sembcorp Marine, as well as the
resolution of the legacy rigs? What is
Keppel O&M doing in the meantime?
A Discussions on the proposed combination
of Keppel O&M and Sembcorp Marine
are progressing steadily. As it is a highly
complex transaction, both sides are doing
detailed due diligence. I am optimistic
that we can arrive at a mutually beneficial
proposition, and we are working towards
signing definitive agreements by the end
of the first quarter of 2022.
In the meantime, Keppel O&M is pressing
on with its transformation to be a nimble,
asset-light and people-light Operating
Company (Op Co), focused on seizing
opportunities in the energy transition.
These efforts have allowed Keppel O&M
to perform resiliently, even though the
O&M sector remains challenging and
continues to be affected by labour and
supply chain disruptions.
In 2021, Keppel O&M secured $3.5 billion
in new orders and ended the year with
a(cid:632)strong net orderbook of $5.1 billion.
We will further focus and simplify our business. We see ourselves
not as a conglomerate of diverse parts but as one integrated
business providing solutions for sustainable urbanisation.
Keppel is well-placed to provide
compelling solutions that can
help to advance sustainable
development and climate action.
(In picture: Artist’s impression of
climate-resilient nearshore urban
developments or “floating cities”,
which Keppel Land is(cid:632)exploring
with(cid:632)other Keppel business units.)
Annual Report 2021
GROUP OVERVIEW
14
INTERVIEW WITH THE CEO
zero-energy buildings. We are also working
on energy-efficient floating data centres
that use seawater for cooling, which
we(cid:632)plan to launch in 2022, subject to
regulatory approval.
Over the longer term, we are also
looking(cid:632)at developing solutions for
carbon capture, utilisation and storage,
as well as new energy solutions, such
as(cid:632)green ammonia and hydrogen, to
meet the burgeoning global demand
for(cid:632)clean energy.
As we progress towards Vision 2030,
we(cid:632)will continue to explore inorganic
opportunities to acquire assets, operating
platforms and technologies that would
allow us to scale up quickly in these
new(cid:632)areas. Keppel Capital can also
bring(cid:632)in additional funding from
private(cid:632)investors to increase the
Group’s(cid:632)dry powder for investments.
Q What are your views of the China
market in light of the debt crisis
facing Evergrande and other
Chinese(cid:632)developers?
A Although sentiments have turned more
cautious after the debt crisis affecting
developers in China, we remain optimistic
and confident about opportunities in China
over the mid to long-term. Despite the
slowdown in GDP growth, China’s economy,
which grew 8.1% in 2021, is still one of the
fastest growing economies in the world.
The Chinese government is also taking
steps to stabilise the economy.
China should not be seen as one
market;(cid:632)the debt crisis and slowing
growth are not affecting different
Chinese cities in the same way. In 2021,
Keppel Land’s home sales in China
actually grew 32% year-on-year to
2,780(cid:632)units. In(cid:632)the(cid:632)Tier 1 cities where
Keppel is present, demand remains
quite(cid:632)strong, as we have seen from
some(cid:632)of our recent launches.
In every crisis lies threats, and also
opportunities. The current situation in
China’s real estate market may present
opportunities for Keppel, as some local
developers in China may need foreign
capital to help them invest. This is where
we can play a role, either as a joint venture
partner, or a provider of funding by bringing
in co-investors.
Q How is Keppel Land progressing in
its transformation into an asset-light
provider of urban space solutions?
A Keppel Land made significant progress
towards becoming an asset-light urban
space solutions provider over the past
The Group is actively exploring opportunities in low-carbon energy such as renewable energy and liquefied hydrogen,
among other areas.
It(cid:632)also continued with aggressive
cost(cid:632)management efforts that led to
a(cid:632)reduction of about $140 million in
overheads year-on-year. In line with
our(cid:632)earlier stated target for Op Co1 to
be(cid:632)financially independent and profitable
over time, Op Co achieved a net profit
of(cid:632)$66 million for FY 2021.
With rising oil prices, the offshore drilling
rig market has also shown signs of
improvement. Utilisation and day rates
for modern jackups, which make up the
bulk of Keppel O&M’s legacy rigs, both
improved during the year and are expected
to rise even further over the next few years.
With improving market conditions, we are
hopeful that Keppel O&M’s legacy rigs,
which would be injected into a separate
Asset Co to be majority owned by external
investors procured by Kyanite Investment
Holdings, can be substantially monetised
over the next three to five years.
If we are successful in the proposed
combination of Keppel O&M and
Sembcorp Marine and the resolution of
the legacy rigs and associated receivables,
our Energy & Environment segment would
then comprise our business activities in
renewables, new energy, decarbonisation
and environmental solutions. It will be
much more streamlined, focused and
aligned to Keppel’s mission.
Q Can you provide an update on
the(cid:632)key initiatives that Keppel is
undertaking in the sustainable
infrastructure space as you make
sustainability your business?
A Sustainability holds immense business
opportunities for Keppel. The net zero
Keppel Corporation Limited
commitments made by governments
and companies around the world will
create strong demand for renewables,
clean energy as well as decarbonisation
and environmental solutions. These
are(cid:632)areas where Keppel has strong
capabilities and a proven track record,
and where we can help our customers
on their journeys to net zero.
Many of the Group’s new business
pursuits and research and development
efforts in the past year were in these
areas, including exploring the import
of(cid:632)renewable energy to Singapore,
developing electric vehicle (EV) charging
infrastructure, securing Singapore’s
first(cid:632)Energy-as-a-Service contract, and
studying the feasibility of developing an
Asia-Pacific green ammonia supply chain.
In December, we announced the
acquisition of a majority stake in
Cleantech Renewable Assets, a leading
solar energy platform. Including this
transaction, we have announced
renewables projects with a total capacity
of 1.1GW. As we progress towards our
target of 7.0GW of renewable energy
assets, we will not only pursue greenfield
developments, but will also explore
opportunities to acquire stakes in
established renewable energy platforms,
allowing us to grow our presence in
renewables even more quickly.
A big part of our business is also in
providing decarbonisation solutions,
whether it is through Keppel Infrastructure,
Keppel Land or Keppel Data Centres.
Keppel has been helping our customers
drive down their carbon footprint through
district cooling systems as well as smart,
Renewables, clean energy, decarbonisation
and environmental solutions are areas
where Keppel has strong capabilities
and a proven track record, and where
we can help our customers on their
journeys to net zero.
year. It completed the monetisation
of eight projects in FY 2021, with total
proceeds of about $1.9 billion and net
gains of over $450 million2.
About 60% of the proceeds were realised
from its residential landbank, which is
held in our books at cost. At the end of
2021, our residential landbank had a
historical cost of about $3.8 billion,
while(cid:632)the market value of these assets
was almost 74% higher at $6.6 billion.
There is thus substantial value that we
can continue to unlock through our asset
monetisation programme and redeploy
for growth moving forward.
commercial building. This is not only a
good business case but also contributes
towards sustainable development by
reducing waste and supporting the
circular economy.
Q How will Keppel grow its Connectivity
business into a bigger contributor
to the Group?
A Connectivity, as the name suggests,
can play a key role in linking up Keppel’s
business units. Our data centre business
is a foremost example of how our diverse
value chains are converging, as business
units work steadily together to grow the pie.
Keppel is probably one of the most –
if not the most – integrated data centre
solutions provider in the world. We not only
have a strong track record for developing
and operating data centres, but also
an established asset management
platform that nurtures these assets from
cradle to maturity, as well as capabilities
in clean energy and infrastructure.
Leveraging the Group’s expertise in the
Energy & Environment segment, we are
exploring how we can centralise the
15
provision of utilities required by data centres.
We are looking into implementing our
proven district cooling solutions to reduce
power consumption for cooling data
centres. Keppel Infrastructure and Keppel
Renewable Energy are also exploring the
provision of renewables, and zero-carbon
energy alternatives including hydrogen
to(cid:632)power the data centres. Our integrated
solutions will not only improve energy
efficiency and reduce carbon emissions
of data centres but can also be a key
strategic differentiator for Keppel.
Through our investment in the Bifrost
Cable System, Keppel’s data centre
customers can also benefit from the
enhanced connectivity and network
diversity that Bifrost affords. Already,
we(cid:632)have seen strong demand for our
fibre pairs and are confident that most
of(cid:632)these would be committed before
the(cid:632)cable system is completed in 2024.
Meanwhile, M1 has made good progress
in a multi-year journey to transform
itself(cid:632)from a traditional telco into a cloud
native(cid:632)connectivity platform. It is swiftly
rolling(cid:632)out its 5G Standalone network
and(cid:632)5G(cid:632)use cases in Singapore, while
expanding its enterprise business in
the(cid:632)region. We will fully leverage M1’s 5G
and data analytics capabilities to glean
actionable insights, as well as connect
and empower the Group’s spectrum
of solutions from smart buildings to
infrastructure plants to asset management.
1 Op Co comprises Keppel O&M (excluding the legacy
completed and uncompleted rigs and associated
receivables) and its interests in Floatel and
Dyna-Mac.
2 About $380 million of the net gains were recognised
in FY 2021, while the rest was recognised in FY 2020.
Meanwhile, Keppel Land is also actively
working with Keppel Capital to access
more third-party funds for investments.
In January 2022, Keppel Land together
with Keppel Vietnam Fund and its
investor, acquired a 49% interest in
three residential land plots in Hoai Duc,
Hanoi for close to $160 million. Through
working with Keppel Capital, Keppel Land
can scale up in its key markets in a more
asset-light manner.
Real estate today is undergoing a
fundamental business model redesign,
accelerated by the pandemic, and enabled
by digitalisation and a growing market for
smart buildings. Keppel Land is remaking
itself to embrace new business models such
as Real Estate as a Service and leveraging
new technologies and artificial intelligence
to sharpen its focus on customer centricity,
all of which will contribute to growing
recurring income. Some of the initiatives
being explored include offering core or
flex space solutions for individuals and
businesses, transforming office and
retail spaces with digital and experiential
offerings, senior living and related amenities,
as well as digital services for smart cities.
Keppel Land is also expanding its
capabilities to provide solutions for
sustainable urban renewal. A good example
of this is Keppel Bay Tower, a 20-year-old
office property, which we had upgraded
and turned into Singapore’s first BCA
Green Mark Platinum (Zero Energy)
Keppel has seen strong demand for its fibre pairs in the Bifrost Cable System, whose manufacturing commenced in
December 2021.
Annual Report 2021
GROUP OVERVIEW
16
INTERVIEW WITH THE CEO
With our business units working together as
an integrated value chain, supported by highly
energised employees, I am confident that we
can achieve our Vision 2030 targets by 2025.
To further drive the Group’s digital
transformation, we have recently
appointed M1’s CEO, Manjot Singh
Mann, concurrently as Keppel’s Chief
Digital Officer. This reflects our focus
on(cid:632)leveraging digital transformation to
accelerate the achievement of Keppel’s
business priorities, harness the Group’s
synergies and sharpen our competitive
edge. As we further integrate our
solutions and value chains, Keppel is set
to become a formidable connectivity
solutions partner to customers,
governments, and various stakeholders.
Q What are the plans for the Asset
Management business moving
forward? How do you plan to scale
up this business?
A Our Asset Management business has
made good progress over the years.
It(cid:632)is(cid:632)the segment which pulls together
the rest of the Group and serves as a
powerful catalyst to realise synergies
and create value.
In 2021, Keppel Capital’s net profit grew
38% to $117 million, from $85 million in
FY 20201. Asset management fees rose
steadily, growing 29% year-on-year, further
boosting the Group’s recurring income.
The assets under management (AUM)
under Keppel Capital also grew by(cid:632)14%
to $42 billion as at the end of 2021.
Amidst international concerns about
inflation, we see strong demand from
investors for real assets with long-term
sustainable cash flows. Many of the
investors whom we speak to want to work
with a partner like Keppel, who is able to
develop and operate these real assets.
This is where Keppel has a very unique
position — beyond our own balance sheet,
we can tap third-party funds to create even
more end-to-end solutions for sustainable
urbanisation that our customers seek.
There is sometimes a misperception
that being asset light means doing less.
This is incorrect. For Keppel, going asset
light means doing more, with less. Let
me give an example.
We said in June 2020 that the Group
had $17.5 billion of monetisable assets,
Keppel Corporation Limited
based on carrying value. Suppose we
were able to monetise these assets at a
market value of about $20 billion. If we
were to use say $5 billion of the proceeds
to reward shareholders through dividends,
repurchase shares, and also pay down
debt, then we would have $15 billion left
to re-invest for growth.
Currently, Keppel Capital’s AUM is
$42 billion. And Keppel has put in
about(cid:632)$3.5 billion from our balance
sheet to date. Therefore, if we were to
invest(cid:632)the entire $15 billion through
Keppel Capital, then our AUM could
potentially grow to over $200 billion,
assuming that(cid:632)a similar multiple applies.
Of course, this(cid:632)is just a hypothetical
example, but(cid:632)it(cid:632)illustrates how we can
do(cid:632)more(cid:632)with less and harness our
asset-light model to scale up and
accelerate growth.
There are many exciting assets and
investment opportunities across
Keppel’s Vision 2030 focus areas that
we can explore and expand into. What
is required is solid execution, and finding
the right deals to achieve our goals.
Q Can you provide an update on Keppel’s
initiatives to enhance collaboration
across business units, and move
towards one integrated business?
A We have made good progress in getting
business units to work with one another
over the past few years. Collaboration
is(cid:632)now a regular part of Keppel’s modus
operandi. In the next chapter of Keppel’s
growth under Vision 2030, we are moving
from collaboration to integration. We
are(cid:632)increasingly focused on building
end-to-end value chains, especially for
the new growth engines where we want
to scale up and establish our competitive
advantage quickly.
To bring about such integration,
we(cid:632)have(cid:632)formed OneKeppel Teams
for(cid:632)each of our growth areas to zero-in
on opportunities such as data centres,
infrastructure, energy transition and
more. OneKeppel Teams bring together
talent and expertise from various
business units and functions to evaluate
and pursue opportunities across the
projects’ development stages, from
cradle to maturity, be they investments
by the Group’s private funds, operating
entities or listed REITs and business trust.
Working as OneKeppel, we can also
undertake more complex deals, including
those with hybrid structures, by drawing
on the strengths of each business unit to
offer investors and customers compelling
and distinct value propositions. OneKeppel
Teams will play an increasingly
important role in integrating our value
chains, as well as unlocking synergies
and access to new profit pools.
Q What are some of the merger and
acquisition (M&A) opportunities that
the Group is exploring? How will you
fund these opportunities?
A We are exploring a number of exciting
M&A opportunities, as we continue to
grow Keppel’s business in line with
Vision 2030. Keppel is well-placed
to(cid:632)seize opportunities in renewables,
decarbonisation solutions, urban renewal
and connectivity, which are supported
by the macrotrends of urbanisation,
digitalisation, and growing international
concerns about climate change.
As we monetise assets, we will be able
to free up our balance sheet and put the
capital to work in pursuing new growth
initiatives. However, we are not limited
just to the size of our balance sheet.
We(cid:632)will have the option of tapping on
co-investment capital from Keppel
Capital’s private investors, or even our
REITs and Keppel Infrastructure Trust,
for some of these investments. We can
also choose to take on larger investments
through forming consortiums.
A recent example is the acquisition of a
majority stake in Cleantech Renewable
Assets, a leading solar energy platform,
for up to US$150 million. This deal was
undertaken by Keppel Corporation,
together with Keppel Asia Infrastructure
Fund (KAIF) and a co-investor of KAIF.
We are also in the process of engaging
potential co-investors for Keppel’s fibre
pairs in the Bifrost Cable System.
Q Analysts have described FY 2021’s
total cash dividend of 33.0 cents per
share as “generous”. Is this a
sustainable level moving forward?
A We know that dividends are important to
many of our shareholders. While we do
not have an explicit dividend policy,
we(cid:632)have been consistent in paying
1 Keppel Capital’s net profit includes 100% contribution
from the Manager of Keppel DC REIT.
17
out(cid:632)40-50% of our annual net profit as
dividends over the past few years.
We have proposed a generous final
dividend, considering not only the
profit(cid:632)that has been made, but also
the(cid:632)strong progress the Group has
achieved in our asset monetisation
programme. The total dividend of
33.0(cid:632)cents per share for FY 2021
represents a 45% payout ratio, after
ringfencing $318 million of impairments
associated with KrisEnergy, as we
said(cid:632)we would. This translates into a
gross dividend yield of 6.4% on Keppel
Corporation’s last transacted share
price(cid:632)of $5.12 as at 31 December 2021.
As the Group’s financial performance
and recurring income continue to
improve, and we make further progress
in achieving our monetisation target in
excess of $5 billion by end-2023, I am
confident that we can continue to
reward Keppel’s shareholders well.
Q What was the rationale for launching
the $500 million Share Buyback
Programme? Why is Keppel raising
its share purchase mandate to 5%?
annual vesting of employee share plans,
and more importantly, as possible
currency for future M&A activities under
Vision 2030. Rather than paying a full cash
consideration, we will be able to offer a
mix of cash and shares when making
acquisitions. This is especially important
when acquiring founders’ platforms.
Using shares as acquisition currency
would help ensure that the founders of
such platforms have vested interests in
the long-term success of Keppel, thereby
aligning their interests with Keppel’s.
Q Can you share more about
Keppel’s focus on sustainability
and climate change?
A Sustainability is not new for Keppel.
But(cid:632)as part of Vision 2030, we have
given it even greater importance
and(cid:632)put(cid:632)it at the core of our strategy.
This means both running our business
sustainably, and providing solutions that
help governments and our customers
get to net zero and contribute to climate
action. In line with our enhanced focus
on sustainability, we have appointed a
Chief Sustainability Officer to lead the
Group’s sustainability efforts.
A We are proposing to raise Keppel
We have announced our carbon
Corporation’s share purchase mandate
from 2% to 5% to support and accelerate
our share buyback programme.
Shares repurchased under the buyback
programme will be held as treasury
shares which will be used in part for the
emissions reduction targets, which
feature prominently in the performance
scorecards and long-term incentives of
senior management across the Group.
We are also increasing our focus on
climate-related risks and opportunities,
in line with the recommendations
of(cid:632)the(cid:632)Task Force on Climate-related
Financial Disclosures.
Just as importantly, we are making
sustainability our business. Many of
our(cid:632)new business initiatives are in
sustainability-related areas such as
clean(cid:632)energy, EV charging infrastructure
and green buildings. Keppel’s businesses
and the solutions we provide are also
highly aligned to Singapore’s Green Plan
2030. These are areas where Keppel
has(cid:632)the relevant capabilities and track
record, and where I believe we can make
a(cid:632)significant contribution to the world.
Q Are you optimistic about achieving
Vision 2030 goals by 2025?
A The short answer is, yes, certainly.
As(cid:632)the(cid:632)world focuses increasingly on
climate change and environmental
degradation, Keppel is well-placed to
provide compelling solutions that can
help(cid:632)to combat climate change and
advance sustainable development.
We are in the right space, at the right time.
I am heartened to note that in a recent
survey, 83% of Keppelites have indicated
that they are inspired by our mission to
provide solutions for sustainable urbanisation.
With our business units increasingly
working together as an integrated
value(cid:632)chain, and supported by highly
energised employees, I am confident
that(cid:632)Keppel can achieve our Vision 2030
targets by 2025.
Supported by highly energised employees, Keppel can achieve our Vision 2030 targets by 2025.
Annual Report 2021
GROUP OVERVIEW
VISION 2030 IN ACTION
18
19
HIGHLIGHTS OF
ACHIEVEMENTS
IN 2021
1
Business
Transformation
in Line with
Vision 2030
• Organic transformation of Keppel Offshore & Marine (Keppel O&M);
signed Memorandums of Understanding for proposed combination of
Keppel O&M and Sembcorp Marine and resolution of legacy rigs.
• Proposed divestment of logistics business in Southeast Asia
and Australia.
ENERGY &
ENVIRONMENT
• Seizing opportunities in renewables,
clean energy, decarbonisation and
environmental solutions.
URBAN
DEVELOPMENT
• Transforming Keppel Land into an asset-light
urban space solutions provider.
CONNECTIVITY
• Scaling up data centre business, while driving
innovation to reduce its carbon footprint;
expanded into adjacent subsea cable business.
• Continuing M1’s digital transformation
and 5G Standalone network rollout,
and growing its enterprise business.
ASSET
MANAGEMENT
• Expanded assets under
management by 14%
to $42 billion.
• Deepened OneKeppel
collaboration to tap
third-party funding
for growth.
MAKING SUSTAINABILITY
OUR BUSINESS
• Various business pursuits and R&D projects
related to sustainability, including acquiring
a majority joint venture stake in Cleantech
Renewable Assets, developing electric vehicle
charging infrastructure, securing the first
Energy-as-a-Service contract in Singapore,
and(cid:632)exploring the import of renewable energy
into Singapore.
• Announced 1.1GW of renewables projects
to date, progressing towards target of 7.0GW.
2
Financial
Performance
Annual Report 2021
Master Template
PB
28.12.2021
1
We are committed to business
transformation, actively pursuing
our targets and delivering on
our focus areas.
RUNNING OUR BUSINESS
SUSTAINABLY
• Announced target to halve Scope 1 and 2
emissions by 2030 from 2020 levels, and
achieve net zero by 2050.
• MSCI AAA ESG rating; Industry Mover in the
S&P Global Sustainability Yearbook 2022.
NET PROFIT
$1.02b
compared to loss of
$506m in FY 2020
ROE
9.1%
compared to negative
4.6% in FY 2020
GEARING
0.68x
at end-Dec 2021,
compared to 0.91x
at end-Dec 2020
ASSET
MONETISATION
$2.9b
announced since
4Q 2020, $2.7b
cash collected
CASHFLOW
$1.75b
inflow, compared to $72m
outflow in FY 2020
TOTAL DIVIDEND
33 cents
cash dividend per share
for FY 2021, compared
to 10 cents for FY 2020
RECURRING INCOME
$292m
33% increase over $220m
in FY 2020
Keppel Corporation Limited
Annual Report 2021
GROUP OVERVIEW
20
VISION 2030 IN ACTION
3
Governance, Compliance,
Risk Management & Safety
GOVERNANCE
• Continued to roll out ISO 37001
Anti-Bribery Management System
across business units.
RISK MANAGEMENT
• Strengthened cyber security governance
structure, established Keppel Cyber
Security Centre.
• Conducted physical climate risk
assessment of 50 of the Group’s
key assets.
SAFETY
• Achieved zero fatalities across global
operations, and saw improvements
in Total Recordable Injury, Accident
Frequency and Accident Severity Rates.
We are making sustainability our business,
by providing solutions that contribute to a cleaner
and greener world.
5
Corporate Social
Responsibility
VOLUNTEERS
• More than 12,000 hours of
community service, exceeding
target of 10,000 hours.
SOCIAL INVESTMENTS
• $4.6 million contributed to
worthy causes.
4
People
STAFF ENGAGEMENT & DEVELOPMENT
• Received strong engagement score
of 84%, 6% above Mercer’s Singapore
average and 4% above its global average.
• Achieved average of 20 training hours
per employee, with a total of 80,000
training opportunities.
• Conducted a Group-wide talent mapping
exercise and identified associated
development plans.
SUCCESSION PLANNING
• Implemented leadership changes at
a few key business units, as part of
the Group’s succession planning and
leadership renewal. Potential successors
identified for key leadership positions.
• Launched Board Mentorship framework
to support development of new
generation leaders.
Keppel Corporation Limited
FOCUS AREAS
IN 2022
21
ACCELERATE BUSINESS
TRANSFORMATION
• Continue business transformation
and drive growth, focusing on
sustainable urbanisation solutions.
• Complete proposed transactions
involving offshore & marine and
logistics businesses.
• Continue asset monetisation
programme, with goal of exceeding
$5 billion by end-2023.
• Drive collaboration and
integration to create compelling
end-to-end solutions and realise
OneKeppel synergies.
• Grow revenue from cross-business
unit collaboration to 20% by 2025.
DRIVE FINANCIAL PERFORMANCE
• Achieve Vision 2030 financial targets,
including mid to long-term ROE
target of 15%.
ENHANCE GOVERNANCE,
COMPLIANCE, RISK
MANAGEMENT(cid:632)& SAFETY
• Ensure strong governance,
• Maintain gearing below 1.0x.
risk management, compliance,
controls and safety record.
DEVELOP HUMAN CAPITAL
• Continue staff engagement
and development.
• Enhance succession planning.
CHAMPION SUSTAINABILITY
• Work towards ESG goals,
including long-term carbon
emissions reduction targets.
• Make a positive impact on
the community.
Annual Report 2021
GROUP OVERVIEW
22
VISION 2030 IN ACTION
TECHNOLOGY
AND INNOVATION
Amidst a fast-changing environment, technology
and innovation are key enablers for Keppel to
achieve its Vision 2030 plans.
Technology and innovation efforts are driven
both at the Group and business unit (BU) levels.
Keppel Technology & Innovation (KTI),
which(cid:632)was established in 2018, serves
as(cid:632)the Group’s platform to sharpen its
focus(cid:632)on innovation, provide technology
foresight in a rapidly evolving environment,
and identify long gestation opportunities
in(cid:632)collaboration with BUs. BUs also have
dedicated innovation teams that, working
in(cid:632)collaboration with KTI, identify, scope
and(cid:632)pursue ideas and projects within
their(cid:632)respective segments, such as
Keppel(cid:632)Infrastructure’s Keppel Energy
Transition Centre (KETC) or Keppel Land’s
Innovation Agile Team (IAT).
Beyond in-house capabilities, the Group also
has a Keppel Technology Advisory Panel,
comprising eminent business leaders and
industry experts from across the world,
which(cid:632)guides the Group’s innovation journey
and provides technology foresight.
With effect from 1 March 2022, Keppel
has(cid:632)appointed a Chief Digital Officer (CDO),
and also established a Group Digital Office
– a newly created department to drive
digital(cid:632)transformation, as well as a Digital
Transformation Steering Committee,
which(cid:632)will be chaired by the CDO.
TECHNOLOGY &
INNOVATION MANAGEMENT
Keppel looks at technology and innovation
across three lenses: business segments,
time horizon and key technologies.
BUSINESS SEGMENTS
Energy & Environment: We are collaborating
with upstream, midstream and downstream
partners to develop decarbonisation solutions
and new energy systems. We are leveraging
Keppel’s energy systems engineering expertise
to develop new infrastructure, power systems
and carbon capture technologies.
Keppel Corporation Limited
Urban Development: We are focusing on
smart,(cid:632)sustainable buildings and cities,
new(cid:632)services to enhance the live-work-play
experience, as well as innovative climate-
resilient nearshore urban developments,
which can help to mitigate the impact of
climate change and rising sea levels.
KEY TECHNOLOGIES
Digitalisation & Automation: We are
driving(cid:632)digitalisation across the Group
to(cid:632)streamline operations and create new
products and services for our customers.
These solutions can be applied across
Keppel’s different facilities.
Connectivity: We are focused on delivering
new generations of energy-efficient and
green data centres, including energy-efficient
floating data centre parks, to meet the global
IT demand sustainably. We are also rolling
out M1’s 5G Standalone network and
developing the world’s first subsea cable
system that directly connects Singapore to
the west coast of North America via Indonesia.
Advanced Analytics: We are investing
to(cid:632)build an integrated digital backbone
across the Group, aimed at better
leveraging(cid:632)the abundant data that
our(cid:632)businesses continuously generate,
with(cid:632)the objective to enhance our
operations(cid:632)and decision making,
as(cid:632)well(cid:632)as(cid:632)build new platforms such
as(cid:632)a(cid:632)B2C ecosystem.
Asset Management: We are building the
digital foundation to connect our assets
around the world, enabling more streamlined
operations and optimised decision making.
TIME HORIZONS
We are exploring opportunities across
three(cid:632)time horizons:
• Engine 1: Current businesses
Our focus is on driving efficiencies and
continued expansion through digitalisation
and advanced analytics, to reduce cost,
deepen customer engagement and
centricity and accelerate growth.
• Engine 2: Existing or new
businesses that we are scaling up
We seek to unlock applications for new
and disruptive technologies through an
ecosystem approach involving in-house
as well as external expertise from
industry, research centres and academia.
• Engine 3: Longer term opportunities
These are high-potential opportunities
which we are exploring for the long term,
but with limited impact expected within
the next three years.
New Energy Systems: Amidst the
energy(cid:632)transition, we are researching
and(cid:632)developing the technologies required
to(cid:632)enable new energy value chains.
Hydrogen is expected to be a critical
energy(cid:632)vector and we are exploring
solutions(cid:632)for multiple carrier forms.
We(cid:632)are(cid:632)also building new energy
systems(cid:632)and creating new business
models(cid:632)such as Energy-as-a-Service
to(cid:632)meet(cid:632)our customers’ needs.
Smart Engineering: We are building
on(cid:632)our(cid:632)engineering capabilities and
collaborating with partners on the
newest(cid:632)design, engineering and
manufacturing technologies. We aim
to(cid:632)increase energy efficiency, reduce
time(cid:632)to(cid:632)market, cost to build and operate,
and the environmental footprint
of(cid:632)our(cid:632)projects.
5G & IoT: With the world seeing a
multitude(cid:632)of applications of 5G and IoT
applied to smart buildings and cities,
autonomous vehicles, advanced robotics
etc., we continue to build connectivity, IoT,
analytics, cloud and edge computing
solutions to meet future demands.
23
Energy & Environment
Keppel Energy
Transition
Centre
Urban Development
Keppel Land’s
Business Model
Innovation
We are building new energy systems and creating new business
models such as Energy-as-a-Service to meet our customers’ needs.
Keppel Land is reinventing the way it delivers value to its customers,
leveraging the latest technologies.
In 2021, Keppel Infrastructure (KI) established the
KETC(cid:632)as its technology and innovation arm. KETC
aims(cid:632)to harness technological foresight and accelerate
innovation and technology development with the goal
of(cid:632)positioning KI at the forefront of the energy transition
to capture opportunities presented by this macrotrend.
Core focus areas
Energy
innovation
Environmental
sustainability
in waste and
water treatment
Smart grid
InfraTech
KETC will collaborate with multiple parties, including
technology providers, start-ups, institutes of research
and higher learning, interest groups and funding
agencies. It aims to facilitate global ecosystem
partnerships, promote open innovation and co-creation,
including low-carbon living labs and new digital business
models, leveraging Keppel’s global business footprint.
KETC supports KI’s aim to be a leading player for
innovative large-scale decarbonisation, low-carbon
energy and environmental solutions, which will help
industries and stakeholders overcome climate-related
challenges and enhance energy and water resilience.
As Keppel Land transforms from a brick-and-mortar
developer into an asset-light solutions provider for urban
spaces, it is also reinventing the way it delivers value
to(cid:632)its customers.
An IAT has been established to focus on business
model(cid:632)innovation for urban spaces. IAT comprises
key(cid:632)representatives across departments globally,
including those involved in digitalisation & technology,
customer centricity, innovation investments, business
development and operations.
Key thrusts
Facilitating ideation, validation and incubation of
new(cid:632)business ideas.
Promoting innovation-related best practices through
focused workshops and training sessions.
Engaging proptech venture capital and the start-up
ecosystem, in collaboration with government agencies.
Taking strategic stakes in promising proptech-related
venture capital funds and start-ups.
Annual Report 2021
GROUP OVERVIEW
24
VISION 2030 IN ACTION
COLLABORATION
AND INTEGRATION
Keppel is advancing its transformation to be one integrated
business providing solutions for sustainable urbanisation
by driving first collaboration and increasingly integration
across business units and functions.
Guided by Vision 2030, Keppel’s business units
are(cid:632)increasingly coming together to hunt as a pack
for(cid:632)opportunities across the Group’s focus areas.
As(cid:632)OneKeppel, we are harnessing the Group’s
diverse(cid:632)capabilities to create innovative solutions
that(cid:632)create both value for stakeholders and
competitive(cid:632)advantage for Keppel.
HUNTING AS A PACK
ONEKEPPEL TEAMS
Keppel continues to invest in developing systems
and(cid:632)structures to drive integration across the
Group.(cid:632)Synergistic platforms, known as OneKeppel
Teams,(cid:632)are being set up to integrate talent and
expertise(cid:632)from various business units and functions,
putting Keppel in a formidable position to seize
opportunities quickly and scale up in its Vision 2030
focus areas.
OneKeppel Teams adopt a cradle-to-maturity
approach(cid:632)in(cid:632)evaluating opportunities across the
projects’(cid:632)development stages, whether they are
investments by the Group’s operating entities,
private(cid:632)funds, listed REITs or business trust.
The(cid:632)diverse(cid:632)structure of the Teams further
ensures(cid:632)that(cid:632)the perspectives and interests of
the(cid:632)Group’s(cid:632)varied stakeholders are well considered
in(cid:632)any(cid:632)investment decision, contributing towards
win-win outcomes and greater value creation.
OneKeppel Data Centre (DC) and OneKeppel Infrastructure
were the first such teams to be formed in 2021, to focus
respectively on investments in data centres and various
types of infrastructure, including renewables, decarbonisation
and environmental solutions. The OneKeppel DC team for
instance, brings together investment personnel and expertise
from Keppel Data Centres and Keppel Capital. The team is
further guided by an advisory committee comprising senior
management from various parts of the Group.
The pooling of talent and resources also enables
Keppel’s(cid:632)business units to optimise strategic execution
and resource allocation, as well as enhance their
operations. Through hunting as a pack, these Teams
can(cid:632)converge potential deals across business units into
a(cid:632)single pipeline for evaluation, thus minimising the loss
of(cid:632)opportunities. Importantly, the OneKeppel approach
allows the Group to undertake more complex deals,
including those with hybrid structures, by drawing on
the(cid:632)strengths of each business unit.
OneKeppel Teams will play increasingly significant roles
in(cid:632)fuelling Keppel’s integrated value chain, unleashing
synergies and giving business units access to new profit
pools that may not be available to them individually.
Diverse opportunities arising from this cross-fertilisation
of(cid:632)business units and their talents will help to develop
the(cid:632)Group’s human capital and allow Keppel to
accelerate growth.
ONEKEPPEL TEAMS
Improved Execution
Capabilities
Single Pipeline
View
Deal
Ownership
Career
Development
OneKeppel
Approach
KEY
OBJECTIVES
• Synchronised
strategy
• Better resource
allocation
• Break silos
• Operational
efficiency
• Minimise lost
opportunities
as OneKeppel
• Cradle-to-maturity
• Opportunity for
approach
exposure across
different risk-return
profiles of asset
management and
investments
• Ability to tackle
more complex
deals and hybrid
investment deals
25
DRIVING INTEGRATION IN THE DATA CENTRE BUSINESS
SUSTAINABLE
DATA CENTRE
SOLUTIONS
ASSET CREATION, OPERATION & MAINTENANCE
KEPPEL DATA CENTRES
CENTRALISED UTILITIES
• District cooling solutions
• Green electrons from renewables,
hydrogen and others
ENHANCED CONNECTIVITY & NETWORK DIVERSITY
THIRD-PARTY FUNDING & CAPITAL RECYCLING
• Leveraging private funds and Keppel DC REIT
KEPPEL INFRASTRUCTURE
KEPPEL RENEWABLE ENERGY
BIFROST CABLE SYSTEM
KEPPEL CAPITAL
PACKING A PUNCH
SUSTAINABLE DATA CENTRE SOLUTIONS
As a leading provider of data centre solutions, Keppel
continues to push the envelope for the holistic design
and(cid:632)development of more energy-efficient and greener
concepts, such as high-rise data centres or floating data
centres, which we plan to launch in 2022, subject to
regulatory approval.
The launch of Vision 2030 has taken Keppel even
further on this journey to explore how we can
integrate the Group’s various sustainable products,
services and capabilities to help governments and
businesses reduce their energy expenditure and
carbon footprints.
IMPROVING ENERGY EFFICIENCY
We are exploring the centralisation of utilities to
help decarbonise data centres by reducing energy
intensity and powering them with green electrons.
This involves deploying the Group’s proven district
cooling systems (DCS) to cool data centres, as
well as providing reliable sources of green energy
for the assets.
By aggregating energy loads across several buildings,
Keppel’s DCS facilities can greatly reduce the overall
capacity requirements and costs for cooling larger scale
developments, achieving up to 40% in energy savings
compared to standalone systems. We are also exploring
the procurement of renewables, and zero-carbon energy
alternatives including hydrogen to power the data centres.
It is estimated that Keppel’s centralised utilities platform
can potentially improve the Power Usage Effectiveness
of data centres by as much as 20-30%.
VALUE CREATED
$1.1b
cumulative value created by Keppel’s data centre
business since 2014, comprising total earnings of about
$715 million and a premium of about $377 million over
Keppel’s carrying value of Keppel DC REIT units held
as at 31 December 2021.
BOOSTING CONNECTIVITY
In addition to lowering their carbon footprint, our data centre
customers can also benefit from enhanced connectivity and
network diversity by tapping the Group’s investment in the
Bifrost Cable System. This cable system is the world’s first
subsea cable system that directly connects Singapore to
the west coast of North America via Indonesia through the
Java Sea and Celebes Sea.
PROVIDING END-TO-END SOLUTIONS
The Group’s competencies in creating and operating
a(cid:632)variety of real assets present a unique and attractive
proposition to financial investors. For example, the Group
can tap third-party funding for the development of real
assets through our private funds, and recycle them through
the Keppel-managed REITs and business trust when they
have been de-risked and are generating stable cash flows.
Harnessing diverse capabilities from across the Group
allows Keppel to deliver innovative solutions that differentiate
us from the competition. Keppel’s versatile end-to-end
model can also be used to help commercialise other
innovative concepts such as energy-efficient floating
data centre parks and climate-resilient nearshore
developments or “floating cities”.
Keppel Corporation Limited
Annual Report 2021
GROUP OVERVIEW
ECOSYSTEM FOR VALUE CREATION
26
27
AS ONE INTEGRATED BUSINESS WITH SUSTAINABILITY AT THE
CORE OF OUR STRATEGY, WE WILL HARNESS THE STRENGTHS OF
THE GROUP TO ACCELERATE GROWTH UNDER VISION 2030 AND
BUILD A SUSTAINABLE FUTURE.
Our business model, underpinned by strong collaboration and
integration across business units, provides a robust ecosystem
that allows us to create and(cid:632)capture value from all parts of the
Group. From the time an asset is being created till after its injection
into a Keppel-managed trust(cid:632)or fund, our business model produces
multiple income streams.
To fuel Keppel’s growth, we are also expanding the Group’s capital
base, bringing on board like-minded co-investors through our private
funds to seize opportunities and accelerate asset creation without
putting a strain on our balance sheet. We can also turn our assets
efficiently through our business model, unlocking value and recycling
capital to achieve the best risk-adjusted returns.
OUR BUSINESS MODEL
Design and Build
The Group has a strong track record in designing and
developing high-quality real assets including energy and
environmental infrastructure, residential and commercial
properties, data centres, power plants and more.
Private Funds
Through the private funds that it creates and manages,
Keppel can bring on board investors, such as pension
and sovereign wealth funds, to co-invest in the
development of assets across its business units.
This(cid:632)expands Keppel’s capital base to seize
opportunities while it earns recurring fees from
managing the private funds.
a. Own and Operate
Keppel owns and operates many of the(cid:632)assets it
creates which can be retained as investments, yielding
long-term, steady cashflows and recurring income.
Business units can(cid:632)earn fees from leasing out and
operating such assets. They(cid:632)can also earn fees from
rendering project and asset management services
to the private funds created by Keppel.
b. Turnkey
The Group also sells products and provides turnkey
solutions to its customers. Some of the assets created,
such as homes, will be handed over to customers when
they are completed. In this phase of asset creation,
business units can earn development margins from
the sale of(cid:632)their solutions.
Stabilise and Monetise
The assets held as investments by Keppel and its private
funds(cid:632)contribute revaluation gains to the Group. As(cid:632)these
assets mature and are de-risked and stabilised, the Group
can(cid:632)monetise them through divestments to(cid:632)its listed REITs
and(cid:632)business trust as(cid:632)well as third parties. This process
of asset monetisation enables the Group to pursue
the(cid:632)best risk-adjusted returns by(cid:632)unlocking value and
recycling capital to seize new(cid:632)growth opportunities.
REITs and Trust
The Group sponsors and manages real estate, data centre
and infrastructure trusts across its business lines,
which it leverages as platforms to(cid:632)recycle capital. Mature
assets are well suited to(cid:632)the REITs(cid:632)and business trust,
whose investors seek stable, recurring(cid:632)income.
The injection of assets to the REITs and business trust
helps to grow the(cid:632)total portfolio of assets managed by
the Group.
The Group will continue to earn fee income from asset
management, as well as the operation and maintenance
of the assets.
In addition, through its stakes in the listed vehicles,
the(cid:632)Group continues to benefit from the performance
and contributions of(cid:632)the REITs and business trust.
REAL ASSETS THAT WE CAN CREATE, OPERATE AND MAINTAIN
Income Streams
Project-based income
Recurring income
Revaluation & divestment gains
Keppel Marina East Desalination Plant, Singapore
Saigon Sports City in Ho Chi Minh City, Vietnam
Data centre in Huizhou, China
Seasons City retail mall in Tianjin, China
OUR STAKEHOLDERS
Employees
Customers
Governments
Shareholders & Investors
Suppliers
Local Communities
People are our most valuable asset. We are
committed to the well-being of our people
and investing in their development. We adopt
merit-based recruitment practices and
emphasise diversity and inclusiveness.
Customer satisfaction is crucial to the
success of our businesses. We are committed
to continually improving our range of
products to better meet customers’ needs,
including through harnessing insights
from(cid:632)customer engagement.
Governments shape the business
environments in which we operate. Political
factors, policies and regulations can affect
how businesses are run and also create new
opportunities for companies. We track topics
of concern to governments and regulatory
bodies wherever we operate, and seek to not
only comply with but also support the policies
of national and regional governments.
Shareholders play an important role in the
financing and governance aspects of our
business. Our Investor Relations Policy sets
out the principles that the Company abides
by to ensure a level playing field and help
shareholders and prospective investors
make well-informed decisions.
Strong, effective relationships with our
suppliers give our businesses strategic
and(cid:632)operational advantages. By effecting
stringent procurement processes and
a(cid:632)supplier code of conduct, we aim to
encourage our suppliers to adopt more
sustainable practices.
As active members of our communities,
we(cid:632)aim to contribute towards their
continued well-being. We engage
community leaders to develop
impactful(cid:632)programmes that drive
community development.
For more information on the value we create for our stakeholders, please refer to our Sustainability Report – to be published in May 2022.
Keppel Corporation Limited
Annual Report 2021
GROUP OVERVIEW
SUSTAINABILITY FRAMEWORK
28
29
WE ARE COMMITTED TO ENVIRONMENTAL STEWARDSHIP,
RESPONSIBLE BUSINESS PRACTICES, AND INVESTING IN PEOPLE
AND COMMUNITIES WHEREVER WE OPERATE.
Our Strategy
Keppel provides solutions for sustainable urbanisation, and has placed sustainability at the core of the Company’s strategy. This includes
both running our business in a sustainable manner, and making sustainability our business by providing solutions that contribute to a cleaner,
greener world and combatting climate change.
Keppel Corporation’s Board of Directors and management consider environmental, social and governance (ESG) issues in the determination
of(cid:632)the Company’s strategy and business, and are committed to contributing to the United Nations Sustainable Development Goals (SDGs).
Keppel Corporation is a signatory of the United Nations (UN) Global Compact and is committed to its 10 universal principles. Keppel also
supports the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and has incorporated them in the Group’s
sustainability reporting.
The three key strategic thrusts under Keppel’s sustainability framework are (1) Environmental Stewardship; (2) Responsible Business;
and(cid:632)(3)(cid:632)People and Community.
ENVIRONMENTAL
STEWARDSHIP
RESPONSIBLE
BUSINESS
PEOPLE AND
COMMUNITY
As part of Keppel’s Vision 2030, we have
set targets to halve the Group’s Scope 1
and 2 carbon emissions by 2030 from
2020 levels and achieve net zero by
2050, as well as reduce our water and
waste intensity.
We are also making sustainability our
business by providing solutions that
contribute to sustainable development
and climate action. Keppel is refocusing
its portfolio on sustainable urbanisation
solutions, through evaluating the fit
with(cid:632)the Company’s Vision, Mission
and(cid:632)ESG goals as well as the risks
and(cid:632)opportunities associated with
climate change.
We are expanding the Group’s
involvement in renewables, clean energy
and decarbonisation solutions, and have
committed to grow the Group’s renewable
energy portfolio to 7.0GW by 2030.
The long-term sustainability of our
business is driven at the highest level
of(cid:632)the Company through a strong
and(cid:632)effective board, good corporate
governance and prudent risk management,
including the evaluation of ESG risks.
People are the cornerstone of our
business. We are committed to diversity,
employee well-being, workplace health
and safety, and investing in the training
and development of our employees to
help them reach their full potential.
We are driving collaboration across
the(cid:632)Group, promoting innovation
and(cid:632)harnessing technology to seize
opportunities to provide sustainable
urbanisation solutions.
We also work with stakeholders in
our(cid:632)value chain to enhance their
sustainability performance.
We strive to create value and build
vibrant and inclusive communities
wherever we operate, and support
initiatives that contribute to protecting
the environment, promoting education
and caring for the underprivileged,
with(cid:632)the goal of building a sustainable
future together.
We have committed up to 1% of
the(cid:632)Group’s net profit to support
worthy(cid:632)causes.
Stakeholder Engagement
We actively engage our stakeholder groups through diverse mechanisms,
including through virtual engagements when opportunities for physical
interactions were more limited due to the COVID-19 pandemic.
GOVERNANCE
Management Structure
The key material ESG factors for Keppel Corporation have been identified and are regularly reviewed by the Board and management. The Board
maintains active oversight over sustainability issues, including overseeing the management and monitoring of ESG factors, and takes them into
consideration in the determination of the Company’s strategic direction and policies.
At the management level, the Group Sustainability Steering Committee, chaired by Keppel Corporation’s Chief Executive Officer Loh Chin Hua and
comprising senior management from across the Group, drives the Group’s sustainability strategy. The Group Sustainability Working Committee,
comprising discipline-specific working groups, executes, monitors and reports on the Group’s sustainability efforts.
Keppel has also announced the appointment of a Chief Sustainability Officer (CSO) with effect from 1 March 2022. The CSO will coordinate and drive
the Group’s sustainability efforts, including chairing the Group Sustainability Working Committee. He will be supported by a new Group Sustainability
department, which has been established to focus on sustainability issues.
Keppel’s management systems, policies and guidelines, including the Keppel Group Code of Conduct, Global Anti-Bribery Policy, Environmental
Sustainability Policy, Human Rights Policy, Health, Safety and Environment Policy, Statement on Diversity and Inclusion, and Supplier Code
of Conduct, set standards for both our staff and, where relevant, stakeholders whom we work with. These policies, which are available on the
Company’s website, are regularly reviewed and refined, when necessary, in line with international best practices.
Strong Governance Framework
Keppel is focused on upholding high standards of corporate governance and business ethics. We have a strong and independent board, with six
independent directors out of a total of nine directors. We have a Board Diversity Policy and are committed to board diversity in terms of skills,
knowledge, experience and other aspects of diversity, such as gender, age, ethnicity and nationality. We maintain clear, consistent and regular
communication with Keppel’s shareholders and the investment community.
Internal Controls and Risk Management
Keppel’s System of Management Controls comprises the Three-Lines Model to ensure the adequacy and effectiveness of the Group’s system
of internal controls and risk management. Details are disclosed on pages 94 and 95. The Group’s Sustainability Risk Management Framework is
integrated within the Group’s Enterprise Risk Management Framework, and guides the Group’s companies on the specific processes and methods
applied in identifying, assessing and managing sustainability-related risks and opportunities.
For more information on Governance, please refer to page 76.
MEASURING PERFORMANCE
Performance Scorecard
The Company’s performance scorecard aligns compensation with corporate and individual performance, both in terms of financial and non-financial
performance. Key sub-targets within each of the scorecard areas include key financial indicators, risk management, compliance and controls measures,
safety goals, environmental sustainability (including carbon emissions reduction targets), employee engagement, talent development and succession
planning. Environmental sustainability targets make up 7.5% of the Company’s performance scorecard.
Employees
Customers
Governments
Shareholders & Investors
Suppliers
Local Communities
MSCI ACWI ESG Leaders Index and
MSCI World ESG Leaders Index
iEdge SG ESG Leaders Index and
iEdge SG ESG Transparency Index
FTSE4Good Index
Euronext Vigeo World
120 Index
Industry Mover in the S&P Global
Sustainability Yearbook 2022
For more information, view our Sustainability Report on our website at www.kepcorp.com
We publish sustainability reports annually, and the next report will be published in May 2022. Our sustainability reports draw on international standards of reporting,
including the Global Reporting Initiative Standards, and are externally assured. The reports are also aligned with sustainability reporting requirements by the
Singapore Exchange.
Winner of the Singapore
Corporate Governance
Award 2021 (Big Cap)
at the Securities Investors
Association (Singapore)
Investors’ Choice
Awards 2021
Apex Winner in the
Sustainable Business
category at the Global
Compact Network
Singapore’s Singapore
Apex Corporate
Sustainability Awards 2021
The Keppel Group won
18 Workplace Safety
and Health Awards
Charity Platinum
Award at the
Community Chest
Awards 2021
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Keppel Corporation Limited
Annual Report 2021
GROUP OVERVIEW
30
SUSTAINABILITY FRAMEWORK
31
We are committed to the international sustainable development agenda, and leverage collaboration and partnership to support the achievement
of the United Nations Sustainable Development Goals (SDGs). We have incorporated 10 of the SDGs as a supporting framework to guide our
sustainability strategy.
Strategic Pillar: Environmental Stewardship
MATERIAL ISSUES
Climate Action
HIGHLIGHTS
Keppel has committed to halve its Scope 1 and 2 carbon emissions by 2030, compared to 2020 levels,
and achieve net zero by 2050.
APPROACH
Keppel is committed to running its
business sustainably. We also provide
solutions which help our communities
and customers reduce carbon emissions
and contribute to climate action.
We are refocusing the Group’s portfolio
on sustainable urbanisation solutions,
including through evaluating their fit with
Keppel’s Vision, Mission and ESG goals,
and the risks and opportunities associated
with climate change, as well as internal
shadow carbon pricing.
Keppel will also contribute to climate action
through its corporate social responsibility
and public engagement efforts.
Since 2020, Keppel has adopted an evolutionary shadow carbon pricing policy to evaluate major
investment decisions, in order to contribute to climate action, mitigate climate-related risks, prepare for
tougher climate legislation and higher carbon prices, and avoid stranded assets. We will continue to
review and refine our shadow carbon price in response to changes in international carbon tax regimes.
Keppel has set a target to grow its renewable energy portfolio to 7.0GW by 2030, and has since 2020
announced renewables projects with a total capacity of 1.1GW.
Many of the Group’s new business pursuits and research and development efforts in the past year were
in renewables, clean energy, decarbonisation and environmental solutions. These include the acquisition by
Keppel Corporation together with a Keppel Capital consortium, of a majority joint venture stake in Cleantech
Renewable Assets, a leading solar energy platform, exploring the import of renewable energy to Singapore,
developing electric vehicle charging infrastructure, securing Singapore’s first Energy-as-a-Service
contract, and studying the feasibility of developing an Asia-Pacific green ammonia supply chain.
The iconic Keppel Marina East Desalination Plant (KMEDP), Singapore’s first large-scale, dual-mode
desalination plant, was officially opened in February 2021, contributing to Singapore’s water security
amidst increasing rainfall uncertainty caused by climate change. In June, KMEDP was named
‘Desalination Plant of the Year’ at the Global Water Awards 2021.
Keppel Offshore & Marine (Keppel O&M) continued to seize opportunities in renewables and gas
solutions, which made up 39% of its orderbook as at end-2021.
The built environment is a significant contributor to carbon emissions. Keppel Land is contributing
to(cid:632)climate action through developing smart and sustainable offices of the future, including Keppel
Towers, which garnered the BCA Green Mark Platinum Super Low Energy Award for its innovative and
green features in 2021.
Keppel Data Centres is also looking into reducing the carbon footprint of its data centres, including
through exploring the development of energy-efficient floating data centres.
Keppel is also contributing to nature-based solutions to climate change by supporting environmental
initiatives such as the National Parks Board’s OneMillionTrees movement. Keppel committed $3 million
to support the planting of 10,000 trees over five years in parks and nature reserves in Singapore. In May
2021, a tree planting event was held to commemorate the start of this pledge.
In November 2021, Keppel further pledged to donate $1 million to support the development of the
Keppel Coastal Trail at Labrador Nature Reserve. The Trail will help safeguard core habitats and critically
endangered native species in the nature reserve, as well as enhance public awareness of the role of
coastal forests in mitigating the impact of climate change and rising sea levels.
MATERIAL ISSUES
Environmental Management
HIGHLIGHTS
We have set high-impact sustainability goals and are committed to long-term targets to reduce our
carbon emissions, as well as water and waste intensity.
APPROACH
We are committed to minimising our
environmental impact and are focused on
sustainable management and efficient use
of natural resources.
We aim to reduce the Group’s carbon
emissions, reduce waste generation through
resource efficiency, recycling and reuse of
natural resources, as well as reduce water
intensity through active monitoring and
water-efficiency programmes.
Keppel Corporation Limited
Beyond the Scope 1 and 2 carbon emissions reduction targets highlighted above, we have conducted a
high-level screening of our Scope 3 emissions and continue to progressively expand the coverage of the
relevant categories. We will work with the Group’s portfolio of investments and supply chain to improve
energy efficiency and reduce emissions where possible.
Keppel has also committed to achieving a 10% reduction in waste intensity and 20% reduction in water
consumption intensity by 2030 from 2019 levels.
We have laid out a roadmap to contribute to global decarbonisation efforts. This includes refocusing
our portfolio on sustainable urbanisation solutions, greening our properties, lowering emissions intensity
of our infrastructure assets, purchasing and using renewable energy where possible, reducing the
carbon footprint of our data centres, investing in clean, new businesses, greening urban cooling,
advancing the circular economy through Keppel’s proprietary technologies, and investing in
sustainability-related innovation.
Keppel Bay Tower, where Keppel Corporation is headquartered, was certified by the Building and Construction
Authority (BCA) as Singapore’s first Green Mark Platinum (Zero Energy) commercial building. Since the
end of 2018, Keppel Corporation’s corporate headquarters in Singapore has been powered by renewable
energy. We also acquired carbon credits to offset Scope 3 emissions from business travel and
employee commuting, thus allowing our corporate office at Keppel Bay Tower to(cid:632)achieve carbon
neutrality for its operations since 2020.
Keppel Seghers is developing the Hong Kong Integrated Waste Management Facility (IWMF) and
the(cid:632)Tuas Nexus IWMF in Singapore, in joint ventures with industry partners. Both IWMFs utilise
Keppel(cid:632)Seghers’ proprietary SIGMA combustion control, moving grates technology and boiler design
to(cid:632)provide superior waste combustion and energy recovery.
Strategic Pillar: Responsible Business
MATERIAL ISSUES
Corporate Governance & Risk Management
APPROACH
We are committed to being an effective,
accountable and transparent institution,
and will conduct ourselves according to the
highest ethical standards and comply with
all applicable laws and regulations wherever
we operate. Our tone on regulatory
compliance is clear and consistently
reiterated from the top of the organisation.
We have zero tolerance for fraud, bribery,
corruption and violation of laws and
regulations.
As part of risk management, Keppel has
robust business continuity plans in place to
safeguard against different strategic risks,
including risks related to sustainability
and climate change.
HIGHLIGHTS
With COVID-19 continuing to impact the global economy in 2021, Keppel continued to have robust
business continuity plans in place, allowing the Group to operate effectively, despite the impact of the
pandemic and various measures implemented to curb its spread.
Reflecting Keppel’s zero tolerance for fraud, bribery, corruption and violation of laws and regulations,
we(cid:632)have continued to enhance our compliance measures, including rolling out the ISO 37001 Anti-Bribery
Management System across business units. Apart from Keppel O&M and the Singapore entities of
Keppel Land and Keppel Data Centres which have achieved ISO 37001 certification, Keppel Infrastructure
and the overseas entities of Keppel Land (China, Vietnam and Indonesia) also achieved certification in 2021.
In 2021, Keppel continued to adopt an effective and balanced approach to risk management to optimise
returns, while taking into consideration business risks and corporate sustainability. We focused in particular
on cyber security, in view of the increased risks of cyber attacks. We also enhanced the monitoring of
climate-related risks across business units, in alignment with the recommendations of the Task Force
on Climate-related Financial Disclosures (TCFD).
In recognition of Keppel’s strong corporate governance and sustainability practices, the Company won
the(cid:632)Singapore Corporate Governance Award (Big Cap) at the Securities Investors Association (Singapore)
Investors’ Choice Awards 2021, and was Apex Winner at the Singapore Apex Corporate Sustainability
Awards 2021. Keppel also retained the highest AAA rating in the Morgan Stanley Capital International (MSCI)
ESG ratings in December 2021.
MATERIAL ISSUES
Economic Sustainability
APPROACH
Keppel views sustainability both as a corporate
responsibility and a source of business
opportunities. Guided by Keppel’s Vision 2030,
we are growing our business as a provider of
solutions for sustainable urbanisation, and in
so doing, driving economic development, and
contributing to the well-being of communities
wherever we operate.
HIGHLIGHTS
Keppel’s business operations generate employment, opportunities for suppliers, products and services
for customers, tax revenues for governments and dividends for shareholders. Through the solutions
that we develop and operate, we are contributing to infrastructure and urban development, enhancing
connectivity and sustainable development.
We have set targets to invest in sustainability-linked innovation, and are tapping our engineering
nous to explore greener solutions such as energy-efficient floating data centre parks, as well as
climate-resilient nearshore urban developments, or “floating cities”, which can mitigate the impact
of(cid:632)rising sea levels.
Keppel Telecommunications & Transportation is collaborating with partners to jointly own and
develop(cid:632)the Bifrost Cable System which will directly connect Singapore to the west coast of
North(cid:632)America, while M1 is rolling out its 5G Standalone network, thus contributing to enhancing
communications infrastructure.
MATERIAL ISSUES
Supply Chain & Responsible Procurement
APPROACH
We recognise the importance of supply
chain risk management and sustainable
procurement, and are committed to building
a resilient and diversified supply chain. To
this end, we work closely with our suppliers
to make a positive impact on their
sustainability performance.
HIGHLIGHTS
All our suppliers are qualified in accordance with our requisition and purchasing policies, screened
based on ESG criteria and are expected to sign and abide by Keppel’s Supplier Code of Conduct,
which(cid:632)is publicly available online.
The Group was able to continue operating effectively despite supply chain disruptions caused by
the(cid:632)pandemic, in part due to the robust supplier diversification programmes in place, as well as the
steps undertaken by management to mitigate the impact of the pandemic. For example, Keppel O&M
worked closely with its(cid:632)customers to reorganise work processes, leveraging its global network of yards,
to ensure that it could continue to deliver its projects in accordance with customers’ requirements,
despite the impact of(cid:632)COVID-19.
MATERIAL ISSUES
Product Quality & Safety
APPROACH
We drive innovation and exercise due care
and diligence in the design, construction and
operation of our products and provision of
services, to ensure they meet the highest
standards of quality and do not pose
hazards to customers and users.
HIGHLIGHTS
We continue to drive innovation both at the Group level and within individual business units to
improve(cid:632)product quality. Innovative projects launched in 2021 include the iconic condominium project
in Singapore, the Reef at King’s Dock, which features a floating deck to raise awareness of marine
biodiversity and conservation. M1 is also providing its customers with made-to-measure offerings,
supported by its digital transformation, as well as 5G-powered digital solutions for enterprises,
such(cid:632)as(cid:632)the suite of intelligent solutions deployed at Marina at Keppel Bay in conjunction with the
launch of M1’s 5G Standalone network, that leverage 5G to improve efficiency while providing better
services for customers.
In terms of product safety, we carefully consider the health and safety impact of our products across
their different life-cycle stages, starting from design & development to use and handling. We have also
established robust Quality Assurance programmes to ensure our products meet customers’ specifications
and all applicable regulatory requirements. For major projects developed by the Group, we carry out
regular quality, health and safety reviews before they are handed over to our customers. We are
committed to act on any feedback from our customers and also regularly engage customers to drive
continuous improvement.
Annual Report 2021
GROUP OVERVIEW
32
SUSTAINABILITY FRAMEWORK
33
Strategic Pillar: People and Community
Strategic Pillar: People and Community
MATERIAL ISSUES
Occupational Health & Safety
APPROACH
Providing a safe and healthy work
environment for all stakeholders is
fundamental to our commitment to
conducting business responsibly.
We are also strong advocates for safety
and(cid:632)health in the broader community,
and(cid:632)champion national and industry
initiatives to raise standards and drive
innovation in these areas.
HIGHLIGHTS
Keppel achieved its zero-fatality target for its global operations in 2021, and saw improvements across
its Total Recordable Injury, Accident Frequency and Accident Severity Rates. The Group also clinched
18 awards at the Singapore Workplace Safety and Health Awards 2021.
Key safety initiatives implemented in 2021 include an initiative to encourage and empower all
employees and stakeholders to speak up and intervene when they encounter unsafe behaviours.
Keppel also continued its Safety Digital Transformation journey by digitalising most of the existing
manual safety processes such as reporting hazards and applying for permit-to-work. When sufficient
data is collected, data analytics will be conducted to sharpen our efforts in proactive accident prevention.
As COVID-19 continued to spread globally in 2021, safeguarding the health and safety of our employees,
customers and stakeholders remained a top priority. To this end, Keppel continued to implement robust
safe management measures in accordance with government regulations. The measures implemented
include split-team arrangements, regular inspections to ensure safe management measures are
maintained, health monitoring through Antigen Rapid Testing, regular disinfection of high touch-points
and enhanced cleaning procedures.
We also track the vaccination status of our workforce and strongly encourage those who are
medically eligible to be vaccinated. By the end of 2021, the vast majority of Keppel’s workforce has
been fully vaccinated.
With COVID-19 taking a toll on mental wellness, we also stepped up efforts to improve the overall
well-being of our employees, with a focus on mental health. These include organising workshops and
campaigns on mental wellness, as well as activities to promote healthy lifestyles.
MATERIAL ISSUES
Labour Practices, Talent Management
& Human Rights
HIGHLIGHTS
Keppel’s hiring policies ensure equal employment opportunities for all. We are also committed to
nurturing and developing our employees.
APPROACH
Keppel is committed to fair employment
practices, upholding human rights principles,
and investing in people development. We are
committed to diversity and inclusion, and
value and respect our employees regardless
of ethnicity, gender, religious beliefs,
nationality, age or any physical disability.
We respect the fundamental principles set
out in the United Nations (UN) Universal
Declaration of Human Rights and the
International Labour Organisation’s
Declaration on Fundamental Principles and
Rights at Work. Our stance on human rights
is articulated in the Keppel Group Human
Rights Policy while our stance on diversity
and inclusion is articulated in our Corporate
Statement on Diversity and Inclusion. Both
statements are publicly available online.
In 2021, as part of the Group’s succession planning, talent development and strategic workforce
planning, leadership renewal was announced in a few key business units and an extensive talent
mapping exercise was carried out.
We continue to actively engage staff to help ensure that they feel connected and motivated amidst
COVID-19 and work-from-home arrangements. Since the start of the pandemic, Keppel has harnessed
IT collaborative tools to facilitate effective telecommuting and virtual townhalls. Other events were also
organised to promote employee well-being, including virtual team-building activities and activities that
promote healthy lifestyles.
To build a workplace where our employees can learn, grow, and fulfil their potential, we launched various
new initiatives in 2021. These include a Global Learning Festival to foster a positive learning culture,
and an International Career Week to equip employees with skills to develop their careers. The Group
achieved an average of 20 hours of training per employee in 2021.
The Group achieved an Employee Engagement Score of 84% in 2021, about 6% above Mercer’s
Singapore average, and 4% above Mercer’s global average.
Migrant workers are an important part of Keppel’s workforce, especially in the offshore & marine sector.
As part of Keppel O&M’s continuing efforts to enhance the well-being of migrant workers, Keppel O&M
wrote to its contractors and employment agencies in 2021 to require them to abide by the Dhaka
Principles for Migration with Dignity1 going forward.
MATERIAL ISSUES
Community Development
HIGHLIGHTS
Since the start of the COVID-19 pandemic, Keppel has disbursed about $5.5 million to provide support to
communities affected by the pandemic in Singapore and overseas.
APPROACH
We believe firmly that the Company
does well when the community does
well. Through collaboration with our
stakeholders, we mobilise and share
knowledge, as well as financial and
human resources to uplift lives and
support the achievement of the SDGs.
We also encourage and promote
effective public, public-private and civil
society partnerships through the
sponsorship and support of community
initiatives, as well as thought leadership
and dialogue platforms.
COVID-19-related assistance announced in 2021 include a $300,000 donation to the Digital for Life Fund
set up by the Infocomm Media Development Authority to help connect seniors affected by the pandemic,
as well as a donation of 150 new laptops to the Ministry of Social and Family Development’s Community
Link initiative to support home-based learning by students from lower-income families. In addition,
Keppel(cid:632)donated $120,000 to Willing Hearts, a volunteer-run soup kitchen for underprivileged and needy
communities in Singapore. Keppel volunteers have been regularly contributing at Willing Hearts, and will
continue to do so over the next three years.
Beyond Singapore, Keppel also contributed to communities overseas. Keppel announced VND7.4 billion
of assistance to support COVID-19 relief efforts in Vietnam, including vaccination efforts and providing
medical supplies to local hospitals in affected regions.
In 2021, the Group invested a total of $4.6 million2 in social investment spending, including $2.4 million
disbursed through the Keppel Care Foundation, the Group’s philanthropic arm.
Keppel Care Foundation has disbursed over $50 million in support of worthy community causes since its
establishment in 2012.
Beyond financial support, Keppel staff also volunteer their time and services to contribute to the
community. Despite restrictions imposed by COVID-19, Keppel Volunteers contributed more than
12,000 hours of community work in 2021, exceeding the target of 10,000 hours for the year.
SOCIAL INVESTMENT SPENDING BY
PROJECT TYPE IN 2021 (%)
Healthcare/Care for the Underprivileged
The Arts/Community Development Projects
Education
Environment
Industry Advancement
Total
$4.6 million
32.2
14.6
24.2
23.2
5.8
100.0
1 The Dhaka Principles are a set of human rights-based principles that aim to protect the rights of migrant workers, including the provision of clear and transparent worker
contracts and no charging of recruitment fees.
2 The $4.6 million includes voluntary contributions from the Keppel Group's directors, senior management and staff to support COVID-19 relief efforts.
Keppel Corporation Limited
Annual Report 2021
GROUP OVERVIEW
BOARD OF DIRECTORS
34
Board Committees
N
Nominating Committee
A Audit Committee
R
Remuneration Committee
BR Board Risk Committee
BS
Board Safety Committee
Keppel Corporation Limited
DANNY TEOH, 66
Chairman
Non-Executive and Non-Independent Director
LOH CHIN HUA, 60
Executive Director and
Chief Executive Officer
N R BS
BS
Date of first appointment as a director:
1 October 2010
Date of first appointment as a director:
1 January 2014
Date of last re-election as a director:
2 June 2020
Date of last re-election as a director:
23 April 2019
Length of service as a director
(as at 31 December 2021):
11 years 3 months
Length of service as a director
(as at 31 December 2021):
8 years
Board Committee(s) served on:
Nominating Committee (Member);
Remuneration Committee (Member);
Board Safety Committee (Member)
Academic & Professional Qualification(s):
Associate member of the Institute of Chartered
Accountants in England & Wales
Present Directorships (as at 1 January 2022):
Listed companies
Nil
Other principal directorships
Nil
Major Appointments (other than directorships):
Nil
Past Directorships held over the preceding
5 years (from 1 January 2017 to
31 December 2021):
JTC Corporation; Ascendas – Singbridge Pte. Ltd.;
DBS Bank (China) Limited; Changi Airport Group
(Singapore) Pte Ltd; DBS Group Holdings Ltd;
DBS Bank Ltd; DBS Foundation Ltd;
DBS Bank (Taiwan) Ltd; M1 Limited
Others:
Former Managing Partner, KPMG LLP,
Singapore; Past member of KPMG’s
International Board and Council;
Former Head of Audit and Risk Advisory
Services and Head of Financial Services,
KPMG LLP
Board Committee(s) served on:
Board Safety Committee (Member)
Academic & Professional Qualification(s):
Bachelor in Property Administration, Auckland
University; Presidential Key Executive MBA,
Pepperdine University; CFA® charterholder
Present Directorships (as at 1 January 2022):
Listed companies
Nil
Other principal directorships
Keppel Offshore & Marine Ltd (Chairman);
Keppel Land Limited (Chairman); Keppel
Infrastructure Holdings Pte. Ltd. (Chairman);
Keppel Capital Holdings Pte. Ltd. (Chairman);
Keppel Telecommunications & Transportation
Ltd (Chairman); Keppel Care Foundation
Limited; M1 Limited (Chairman)
Major Appointments (other than directorships):
National University of Singapore (Member of
Board of Trustees); Singapore Economic
Development Board (Board Member);
EDB Investments Pte Ltd (Board Member)
Past Directorships held over the preceding
5 years (from 1 January 2017 to
31 December 2021):
Various fund companies under(cid:632)management
of Alpha Investment Partners Limited;
Various companies under Keppel Group
of companies
Others:
Nil
35
TILL VESTRING, 58
Non-Executive and
Lead Independent Director
NR
VERONICA ENG, 68
Non-Executive and
Independent Director
BR
A
JEAN-FRANÇOIS MANZONI, 60
Non-Executive and
Independent Director
N
R
Date of first appointment as a director:
16 February 2015
Date of first appointment as a director:
1 July 2015
Date of first appointment as a director:
1 October 2018
Date of last re-election as a director:
2 June 2020
Date of last re-election as a director:
2 June 2020
Date of last re-election as a director:
23 April 2021
Length of service as a director
(as at 31 December 2021):
6 years 11 months
Length of service as a director
(as at 31 December 2021):
6 years 6 months
Length of service as a director
(as at 31 December 2021):
3 years 3 months
Board Committee(s) served on:
Remuneration Committee (Chairman);
Nominating Committee (Member)
Board Committee(s) served on:
Board Risk Committee (Chairman);
Audit Committee (Member)
Board Committee(s) served on:
Nominating Committee (Chairman);
Remuneration Committee (Member)
Academic & Professional Qualification(s):
Master of Economics, University of Bonn, Germany;
Master of Business Administration, Haas School
of Business, University of California, Berkeley
Present Directorships (as at 1 January 2022):
Listed companies
Inchcape plc
Other principal directorships
Leap Philanthrophy Ltd; Advanced Micro Foundry
Pte. Ltd.; Delaware Consulting International CVBA;
Keppel Telecommunications & Transportation Ltd
Major Appointments (other than directorships):
Advisory Partner, Bain & Company Southeast Asia
Past Directorships held over the preceding
5 years (from 1 January 2017 to
31 December 2021):
Singapore Chinese Orchestra Company Limited
Others:
Nil
Academic & Professional Qualification(s):
Bachelor of Business Administration
(First Class Honours), University of Singapore
Present Directorships (as at 1 January 2022):
Listed companies
Nil
Other principal directorships
Keppel Capital Holdings Pte. Ltd.;
Eastspring Investments Group Pte. Ltd.
Academic & Professional Qualification(s):
DBA, Harvard Business School, Boston;
MBA, McGill University, Montreal; Bachelor,
Business Administration, l’Ecole des Hautes
Etudes Commerciales de Montréal; Fellow of
the Singapore Institute of Directors
Present Directorships (as at 1 January 2022):
Listed companies
Nil
Major Appointments (other than directorships):
Professor (Practice), NUS Business School
Other principal directorships
IMD Foundation Board; IMD Scholarship
Foundation
Past Directorships held over the preceding
5 years (from 1 January 2017 to
31 December 2021):
Nil
Others:
Founding Partner of Permira (1985 to 2015);
Former Member of the Board and Executive
Committee of Permira
Major Appointments (other than directorships):
President and Nestlé Professor, International
Institute for Management Development (IMD),
Switzerland; Member of several International
Advisory panels, including Digital Switzerland
and Russian Presidential Academy of
National Economy and Public Administration
Past Directorships held over the preceding
5 years (from 1 January 2017 to
31 December 2021):
Singapore Civil Service College;
Association to Advance Collegiate Schools
of Business (AACSB) International
Others:
Nil
Annual Report 2021
GROUP OVERVIEW
36
BOARD OF DIRECTORS
Keppel Corporation Limited
TEO SIONG SENG, 67
Non-Executive and
Non-Independent Director
BS
THAM SAI CHOY, 62
Non-Executive and
Independent Director
A BR
Date of first appointment as a director:
1 November 2019
Date of first appointment as a director:
1 November 2019
Date of last re-election as a director:
2 June 2020
Date of last re-election as a director:
2 June 2020
Length of service as a director
(as at 31 December 2021):
2 years 2 months
Length of service as a director
(as at 31 December 2021):
2 years 2 months
Board Committee(s) served on:
Board Safety Committee (Chairman)
Academic & Professional Qualification(s):
Degree in Naval Architecture and
Ocean Engineering from the
University of Glasgow, United Kingdom
Present Directorships (as at 1 January 2022):
Listed companies
Singamas Container Holdings Ltd.; COSCO
Shipping Holding Co., Ltd.; COSCO Shipping
Energy Transportation Co., Ltd.; Wilmar
International Limited
Other principal directorships
Pacific International Lines (Pte) Ltd;
PIL Pte. Ltd.
Major Appointments (other than directorships):
Business China (Director); The United Republic
of Tanzania in Singapore (Honorary Consul)
Past Directorships held over the preceding
5 years (from 1 January 2017 to
31 December 2021):
Enterprise Singapore (Board member)
Others:
Singapore Chinese Chamber of
Commerce & Industry (Honorary President);
Immediate Past Chairman of Singapore
Business Federation
Board Committee(s) served on:
Audit Committee (Chairman);
Board Risk Committee (Member)
Academic & Professional Qualification(s):
Bachelor of Arts (Honours) in Economics,
University of Leeds, United Kingdom;
Fellow of the Institute of Singapore Chartered
Accountants and the Institute of Chartered
Accountants in England and Wales
Present Directorships (as at 1 January 2022):
Listed companies
DBS Group Holdings Limited
Other principal directorships
DBS Bank Ltd.; DBS Bank (China) Limited;
DBS Foundation Ltd; EM Services Pte Ltd
(Chairman); Keppel Offshore & Marine Ltd;
Mount Alvernia Hospital; Singapore International
Arbitration Centre
Major Appointments (other than directorships):
Nanyang Polytechnic (Board member)
Past Directorships held over the preceding
5 years (from 1 January 2017 to
31 December 2021):
Singapore Accountancy Commission;
KPMG Group of Companies; Singapore
Institute of Directors (Chairman);
Housing & Development Board;
Accounting and Corporate Regulatory Authority
Others:
Nil
PENNY GOH, 69
Non-Executive and
Independent Director
A BR
SHIRISH APTE, 69
Non-Executive and
Independent Director
A BR
Date of first appointment as a director:
2 January 2020
Date of first appointment as a director:
1 July 2021
Date of last re-election as a director:
2 June 2020
Date of last re-election as a director:
N.A.
Length of service as a director
(as at 31 December 2021):
2 years
Length of service as a director
(as at 31 December 2021):
6 months
Board Committee(s) served on:
Audit Committee (Member);
Board Risk Committee (Member)
Board Committee(s) served on:
Audit Committee (Member);
Board Risk Committee (Member)
Academic & Professional Qualification(s):
Bachelor of Law (Honours), University
of Singapore
Present Directorships (as at 1 January 2022):
Listed companies
Keppel REIT Management Limited (the Manager
of Keppel REIT) (Chairman)
Other principal directorships
HSBC Bank (Singapore) Limited (Chairman);
Singapore Totalisator Board;
Keppel Land Limited
Major Appointments (other than directorships):
Allen & Gledhill LLP (Senior Adviser)
Past Directorships held over the preceding
5 years (from 1 January 2017 to
31 December 2021):
Mapletree Logistics Trust Management Ltd
(the Manager of Mapletree Logistics Trust);
Eastern Development Private Limited;
Eastern Development Holdings Pte Ltd;
Allen & Gledhill Regulatory & Compliance Pte. Ltd.
Others:
Former Co-Chairman and Senior Partner
of Allen & Gledhill LLP
Academic & Professional Qualification(s):
Qualified as a Member of the Institute of
Chartered Accountants in England & Wales;
Member of the Institute of Chartered
Accountants, India
Present Directorships (as at 1 January 2022):
Listed companies
Commonwealth Bank of Australia
Other principal directorships
Pierfront Capital Mezzanine Fund Pte Ltd
(Chairman); Fullerton India Credit Company
Limited, India (Chairman); Pierfront Capital
Fund Management Pte. Ltd. (Chairman);
KP Management (GL) Pte. Ltd.; KPCF Investments
Pte. Ltd.; Keppel Infrastructure Holdings Pte. Ltd;
Aviva Singlife Holdings Pte. Ltd.; Aviva Financial
Advisers Pte. Ltd.(Chairman)
Major Appointments (other than directorships):
Nil
Past Directorships held over the preceding
5 years (from 1 January 2017 to
31 December 2021):
IHH Healthcare Berhad, Malaysia; Acibadem
Healthcare, Turkey; Integrated Hospitals and
Healthcare Bhd; Citi Bank Handlowy, Poland;
CG Power & Industrial Solutions; Clifford Capital
Holdings Pte Ltd; Clifford Capital Pte Ltd;
Fortis Healthcare Limited, India
Others:
Nil
37
Annual Report 2021
GROUP OVERVIEW
KEPPEL GROUP BOARDS OF DIRECTORS
38
KEPPEL OFFSHORE & MARINE
KEPPEL LAND
KEPPEL TELECOMMUNICATIONS
& TRANSPORTATION
LOH CHIN HUA
Chairman
Chief Executive Officer,
Keppel Corporation
CHAN HON CHEW
Chief Financial Officer,
Keppel Corporation
LOUIS LIM
Chief Executive Officer
PENNY GOH
Senior Adviser,
Allen & Gledhill LLP
CHRISTINA TAN
Chief Executive Officer,
Keppel Capital
TAN SWEE YIOW
Senior Managing Director of
Urban Development,
Keppel Corporation
LOH CHIN HUA
Chairman
Chief Executive Officer,
Keppel Corporation
CHAN HON CHEW
Chief Financial Officer,
Keppel Corporation
THOMAS PANG THIENG HWI
Chief Executive Officer
TILL VESTRING
Independent Director,
Keppel Corporation
WONG WAI MENG
Chief Executive Officer,
Keppel Data Centres
CHRISTINA TAN
Chief Executive Officer,
Keppel Capital
FRANCOIS VAN RAEMDONCK
Director of Group Strategy and Development,
Keppel Corporation
MANJOT SINGH MANN
Chief Executive Officer,
M1
CHUA HSIEN YANG
Director of Group Mergers & Acquisitions,
Keppel Corporation
KEPPEL INFRASTRUCTURE
LOH CHIN HUA
Chairman
Chief Executive Officer,
Keppel Corporation
CHAN HON CHEW
Chief Financial Officer,
Keppel Corporation
CINDY LIM
Chief Executive Officer
SHIRISH APTE
Independent Director,
Keppel Corporation
LOUIS LIM
Chief Executive Officer,
Keppel Land
CHRIS ONG LENG YEOW
Chief Executive Officer,
Keppel Offshore & Marine
BRIDGET LEE
Chief Executive Officer,
Keppel Capital Alternative Asset
LOH CHIN HUA
Chairman
Chief Executive Officer,
Keppel Corporation
CHAN HON CHEW
Chief Financial Officer,
Keppel Corporation
CHRIS ONG LENG YEOW
Chief Executive Officer
THAM SAI CHOY
Independent Director,
Keppel Corporation
TAN EK KIA
Chairman,
Star Energy Group Holdings Pte Ltd
LIM CHIN LEONG
Former Chairman of Asia,
Schlumberger
STEPHEN PAN YUE KUO
Chairman,
World-Wide Shipping Agency Limited
CHUA HSIEN YANG
Director of Group Mergers & Acquisitions,
Keppel Corporation
Keppel Corporation Limited
39
KEPPEL CAPITAL
LOH CHIN HUA
Chairman
Chief Executive Officer,
Keppel Corporation
CHAN HON CHEW
Chief Financial Officer,
Keppel Corporation
CHRISTINA TAN
Chief Executive Officer
VERONICA ENG
Independent Director,
Keppel Corporation
LOUIS LIM
Chief Executive Officer,
Keppel Land
THOMAS PANG THIENG HWI
Chief Executive Officer,
Keppel Telecommunications & Transportation
CINDY LIM
Chief Executive Officer,
Keppel Infrastructure
KEPPEL DC REIT MANAGEMENT
(MANAGER OF KEPPEL DC REIT)
KEPPEL PACIFIC OAK US REIT
MANAGEMENT (MANAGER OF
KEPPEL PACIFIC OAK US REIT)
CHRISTINA TAN
Chairman
Chief Executive Officer,
Keppel Capital
KENNY KWAN
Lead Independent Director and Principal,
Baker & McKenzie
LEE CHIANG HUAT
Independent Director
TAN TIN WEE
Chief Executive,
National Supercomputing Centre, Singapore
DILEEP NAIR
Independent Director
LOW HUAN PING
Independent Director
THOMAS PANG THIENG HWI
Chief Executive Officer,
Keppel Telecommunications & Transportation
PETER MCMILLAN III
Chairman
Co-founder,
Pacific Oak Capital Advisors LLC
SOONG HEE SANG
Lead Independent Director
JOHN J. AHN
President,
Whitehawk Capital Partners, L.P.
KENNETH TAN JHU HWA
Co-Managing Partner and Managing Director,
Southern Capital Group Private Limited
SHARON WORTMANN
Independent Director
BRIDGET LEE
Chief Executive Officer,
Keppel Capital Alternative Asset
KEPPEL REIT MANAGEMENT
(MANAGER OF KEPPEL REIT)
KEPPEL INFRASTRUCTURE FUND
MANAGEMENT (TRUSTEE-MANAGER
OF KEPPEL INFRASTRUCTURE TRUST)
PENNY GOH
Chairman
Senior Adviser,
Allen & Gledhill LLP
IAN RODERICK MACKIE
Lead Independent Director and Chairman,
Urban Land Institute Australia
ALAN RUPERT NISBET
Independent Director
CHRISTINA TAN
Chief Executive Officer,
Keppel Capital
TAN SWEE YIOW
Senior Managing Director of
Urban Development,
Keppel Corporation
FONG MUN NGIN, MERVYN
Advisory Board Member,
Spark Systems Pte. Ltd.
YOICHIRO HAMAOKA
Independent Director
DANIEL CUTHBERT EE HOCK HUAT
Chairman
THIO SHEN YI
Joint Managing Director,
TSMP Law Corporation
MARK ANDREW YEO KAH CHONG
Independent Director
KUNNASAGARAN CHINNIAH
Independent Director
SUSAN CHONG SUK SHIEN
Chief Executive Officer,
Greenpac (S) Pte Ltd
CHRISTINA TAN
Chief Executive Officer,
Keppel Capital
M1
LOH CHIN HUA
Chairman
Chief Executive Officer,
Keppel Corporation
MANJOT SINGH MANN
Chief Executive Officer
CHAN HON CHEW
Chief Financial Officer,
Keppel Corporation
TAN WAH YEOW
Independent Director
GUY DANIEL HARVEY SAMUEL
Independent Director
THOMAS PANG THIENG HWI
Chief Executive Officer,
Keppel Telecommunications & Transportation
JANICE WU SUNG SUNG
Executive Vice President,
Corporate Development,
Singapore Press Holdings
CHUA HWEE SONG
Chief Financial Officer,
Singapore Press Holdings
Annual Report 2021
GROUP OVERVIEW
KEPPEL TECHNOLOGY ADVISORY PANEL
40
The Keppel Technology Advisory
Panel seeks to advance the Group’s
technology leadership.
Established in 2004, the Keppel Technology
Advisory Panel (KTAP) comprises eminent
business leaders and industry experts
from(cid:632)across the world. Drawing from the
diverse experience and knowledge of its
members, KTAP allows Keppel to keep
abreast of the changing global technology
landscape across the Group’s Vision 2030
focus areas.
KTAP guides the Group’s innovation
journey from ideation to implementation,
providing advice for strategic projects and
facilitating access to technology, partners
and collaborators. Through continuous
dialogue and engagement with these
industry and technology experts on the
panel, Keppel’s business units gain early
access to strategic innovations under
development and receive a continuous
injection of new ideas. Assisted by
Keppel(cid:632)Technology & Innovation (KTI),
the(cid:632)Group’s business technology and
innovation platform, KTAP exercises
oversight of Keppel’s business innovation
ecosystem with the aim of harnessing
technology to accelerate growth across
the Group.
KTAP also guides the exploration of
topics(cid:632)at the Group’s annual technology
foresight conference. Over 30 distinguished
speakers from across sectors, including
academia and startups, presented on a wide
range of topics at the 2021 conference,
which focused on the latest technology
and innovation topics relevant to Keppel’s
Vision 2030 growth areas. These included
blue and green energy molecules for
Singapore, renewables and energy storage,
carbon capture, utilisation and storage,
data(cid:632)centre innovations, as well as the
use(cid:632)of blockchain in real estate and
asset(cid:632)management, among other areas.
The(cid:632)speakers provided topical overviews
designed to spark curiosity and conversations
across the Group regarding the use of
innovation, digitalisation and technology.
From left: Mr Danny Teoh (Chairman of Keppel Corporation), KTAP members including Professor Cheong Koon Hean, Dr Ng Wun Jern (Chairman of KTAP)
and Mr Ed Ansett, as well as Mr Loh Chin Hua (CEO of Keppel Corporation). Not in picture: KTAP members Dr Romain Debarre and Mr Chua Kee Lock.
Keppel Corporation Limited
41
Dr Romain Debarre spoke on the
future of renewables, and how Keppel
can contribute to the ecosystem at
KTAP 2021, KTI’s annual technology
foresight(cid:632)conference.
KTAP MEMBERS
DR NG WUN JERN (Chairman)
PROFESSOR CHEONG KOON HEAN
Dr Ng founded the Nanyang Environment &
Water Research Institute (NEWRI) in 2007 and
led it for 10 years. He was President’s Chair
Professor at the School of Civil & Environmental
Engineering, Nanyang Technological University,
and his some 400 publications on water,
wastewater and waste management and soil
remediation include IPs and commercialised
inventions. Dr Ng serves as technical advisor to
government agencies, established environmental
companies, incubators and private equity
funds, and guides start-up companies active
in ASEAN, China and South Asia.
Professor Cheong is concurrently chairman
of Ministry of National Development’s Centre
of Livable Cities and Singapore University of
Technology and Design’s Lee Kuan Yew Centre
for Innovative Cities. She was formerly CEO
of(cid:632)the Housing & Development Board from
2010 to 2020 overseeing the development
and(cid:632)management of some 1 million public
housing flats. Professor Cheong had played a
key role in major urban transformation projects
including Singapore’s new city extension at
Marina Bay and the Sino-Singapore Tianjin
Eco-City in China.
CHUA KEE LOCK
ED ANSETT
Mr Chua is the Group President & CEO of
Vertex Holdings, a Singapore-headquartered
venture capital investment holding company.
Vertex Group is a global venture capital network
comprising four early-stage technology-focused
funds (Vertex Ventures China, Vertex Ventures
Israel, Vertex Ventures US, Vertex Ventures
SEA & India), an early-stage healthcare-focused
fund (Vertex Ventures HC) and a growth
stage(cid:632)fund (Vertex Growth). He is concurrently
Managing Partner of Vertex Ventures SEA &
India, Chairman of Vertex Growth Fund as well
as Chairman of Vertex Technology Acquisition
Corporation, the first listed SPAC in Singapore.
DR ROMAIN DEBARRE
Dr Debarre is the Managing Director of
the(cid:632)Kearney Energy Transition Institute.
He(cid:632)possesses diverse experience in energy,
business strategy and scientific research.
He is a recognised energy expert who
forges(cid:632)close ties between governments,
companies and academics to leverage
technological opportunities and reduce
carbon(cid:632)emissions.
Mr Ansett is the founder and chairman of i3
Solutions Group, a consulting engineering firm,
specialising in data centres and mission-critical
facilities. He is a specialist and pioneer in the
field of high reliability critical facilities.
At the KTAP 2021 conference, Professor Cheong
Koon Hean shared insights on the future of livability
in urban areas and the ways that Keppel can add value.
Annual Report 2021
GROUP OVERVIEW
SENIOR MANAGEMENT
42
KEPPEL CORPORATION
LOH CHIN HUA
Chief Executive Officer
CHAN HON CHEW
Chief Financial Officer
CORPORATE SERVICES
TAN SWEE YIOW
Senior Managing Director
Urban Development
TAY LIM HENG
Managing Director
Keppel Urban Solutions
FRANCOIS VAN RAEMDONCK
Director
Group Strategy & Development
Managing Director
Keppel Technology & Innovation
CHUA HSIEN YANG
Director
Group Mergers & Acquisitions
YEO MENG HIN
Director
Group Human Resources
LYNN KOH
Director
Group Treasury
HO TONG YEN
Chief Sustainability Officer
(effective 1 Mar 2022)
Director
Group Corporate Communications
CAROLINE CHANG
General Manager
Group Legal
TOK SOO HWA
General Manager
Group Control & Accounts
SEPALIKA KULASEKERA
General Manager
Group Internal Audit
KENNETH LUI
General Manager
Group Risk & Compliance
TAY GUAN CHEW
General Manager
Group Tax
JASON CHIN
General Manager
Group Information Technology
Keppel Corporation Limited
MARTIN LING
General Manager
Group Cyber Security
JAGGI RAMESH KUMAR
General Manager
Group Health, Safety & Environment
ERIC GOH
Chief Representative, China
LINSON LIM
Chief Representative, Vietnam
HO KIAM KHEONG
India Representative
TEO ENG CHEONG
Chief Executive Officer
Sino-Singapore Tianjin Eco-City
Investment and Development
ENERGY & ENVIRONMENT
CHRIS ONG
Chief Executive Officer
Keppel Offshore & Marine
KEVIN CHNG
Chief Financial Officer
Keppel Offshore & Marine
CHOR HOW JAT
Managing Director
(Conversions & Repairs)
Keppel Offshore & Marine
TAN LEONG PENG
Managing Director
(New Builds)
Keppel Offshore & Marine
RON MACLNNES
President
Keppel Offshore & Marine USA
and Keppel LeTourneau
MOHD SAHLAN BIN SALLEH
President
Keppel AmFELS
MARLIN KHIEW
President
Keppel FELS Brasil
LEONG KOK WENG
President
Keppel Philippines Marine
NG SENG CHONG
President
Keppel Nantong Shipyard
Keppel Nantong Heavy Industries
CINDY LIM
Chief Executive Officer
Keppel Infrastructure
LIM SIEW HWA
Chief Financial Officer
Keppel Infrastructure
TAN BOON LENG
Managing Director,
Corporate Office and Project Development
Keppel Infrastructure
JANICE BONG
Executive Director,
Power & Renewables
Keppel Infrastructure
JACKSON GOH
Executive Director,
Environment
Keppel Infrastructure
CHUA YONG HWEE
Executive Director,
New Energy
Keppel Infrastructure
MILO DOCHOW
Executive Director,
Corporate Development
Keppel Infrastructure
GOH ENG KWANG
Executive Director,
Project Management and Water Services
Keppel Infrastructure
URBAN DEVELOPMENT
LOUIS LIM
Chief Executive Officer
Keppel Land
TAN BOON PING
Chief Financial Officer
Keppel Land
BEN LEE
Chief Operating Officer
Keppel Land
President, China
Keppel Land
(appointment till 31 Jan 2022)
WONG LIANG KIT
President, China
Keppel Land
(effective 1 Feb 2022)
NG OOI HOOI
President, Singapore and
Regional Investments
Keppel Land
(appointment till 31 Jan 2022)
JOSEPH LOW
President, Vietnam
Keppel Land
SAMUEL HENRY NG
President, Indonesia
(appointment till 31 Jan 2022)
ASSET MANAGEMENT
UNIONS
43
President, Singapore and Regional Investments
(effective 1 Feb 2022)
Keppel Land
CHRISTINA TAN
Chief Executive Officer
Keppel Capital
BRIDGET LEE
Chief Operating Officer
Keppel Capital
Chief Executive Officer
Keppel Capital Alternative Asset
ANG SOCK CHENG
Chief Financial Officer
Keppel Capital
KOH WEE LIH
Chief Executive Officer
Keppel REIT Management
JOPY CHIANG
Chief Executive Officer
Keppel Infrastructure Fund Management
ANTHEA LEE
Chief Executive Officer
Keppel DC REIT Management
DAVID SNYDER
Chief Executive Officer
Keppel Pacific Oak US REIT Management
ALVIN MAH
Chief Executive Officer
Alpha Investment Partners
DEVARSHI DAS
Chief Executive Officer
(Infrastructure)
Keppel Capital Alternative Asset
THAN SU EE
Chief Executive Officer
(Core Infrastructure)
Keppel Capital
ALLEN TAN
President, Indonesia
Keppel Land
(effective 1 Feb 2022)
HO KIAM KHEONG
President, India
Keppel Land
CONNECTIVITY
THOMAS PANG
Chief Executive Officer
Keppel Telecommunications & Transportation
TAN ENG HWA
Chief Financial Officer
Keppel Telecommunications & Transportation
WONG WAI MENG
Chief Executive Officer
Keppel Data Centres
DESMOND GAY
Chief Executive Officer
Keppel Logistics
MANJOT SINGH MANN
Chief Executive Officer
M1
Chief Digital Officer
Keppel Corporation
(effective 1 Mar 2022)
LEE KOK CHEW
Chief Financial Officer
M1
MUSTAFA KAPASI
Chief Commercial Officer
M1
DENIS SEEK
Chief Technical Officer
M1
MARK TAN
Chief Enterprise Strategy and
Business Officer
M1
WILLIS SIM
Chief Corporate Sales and
Solutions Officer
M1
NATHAN BELL
Chief Digital Officer
M1
KEPPEL FELS EMPLOYEES UNION
MAHMOOD BIN ALI
President
ATYYAH BINTI HASSAN
General Secretary
KEPPEL EMPLOYEES UNION
MOHAMED NASIR AHMAD
President
ATAN ENJAH
General Secretary
SHIPBUILDING & MARINE
ENGINEERING EMPLOYEES’ UNION
EILEEN YEO
General Secretary
NTUC Central Committee Member
SINGAPORE INDUSTRIAL &
SERVICES EMPLOYEES’ UNION
MUHAMMAD SHARIFFUDIN
President
RICHARD SIM
General Secretary
SYLVIA CHOO
Executive Secretary
UNION OF POWER & GAS EMPLOYEES
TAY SENG CHYE
President
ABDUL SAMAD BIN ABDUL WAHAB
General Secretary
S. THIAGARAJAN
Executive Secretary
Annual Report 2021
GROUP OVERVIEW
INVESTOR RELATIONS
44
WE ARE COMMITTED TO CLEAR, TIMELY
AND CONSISTENT COMMUNICATION
WITH THE INVESTMENT COMMUNITY.
As Keppel accelerates the execution
of(cid:632)its(cid:632)Vision 2030 plans, driving business
transformation and expanding into new
growth areas, we continued to actively
engage our stakeholders in the investment
community to keep them abreast of
the(cid:632)Company’s latest developments
and(cid:632)also seek their feedback. In 2021,
amidst continuing restrictions on travel
and(cid:632)in-person meetings to curb the
spread(cid:632)of COVID-19, we leveraged digital
platforms such as live webcasts and
virtual(cid:632)conferencing to communicate
with(cid:632)the investment community.
STAKEHOLDER ENGAGEMENT
During the year, we held about 270 virtual
meetings and conference calls with
institutional investors across Singapore,
Australia, Hong Kong, Japan, Malaysia,
Thailand, the UK and the US. We also
participated in a virtual investment
conference organised by the Singapore
Exchange (SGX) and Credit Suisse.
13 sell-side research houses currently
provide coverage on Keppel Corporation.
In(cid:632)addition to semi-annual results
briefings(cid:632)and voluntary business updates
in(cid:632)the intervening quarters, we held
several(cid:632)briefings for media and analysts
on(cid:632)the proposed combination of Keppel
O&M and Sembcorp Marine, including
the(cid:632)resolution of Keppel O&M’s legacy
rigs,(cid:632)as well as the proposed acquisition
of(cid:632)Singapore Press Holdings ex-Media
(SPH). We continue to actively engage
and(cid:632)maintain close interactions with
sell-side analysts, working with them
to(cid:632)help(cid:632)the investment community
better(cid:632)understand Keppel’s strategy
and(cid:632)progress towards achieving its
Vision(cid:632)2030 goals.
In 2021, we held our virtual Annual General
Meeting (AGM), and separately convened
an(cid:632)Extraordinary General Meeting (EGM)
to(cid:632)seek shareholders’ approval for the
proposed acquisition of SPH. To facilitate
shareholders’ communication with the
Board(cid:632)of Directors, shareholders were
invited(cid:632)to submit their questions for the
Board prior to our virtual AGM and EGM
during the year. The responses to key
questions received from shareholders
before the general meetings were released
on SGXNet and made available on our
website prior to the events. In addition,
the(cid:632)CEO of Keppel Corporation gave
presentations at the AGM and EGM,
providing further elaboration to shareholders.
SHAREHOLDING BY INVESTORS (%)
Institutions
Retail
Total
49.8
50.2
100.0
SHAREHOLDING BY GEOGRAPHY (%)
Singapore
Asia (ex Singapore)
North America
Europe
Others*
Total
31.9
4.3
10.7
7.9
45.2
100.0
* Others comprise the rest of the world, as well as
unidentified holdings and holdings below the
analysis threshold as at 10 February 2022.
Keppel Corporation Limited
To enhance shareholder engagement,
we(cid:632)also implemented live Q&As for our
virtual EGM in December 2021, where
participating shareholders could ask
questions live by submitting them
through(cid:632)the audio-and-visual webcast
platform and have these addressed by
the(cid:632)Board at the EGM. The presentation
materials, results and minutes of these
virtual shareholder meetings were also
released on SGXNet and made available
on(cid:632)our website.
As part of our ongoing efforts to engage
retail shareholders, we held our annual
briefing on Keppel’s performance,
as(cid:632)well(cid:632)as(cid:632)a dialogue session with retail
shareholders on the proposed acquisition
of(cid:632)SPH. The two events, both of which
were(cid:632)hosted by Securities Investors
Association (Singapore) (SIAS), drew a
total(cid:632)of close to 200 participants.
In 2021, our contribution towards the SIAS
Investor Education Programme benefitted
around 2,600 retail shareholders, who as
complimentary members of the Association,
enjoy access to a wide range of webinars,
workshops, useful information for investors
and other forms of support.
To broaden our outreach to retail investors,
including high-net-worth individuals,
we(cid:632)also(cid:632)held a briefing for the Bank of
Singapore’s global relationship managers
on(cid:632)Keppel’s Vision 2030 during the year.
About 90 relationship managers from
Singapore and overseas attended the
briefing session.
As an affirmation of our continuous efforts
to improve corporate governance, which
includes active shareholder communication,
as well as sustainability practices, Keppel
Corporation was conferred Winner of the
Singapore Corporate Governance Award
(Big Cap) at the SIAS Investors’ Choice
Awards 2021.
INVESTOR RELATIONS RESOURCES
To ensure fair and timely dissemination
of(cid:632)information, we post all announcements
on our corporate website promptly after
they(cid:632)are released on SGXNet.
In 2021, we held live webcasts of our
half-yearly results briefings, as well as
media(cid:632)and analyst teleconferences for our
1Q and 3Q business updates. An archive of
the webcasts and management speeches,
together with the presentation materials,
are(cid:632)made available at our website on the
same day the results and business updates
are released on SGXNet. Transcripts of
the(cid:632)Q&A sessions at these briefings are
also(cid:632)released on SGXNet and posted on
our(cid:632)website before the start of the next
trading day.
45
Mr Danny Teoh (centre), Chairman of Keppel Corporation received the Singapore Corporate
Governance Award 2021 (Big Cap) from Guest-of-Honour Dr Tony Tan Keng Yam (right), former
President of Singapore and Chief Patron of SIAS, and Mr David Gerald, President & CEO of SIAS (left)
at the SIAS Investors’ Choice Awards 2021.
Our mobile-friendly corporate website
www.kepcorp.com provides access to
company announcements, half-yearly
results and voluntary business updates,
annual reports, investor events, stock
and(cid:632)dividend information and investor
presentation slides. Contact information
of(cid:632)our Investor Relations (IR) personnel
(email: investor.relations@kepcorp.com)
can(cid:632)also be found on the website.
All IR activities are guided by the principles
and guidelines set out in the Company’s
IR(cid:632)policy, which is regularly reviewed and
made available at our website. The policy
articulates guiding principles that ensure the
timely, transparent and accurate disclosures
of material information.
During the year, we introduced new
interactive charting functions for the
Company’s financial and share information
on Keppel Corporation’s website to further
enhance the website’s functionality and
user-friendliness.
SHAREHOLDER INFORMATION
As at 10 February 2022, institutions
formed(cid:632)49.8% of our shareholder base,
while(cid:632)retail investors accounted for
the(cid:632)remaining 50.2%. Shareholders in
Singapore(cid:632)held approximately 31.9% of
our(cid:632)issued capital, while those in the rest
of(cid:632)Asia held 4.3%, North America 10.7%
and(cid:632)Europe 7.9%.
Keppel’s senior management regularly engaged the investment community throughout the year,
over live webcasts as well as at virtual conferences and in-person meetings.
INVESTOR RELATIONS CALENDAR
The following key events were held in 2021 to engage investors and analysts:
Q1
Q2
Q3
Q4
4Q & FY20 results
conference and live webcast
Virtual meetings with
investors from Singapore,
Hong Kong, Malaysia,
Switzerland and the UK
1Q 2021 business update
teleconference for media
and analysts
Virtual meetings with investors
from Singapore, Australia,
Hong Kong, Malaysia, the UK
and the US
Live webcast of 53rd AGM,
held by electronic means
2Q & 1H 2021 results
conference and live webcast
Media and analyst briefing
on the proposed acquisition
of SPH
3Q & 9M 2021 business
update teleconference for
media and analysts
Briefing to media & analysts
on final offer for SPH
Virtual meetings with investors
from Singapore, Australia,
Hong Kong, Japan, Malaysia,
Thailand, the UK and the US
Virtual meetings with
investors from Singapore,
Hong Kong, Malaysia
and Thailand
Participated in the Credit
Suisse-SGX ESG Real Estate
Conference 2021
Annual briefing for retail
shareholders, hosted
by SIAS
Media and analyst
briefing on the proposed
combination of Keppel
O&M and Sembcorp Marine,
including the resolution of
Keppel O&M’s legacy rigs
Briefing for Bank of
Singapore’s global
relationship managers
Virtual dialogue with Keppel’s
retail shareholders on the
proposed acquisition of SPH,
hosted by SIAS
Live webcast of EGM on the
proposed acquisition of SPH,
held by electronic means
Annual Report 2021
PERFORMANCE REVIEW
46
OPERATING &
MARKET REVIEW
Since Vision 2030 was announced, Keppel has
made considerable progress and accelerated
the execution of the Vision, with a view to achieving
its targets by 2025.
ENERGY &
ENVIRONMENT
URBAN
DEVELOPMENT
CONNECTIVITY
We provide energy and
environmental solutions
that are essential for
sustainable development.
We provide innovative
and multi-faceted
urban(cid:632)space solutions,
including quality homes,
offices, malls as well as
large-scale integrated
developments that enrich
people and communities.
We connect people
and businesses in the
digital economy.
ASSET
MANAGEMENT
We create enduring
value with quality
investment products
and provide a platform
for recycling capital and
tapping third-party funds
for growth.
Refer to pages 48 to 53
Refer to pages 54 to 57
Refer to pages 58 to 61
Refer to pages 62 to 65
Keppel Corporation Limited
47
ACCELERATING VISION 2030
In May 2020, Keppel unveiled Vision 2030,
the Group’s long-term roadmap to guide
its(cid:632)transformation and growth as one
integrated company, providing solutions for
sustainable urbanisation, with sustainability
at the core of the Company’s strategy.
Vision 2030 defines Keppel’s purpose,
focuses its business and ultimately aims to
accelerate growth and create value for its
stakeholders. It positions Keppel to seize
opportunities against the backdrop of key
macrotrends that are shaping the world,
including rapid urbanisation, climate change,
energy transition, growing digitalisation and
ageing populations. Keppel aims to be a
powerhouse of sustainable urbanisation
solutions, leveraging the Company’s track
record and capabilities in Energy &
Environment, Urban Development and
Connectivity, with an Asset Management
arm to fund the Group’s growth, provide a
platform for capital recycling, and pull the
Group together to seize opportunities with
an asset-light business model.
Since the Vision was announced,
the(cid:632)Company has made considerable
progress(cid:632)and accelerated the execution
of(cid:632)Vision 2030, with a view to achieving
its(cid:632)targets by 2025.
With growing international concerns about
climate change, many governments and
companies have made net zero commitments,
in turn creating strong demand for renewables,
clean energy, decarbonisation solutions,
waste and water treatment, as well as green
buildings and data centres – all of which
are(cid:632)solutions that Keppel provides. Keppel is
thus in pole position to be a preferred partner
for governments, customers and investors on
the journey to net zero.
PRIMING FOR GROWTH
Under Vision 2030, Keppel will also sharpen its
focus, simplify its business, double down on the
key areas identified, and pivot away from lumpy
earnings towards more recurring income.
In June 2021, it announced the proposed
combination of Keppel Offshore & Marine
(Keppel O&M) and Sembcorp Marine,
as(cid:632)well(cid:632)as the resolution of its legacy rigs.
Even earlier, in January 2021, Keppel had
announced the organic transformation of
Keppel O&M and that the Company would
exit the oil rig building business, after
completing the existing uncompleted rigs.
Keppel has also announced the proposed
divestment of its logistics business in
Southeast Asia and Australia. It has also
been progressively divesting its logistics
assets in China in the past two years.
Focused on making sustainability its
business, Keppel is deepening its presence
In view of the risks and opportunities engendered by climate change, we are exploring the development
of climate-resilient nearshore developments, or “floating cities”.
in areas spanning renewables, electrification,
carbon-free energy alternatives and
decarbonisation solutions, to expand
and(cid:632)fortify its capabilities in low-carbon,
circular(cid:632)economy solutions. Many of
Keppel(cid:632)Infrastructure’s new business pursuits
and research and development (R&D)
efforts(cid:632)in the past year were in these areas.
To scale up quickly to capture opportunities
arising from global energy transition,
Keppel(cid:632)will also seek opportunities to acquire
assets and stakes in established operating
platforms. In the longer run, Keppel is also
looking at developing solutions for carbon
capture, utilisation and(cid:632)storage (CCUS),
as(cid:632)well as new energy vectors, such(cid:632)as
green ammonia and hydrogen.
Keppel Land is transforming from a
traditional real estate developer into an
asset-light provider of innovative and
sustainable urban space solutions. In 2021,
Keppel Land achieved substantial progress
monetising its landbank, and is also
embracing new business models such as
Real Estate as a Service, and expanding its
focus on sustainable urban renewal and
senior living solutions that can yield
potential streams of recurring income.
Mindful of the risks and opportunities
engendered by climate change, Keppel Land
is also exploring the development of
climate-resilient nearshore developments,
or(cid:632)“floating cities”, which could help to
mitigate the impact of rising sea levels.
Keppel Telecommunications & Transportation
is expanding its data centre portfolio and
exploring ways to reduce the carbon
footprint of data centres, with plans to
start(cid:632)the development of its innovative,
energy-efficient floating data centre in
Singapore in 2022, subject to regulatory
approval. Keppel has also collaborated with
partners to launch the Bifrost Cable System,
which when completed in 2024, is set
to(cid:632)meet the growing digital connectivity
needs(cid:632)between Southeast Asia and the
west(cid:632)coast of North America.
Meanwhile, M1 continues to advance
on(cid:632)its(cid:632)multi-year digital transformation
from(cid:632)a traditional telco into a cloud native
connectivity platform. Key milestones
in(cid:632)2021 include the monetisation of its
network assets, growing its enterprise
business, rolling out its 5G Standalone
network and expanding 5G use cases.
Keppel Capital continues to grow its assets
under management, expanding its asset
classes and growing recurring fee income.
Amidst heightened concerns about inflation,
there is strong demand from investors for the
real assets that the Group manages, which
can serve as effective inflation hedges.
Increasingly, the Group is integrating its
capabilities across its focus segments to
work even more closely together to create
smarter and more sustainable solutions,
while leveraging third-party funds for growth.
Such OneKeppel integration would allow the
Group to address emerging opportunities
that may not be available to individual
business units, thus ensuring that the
whole is greater than the sum of its parts.
RIGHT SPACE, RIGHT TIME
With the world focusing increasingly on
sustainable development and climate
change, Keppel is in the right space and
at(cid:632)the right time to provide solutions
which(cid:632)are good for the planet, people
and(cid:632)the Company. Guided by its focus on
sustainability, leveraging an asset-light
model, and harnessing technology and
the(cid:632)Group’s track record, Keppel will
contribute to advancing sustainability,
while(cid:632)accelerating growth.
Annual Report 2021
48
PERFORMANCE REVIEW
OPERATING &
MARKET REVIEW
ENERGY &
ENVIRONMENT
WE PROVIDE ENERGY AND ENVIRONMENTAL
SOLUTIONS THAT ARE ESSENTIAL FOR
SUSTAINABLE DEVELOPMENT.
EARNINGS HIGHLIGHTS ($ million)
Revenue
EBITDA
Operating Profit/(Loss)
Loss before Tax
Net Loss
2021
5,574
(376)
(522)
(469)
(414)
2020
3,943
(671)
(822)
(1,251)
(1,181)
2019
4,969
268
116
(121)
(101)
PROGRESS IN 2021
FOCUS FOR 2022/2023
• Signed MOUs for proposed combination of
Keppel O&M and Sembcorp Marine, and
resolution of legacy rigs, while concurrently
driving organic transformation.
• Keppel O&M secured new order wins of
$3.5 billion and delivered nine major projects.
• Keppel Infrastructure pursued opportunities in
renewables, clean energy and decarbonisation
solutions, including exploring renewable power
import into Singapore, developing EV charging
infrastructure, and studying feasibility of a
green(cid:632)ammonia supply chain in APAC.
• Secured contract to provide Singapore’s first
sustainable Energy-as-a-Service solution.
• Announced acquisition of majority joint venture
stake in leading solar energy platform, Cleantech
Renewable Assets, with KAIF and its co-investor.
Keppel Corporation Limited
• Work towards completing proposed
combination of Keppel O&M and Sembcorp
Marine and resolution of legacy rigs.
• Accelerate expansion in the renewables
space and integrate renewables into existing
generation portfolio.
• Expand environment business with a focus
on value-enhancing projects with multiple
income streams.
• Expand presence and grow capabilities in
clean energy and decarbonisation solutions.
• Pursue and develop innovative solutions
in collaboration with other Keppel business
segments and drive value chain integration.
49
The Energy & Environment segment
provides solutions and services spanning
offshore & marine (O&M), power and
renewables, new energy and environment.
The segment includes Keppel Offshore &
Marine (Keppel O&M), Keppel Infrastructure
and Keppel Renewable Energy.
Countries representing about 70% of
the world economy have committed to
net zero emissions by 2050 following
COP 26. The energy sector, which
contributes about 76% of the world’s
greenhouse gas emissions, needs urgent
decarbonisation on a global scale. The
development and funding of energy
transition projects and infrastructure are
key in the race towards net zero.
Keppel, with expertise in sustainable energy
and environmental solutions, as well as asset
management capabilities, is well-placed
to provide compelling end-to-end solutions
that can fast forward the energy transition
and sustainable development.
In 2021, Keppel focused on transforming
its business and growing new capabilities
in the energy and environment space to
strengthen its position as an enabler of the
low-carbon economy.
BUSINESS TRANSFORMATION
At the start of 2021, Keppel announced
a comprehensive transformation of
Keppel O&M to enhance its competitiveness
and relevance amidst the global energy
transition, as well as its exit from the oil rig
building business, after completing the
Keppel, with expertise in sustainable energy and
environment solutions, as well as asset management
capabilities, is well-placed to provide compelling
end-to-end solutions that can fast forward the
energy transition and sustainable development.
existing rigs under construction. This
was followed in June by the signing
of(cid:632)Memorandums of Understanding
(MOUs)(cid:632)for the proposed combination
of(cid:632)Keppel(cid:632)O&M and Sembcorp Marine,
including the resolution of Keppel O&M’s
legacy rigs, as part of Keppel’s efforts
to be more disciplined and refocus
its portfolio.
The proposed combination of Keppel O&M
and Sembcorp Marine seeks to create a
stronger combined entity that would be
better positioned to capitalise on growing
opportunities in the O&M, renewables
and clean energy sectors. The proposed
combination runs in parallel and is
inter-conditional with another proposed
transaction to sell Keppel O&M’s legacy
completed and uncompleted rigs and
associated receivables to a separate
Asset Co, which would be majority owned
by external investors to be procured
by Kyanite Investment Holdings, a
wholly-owned subsidiary of Temasek.
Discussions on the proposed transactions
are progressing steadily and Keppel is
working towards signing definitive
agreements by the end of 1Q 2022.
If the proposed transactions are
successfully completed, Keppel will
become much more streamlined,
asset light and focused on renewables,
new energy, decarbonisation and
environmental solutions.
OFFSHORE & MARINE
While the O&M sector remained challenging
in 2021, Keppel O&M performed resiliently.
During the year, Keppel O&M secured
$3.5 billion of new orders, including a
US$2.3 billion contract for a Floating
Production, Storage and Offloading vessel
(FPSO) from Petrobras. As at end-2021,
Keppel O&M’s net orderbook stood at
$5.1 billion, of which 39% comprised
renewables and gas solutions. The quality
of Keppel O&M’s net orderbook improved,
with over 90% of the contracts providing
for milestone payments, thereby reducing
working capital requirements and risks
to the Group.
In 2021, Keppel O&M remained focused on
execution and delivered nine major projects
to its customers. In addition, Keppel O&M
also repaired and retrofitted about 120 vessels,
which included higher value jobs such as
Through its proprietary platform
AssetCare, Keppel O&M is leveraging
technology and data to remotely
monitor deployed assets to provide
real-time support and improve
work(cid:632)efficiency.
Annual Report 2021
PERFORMANCE REVIEW
50
OPERATING & MARKET REVIEW
ENERGY & ENVIRONMENT
scrubber and Ballast Water Treatment
System retrofits, and drydocking works
for(cid:632)LNG carriers.
As part of its active cost management
efforts, Keppel O&M achieved a reduction of
about $140 million in overheads year-on-year
(yoy) for FY 2021, higher than the projected
$90 million announced in 2020. Since 2015,
Keppel O&M has managed to shave
cumulatively $517 million from its overhead
costs, positioning the company to achieve
profitability with a lower top line.
With rising oil prices, the offshore drilling
rig market has shown signs of improvement.
Utilisation and day rates for modern jackups,
which make up the bulk of Keppel O&M’s
legacy rigs, both improved during the year.
Pareto Securities estimates these to rise
even further over the next few years.
With improving market conditions, Keppel
is hopeful that Keppel O&M’s legacy rigs,
which would be injected into a separate
Asset Co to be majority owned by external
investors procured by Kyanite Investment
Holdings, can be substantially monetised
over the next three to five years.
Meanwhile, Keppel O&M continues to
strengthen its position in the offshore
renewables sector. In 2021, the company
successfully completed its first two
offshore wind substations for customer
Ørsted, which will be deployed in the
Greater Changhua 1 & 2a offshore wind
farms in Taiwan. Keppel O&M is currently
undertaking integrating and commissioning
works for the two offshore substations
on-site, and the projects are expected to
be delivered in 2022. Reflecting the strong
partnership, Keppel O&M signed a global
framework agreement with Ørsted in 2021
to potentially undertake future offshore
substation projects. In addition, Keppel O&M
secured contracts for two offshore wind
topsides and a wind turbine installation
vessel upgrading project during the year.
In 2021, Keppel O&M was awarded the
Singapore Maritime Institute-Maritime
and Port Authority of Singapore Joint Call
for Proposal in harbour craft electrification
and is leading a coalition to develop a
comprehensive electric vessel supply chain
in Singapore. Keppel O&M is developing the
Floating Living Lab (FLL), a first-of-its-kind
floating launchpad for the development and
test bedding of sustainable marine solutions
in Singapore, which will be used to testbed
the electric vessel charging infrastructure.
In addition, the FLL will facilitate the use of
renewable energy such as solar energy in
the charging infrastructure.
As part of its transformation, Keppel O&M
is harnessing technology including 5G,
remote monitoring and surveillance, IoT and
data analytics, to enhance its solutions.
Keppel O&M’s proprietary industry IoT
system, AssetCare, which enables remote
monitoring and real-time support for
vessel operations, has been deployed on
several assets, including FueLNG Bellina,
Singapore’s first LNG bunkering vessel,
which was delivered by Keppel O&M
in 2021. FueLNG Bellina is also the world’s
first bunkering vessel to be awarded a
smart notation.
SHARPENING FOCUS ON
THE ENERGY TRANSITION
The net zero commitments made by
governments and companies around
the(cid:632)world are driving strong demand for
renewables, clean energy, as well as
decarbonisation and environmental
solutions. These are areas where the Group,
especially Keppel Infrastructure, has
strong capabilities and a proven track
record, and where it can help its customers
make the transition to net zero.
Many of Keppel’s new business pursuits
and R&D efforts in the past year were
in(cid:632)these areas, including exploring the
import(cid:632)of renewable energy into Singapore,
developing electric vehicle (EV) charging
infrastructure, securing Singapore’s first
Energy-as-a-Service (EaaS) contract, and
studying the feasibility of developing an
Asia-Pacific green ammonia supply chain.
Keppel is partnering Perennial to roll out Singapore’s first sustainability Energy-as-a-Service Concept at Perennial Business City, and is looking to provide more Energy-as-a-Service
offerings in Singapore and the region.
Keppel Corporation Limited
Keppel is also actively exploring decarbonisation and circular economy solutions,
including carbon capture, utilisation and storage, smart distributed energy
resources, as well as various environmental sustainability technologies.
51
Keppel is also providing other decarbonisation
solutions for the energy and environmental
sectors to help its customers and governments
drive down their carbon emissions.
In(cid:632)addition to its proven waste-to-energy (WTE)
and district cooling solutions, Keppel(cid:632)is
also(cid:632)actively exploring decarbonisation
and(cid:632)circular economy solutions, including
CCUS, smart distributed energy resources,
as(cid:632)well(cid:632)as various environmental
sustainability technologies.
Looking ahead, Keppel will continue
to(cid:632)seize(cid:632)inorganic opportunities to
acquire(cid:632)assets, operating platforms and
technologies that would allow the Group
to(cid:632)scale up quickly in its identified growth
areas. Importantly, with its established
asset(cid:632)management platform, Keppel can
also bring in varied sources of capital
from(cid:632)private and public investors to fund
the(cid:632)projects and solutions from cradle
to maturity.
POWER AND RENEWABLES
Keppel’s Power and Renewables
business(cid:632)performed well in 2021 despite
the(cid:632)challenges caused by the rise in global
gas prices and supply disruptions, and
volatility in the Singapore Wholesale
Electricity Market.
During the year, Keppel Electric successfully
maintained its position as one of the
leading(cid:632)electricity retailers in Singapore.
As(cid:632)at November 2021, Keppel Electric was
the 3rd largest commercial and industrial
retailer with a market share of 17.9%1.
Keppel Electric also retained its position
as(cid:632)the largest Open Electricity Market
provider in Singapore, with a market share
of(cid:632)22.1% as at end-April 2021. Keppel
Electric remains committed to providing
its(cid:632)consumers with customisable retail
solutions that best suit their needs.
With economic activity recovering
despite the ongoing pandemic,
electricity(cid:632)consumption in Singapore
has(cid:632)rebounded to pre-COVID-19 levels
more(cid:632)quickly than anticipated. Demand
for(cid:632)electricity in Singapore is beginning
to(cid:632)outpace supply. Coupled with a lack
of(cid:632)new generation capacity planting in
the(cid:632)immediate horizon,(cid:632)the tight market
conditions are(cid:632)likely(cid:632)to persist in the
near(cid:632)to(cid:632)medium(cid:632)term.
1 Excluding SP Services.
With the recently announced hike in
Singapore’s carbon tax, which will progressively
increase from the existing $5 per tonne
of emissions to reach $50-$80 per tonne
of(cid:632)emissions by 2030, consumers will be
financially incentivised to decarbonise their
electricity consumption. This is expected to
drive up demand for green electricity and
decarbonisation solutions.
To diversify its generation portfolio and to
cater to the emerging domestic demand for
renewable energy, Keppel Infrastructure has
increased its participation in renewables.
In line with efforts to promote greater
energy(cid:632)infrastructure connectivity in the
region, Keppel Infrastructure signed
an exclusive framework agreement with
Electricite Du Laos (EDL) as part of the
Lao PDR-Thailand-Malaysia-Singapore
Power Integration Project, to jointly explore
opportunities to import up to 100MW of
renewable hydropower into Singapore.
Keppel Infrastructure and(cid:632)EDL will also
explore collaboration opportunities arising
from the demand for renewable energy
and(cid:632)the transition towards greener forms
of(cid:632)energy. Such projects will(cid:632)not only
create(cid:632)new growth engines and advance
sustainability for the Group but will also
enable Keppel to enhance its green
retail offerings.
Keppel Infrastructure is strengthening
its renewable energy capabilities by
collaborating with like-minded partners
in the areas of low-carbon electricity,
storage and intermittency management
solutions. It seeks to deliver reliable,
competitive and non-intermittent
low-carbon electricity to end-consumers,
potentially in the ASEAN region. Apart
from hydropower, Keppel is exploring other
forms of renewable energy such as wind,
solar and biomass, and will leverage
technology and data to enhance its
operational performance.
Keppel Infrastructure develops, owns
and operates a network of integrated
utilities and sustainable energy solutions.
During the year, it secured a long-term
service corridor contract from a large
petrochemical customer at Jurong Island
and also successfully completed the design
and construction of several facilities on
the island without any lost time incident.
Annual Report 2021
PERFORMANCE REVIEW
52
OPERATING & MARKET REVIEW
ENERGY & ENVIRONMENT
We will continue to invest in R&D, and explore
new opportunities in renewables, clean energy,
decarbonisation and environmental solutions.
To further advance the Group’s pursuit
of(cid:632)sustainability as a business, Keppel
Infrastructure is collaborating with
Singapore LNG Corporation (SLNG) and
another industry partner on the front-end
engineering design of a natural gas liquids
extraction facility project. To be located
on(cid:632)Jurong Island, the project aims to
remove(cid:632)heavier hydrocarbons from
LNG(cid:632)through a sustainable approach
that(cid:632)incorporates the use of cold energy
from SLNG’s operations. The project
will not only unlock multiple benefits
across the LNG and Chemicals value
chains(cid:632)but also contribute towards
enhancing Singapore’s energy security
and(cid:632)strengthening the country’s position as
an LNG and Chemicals hub.
GROWING RENEWABLES PORTFOLIO
Keppel has set a target to grow its renewables
portfolio to 7.0GW by 2030 and will do this
both organically and inorganically. This will
not only contribute to growing the Group’s
renewable energy portfolio but will also
generate recurring income for the Group.
In 2021, Keppel Corporation announced the
acquisition of a majority joint venture stake
in Cleantech Renewable Assets (Cleantech),
a leading solar energy platform, in partnership
with Keppel Asia Infrastructure Fund (KAIF)
and a co-investor of KAIF. Cleantech has a
total capacity of over 600MW across the
various stages of operations, construction,
and development, with its assets located
across India and six countries in Southeast
Asia. In addition, Cleantech is targeting to
achieve a cumulative generation capacity
of(cid:632)3.0GW over the next five years.
This latest transaction brings the Group’s
total announced capacity for renewables
to(cid:632)1.1GW, including Keppel Renewable
Energy’s ongoing solar farm project in
Queensland, Australia, which continues to
make steady progress. Construction of the
solar farm is on track to commence in 2023.
Upon completion in 2024, the Harlin solar
farm project is expected to have a capacity
of at least 500MW, generating enough
energy to power over 142,000 average
Australian homes.
in Asia Pacific, with a focus on the markets
of Australia, India, the Philippines, the
Republic of Korea, Malaysia and Vietnam.
NEW ENERGY
Keppel Infrastructure continued to expand
its district cooling services with three
new service contracts, further contributing
to energy-efficient cooling in Singapore.
The addition of the latest contracts brings
the total cooling supplied by Keppel’s plants
in Singapore to over 70,000 refrigeration
tonnes. Meanwhile, construction of Bulim
Phase 1 of the Jurong Innovation District in
Singapore and the district cooling systems
(DCS) plant in Bangkok continued to progress.
Both projects are on track to be completed
in 2023. Keppel Infrastructure also deepened
its partnership with BCPG Public Company
Limited via an MOU to jointly develop more
energy efficiency-related solutions such as
cooling, EV charging, microgrids, and solar
installations in key gateway cities in Thailand.
With climate change being one of the
greatest threats today, Keppel is investing
in(cid:632)new technologies and energy-efficient
solutions. Keppel Infrastructure and the
National University of Singapore jointly
designed and developed a Thermal Energy
Storage (TES) solution that uses a new
Phase-Change Material to improve the
energy efficiency of DCS. The TES system
has an energy carrying capacity of up
to(cid:632)three times more than a conventional
chilled water storage system, and can yield
more than 10% in cost savings annually.
The(cid:632)TES trial was completed in 2021 and
will be rolled out for commercial application
in 2022.
As part of its plans to grow in the EV sector,
Keppel Infrastructure entered into a joint
venture with Starcharge to deploy EV charging
infrastructure in Singapore and the region.
It(cid:632)also launched Volt, its EV charging brand
and solutions provider.
Keppel Infrastructure is also partnering
Perennial to roll out Singapore’s first
sustainable EaaS concept at Perennial
Business City. The concept includes
installing and operating highly efficient
chiller systems and photovoltaic solar
panels, providing long-term zero-carbon
electricity, as well as developing smart EV
charging stations. The project is expected to
reduce Perennial Business City’s total energy
consumption by more than 40%, making
it(cid:632)the first sustainable super-low energy
business park in the Jurong Lake District.
Keppel Renewable Energy is also pursuing
opportunities in the solar, onshore wind,
offshore wind and run-of-river hydro space
To meet the rapidly growing global demand
for carbon-free energy, Keppel Infrastructure
signed an MOU with Temasek and
Keppel Corporation Limited
53
The Hong Kong IWMF was 40.6%
completed as at end-2021.
Annual Report 2021
Incitec(cid:632)Pivot to study the feasibility of
producing green ammonia in Australia for
export. Green ammonia is a potential source
of(cid:632)clean fuel that can support the demand
for sustainable energy and contribute
to(cid:632)deep(cid:632)decarbonisation in power and
hard-to-abate sectors.
Looking ahead, Keppel Infrastructure
will(cid:632)continue to invest in R&D, and explore
new opportunities in renewables, clean
energy, decarbonisation and environmental
solutions, as it expands its track record for
zero-emission solutions and low-carbon
energy services.
ENVIRONMENT
Governments around the world recognise
the need for more sustainable water
and(cid:632)waste management solutions to
cope(cid:632)with(cid:632)rapid urbanisation, with many
countries(cid:632)announcing planned infrastructure
investments over the next few years.
In(cid:632)2021, Keppel Infrastructure continued
to(cid:632)focus on the execution of its projects in
Singapore and overseas with an emphasis
on safety and quality.
In February 2021, Singapore’s fourth
desalination plant, the Keppel Marina East
Desalination Plant, was officially opened
by(cid:632)Prime Minister Lee Hsien Loong,
strengthening Keppel’s presence as
a(cid:632)provider of water solutions.
Meanwhile engineering design and
procurement activities continued at
Singapore’s first Integrated Waste
Management Facility (IWMF), in anticipation
of the commencement of major site
works(cid:632)in 2022. Upon completion in 2024,
the(cid:632)IWMF WTE facility and the Materials
Recovery Facility will be amongst the(cid:632)largest
of such facilities in Singapore. Over in Hong
Kong, the prefabrication of(cid:632)process modules
and reclamation works(cid:632)progressed steadily
at the Hong(cid:632)Kong(cid:632)IWMF despite the supply
chain(cid:632)disruptions arising(cid:632)from COVID-19.
As(cid:632)at end-2021, the(cid:632)Singapore and
Hong(cid:632)Kong IWMF projects were 22.7%
and(cid:632)40.6% completed respectively.
In mainland China, Keppel Infrastructure
successfully commissioned two WTE plants
in Beijing and Xi’an. As one of the leading
and most reliable WTE technology solutions
provider in China, Keppel is well positioned
to seize opportunities in China, as part of
the(cid:632)Chinese government’s plans to grow the
country’s urban municipal waste incineration
capacity to 800,000 tonnes per day by(cid:632)the
end of 2025.
Building on its track record and expertise,
Keppel is well-placed to capitalise on
the(cid:632)increasing demand for sustainable
water(cid:632)and waste management solutions,
especially in the Asia-Pacific and
Middle(cid:632)East regions. The Group is also
exploring investments in decarbonisation
and circular economy solutions,
including(cid:632)CCUS, smart distributed energy
resources, and various environmental
sustainability technologies.
54
PERFORMANCE REVIEW
OPERATING &
MARKET REVIEW
URBAN
DEVELOPMENT
WE PROVIDE INNOVATIVE AND MULTI-FACETED URBAN
SPACE SOLUTIONS, INCLUDING QUALITY HOMES,
OFFICES, MALLS AS WELL AS LARGE-SCALE INTEGRATED
DEVELOPMENTS THAT ENRICH PEOPLE AND COMMUNITIES.
EARNINGS HIGHLIGHTS ($ million)
Revenue
EBITDA
Operating Profit
Profit before Tax
Net Profit
2021
1,629
1,036
993
1,072
763
2020
1,275
645
605
720
438
2019
1,336
545
507
676
483
PROGRESS IN 2021
FOCUS FOR 2022/2023
• Made strong progress in asset monetisation,
completing the divestment of eight projects with
total proceeds of about $1.9 billion.
Sold 4,870 homes in Asia, mainly in Singapore,
China and Vietnam, up 46% from 2020.
Grew recurring income with opening/reopening
of retail malls in China and Singapore and
launched the Seasons Smart Vibrant Precinct in
Tianjin, China.
Expanded into China’s urban renewal market in
partnership with Topchain.
SSTEC sold a mixed-use land plot located in the
Eco-City’s mature Southern District.
•
•
•
•
• Accelerate asset monetisation and unlocking of
capital that can be reinvested for growth and
higher returns across the Group.
• Continue to drive business transformation and
build new businesses in sustainable urban
renewal and senior living.
• Invest strategically and selectively in new
projects across Asia Pacific.
• Continue to seek new opportunities in master
development and integrated large-scale
developments in Asia.
• Continue to develop the Sino-Singapore
Tianjin(cid:632)Eco-City in China as a model for
sustainable urbanisation.
• Pursue and develop innovative solutions in
collaboration with other Keppel business
segments and drive value chain integration.
Keppel Corporation Limited
As part of its transformation and focus on growing recurring income,
Keppel Land is expanding its presence in sustainable urban renewal and
senior living solutions, and will increasingly provide Real Estate as a Service.
55
The Urban Development segment provides
a(cid:632)spectrum of urban space as well(cid:632)as
end-to-end master development solutions.
It(cid:632)includes Keppel Land and Keppel Urban
Solutions, as well as the Group’s investment
in associated company, the Sino-Singapore
Tianjin Eco-City Investment and Development
Co., Ltd. (SSTEC), the master developer
of the Sino-Singapore Tianjin Eco-City
(Eco-City).
URBAN SPACE SOLUTIONS
DRIVING BUSINESS TRANSFORMATION
Across the world, COVID-19 has altered
the way people live, work, play and learn.
Social distancing has changed the way
people inhabit and interact with physical
space and with one another, spurring
greater demand for digital connectivity
and giving rise to new technologies and
business models. Heightened focus on
climate change and well-being are also
driving demand for sustainable urban
spaces. Meanwhile, ageing populations
coupled with rising affluence in both
developed and emerging markets present
opportunities for differentiated senior living
products and services.
As a Group, Keppel is transforming its business
as well as growing new competencies to
address these trends, which were identified
as part of its Vision 2030 roadmap. Increasingly,
we are integrating capabilities across our
focus segments to create smarter and
more(cid:632)sustainable solutions to address
the(cid:632)emerging opportunities.
Keppel Land continued to make good
progress in its transition to an asset-light
provider of innovative and sustainable
urban space solutions. In 2021, it completed
the monetisation of eight projects across
Singapore, China, Vietnam, Indonesia and the
UK, with total proceeds of about $1.9 billion
and net gains of over $450 million1. Keppel
Land also collaborated with Keppel Vietnam
Fund (KVF) and the latter’s co-investor to
acquire an interest in three residential
land(cid:632)plots in Hanoi, Vietnam. KVF and the
co-investment vehicle are both managed by
Keppel Capital, reflecting the increasing
collaboration between Keppel’s business units.
As part of its transformation and focus on
growing recurring income, Keppel Land
is(cid:632)expanding its presence in sustainable
urban(cid:632)renewal and senior living solutions,
and will increasingly also provide Real Estate
as a Service, such as providing customised
office fit-outs and incorporating sustainable
features to create zero energy buildings.
In(cid:632)2021, Keppel Land formed a joint
venture(cid:632)with the Topchain Group, to
jointly(cid:632)manage investment properties,
mainly(cid:632)offices and business parks,
with(cid:632)potential for asset enhancement
initiatives in China.
Keppel Land is presently also collaborating
with other Keppel business units to explore
the development of innovative nearshore
urban developments or “floating cities”,
that(cid:632)can help to address land scarcity
and(cid:632)the threat of rising sea levels in
coastal areas.
To boost its operational capabilities,
as(cid:632)well(cid:632)as provide more innovative
and(cid:632)bespoke solutions, Keppel Land is
leveraging(cid:632)digital technologies to capture
and analyse customer data insights from
the properties it manages. In May 2021,
Keppel Land launched its Seasons Smart
Vibrant Precinct in the Eco-City at the 5th
World Intelligence Congress. The precinct
leverages technologies such as 5G, Artificial
Internet of Things, big data and augmented
reality to enhance public amenities as well as
urban living experiences. Over in Singapore,
Keppel Land collaborated with M1 to
extend(cid:632)5G-enabled features and offerings
at(cid:632)Marina(cid:632)at Keppel Bay and the newly
re-opened i12 Katong retail mall.
Keppel Land will continue building on
its(cid:632)capabilities and credentials to seize
business opportunities, especially in
smart(cid:632)and sustainable developments.
Keppel Land has committed to reducing its
absolute Scope 1 and 2 greenhouse gas (GHG)
emissions by 100% by 2030 from the base
level in 2020. It has also committed to
reducing Scope 3 GHG emissions from
purchased goods and services by 20% per
square metre by 2030 from a 2020 base year.
During the year, Keppel Land received several
industry and sustainability-related accolades,
such as top rankings in GRESB 2021 and the
Euromoney Real Estate Survey 2021, and
was also conferred the prestigious BCA
Quality Excellence Award – Quality Champion
(Platinum) for the third consecutive year,
among others. These accolades attest to
Keppel Land’s commitment to create vibrant,
multi-faceted urban space solutions that
create long-term stakeholder value.
1 About $380 million of the net gains were recognised
in FY 2021, while the rest was recognised in FY 2020.
Located within the mature Start-Up Area of the Eco-City, the retail mall of Seasons City is a well-curated lifestyle haven,
and home to popular dining establishments, high fashion brands, total wellness and experiential entertainment.
Annual Report 2021
PERFORMANCE REVIEW
56
OPERATING & MARKET REVIEW
URBAN DEVELOPMENT
KEPPEL LAND’S TOTAL ASSET DISTRIBUTION
BY COUNTRY (%)
as at 31 December 2021
Despite COVID-19, all key markets saw improved
sales in 2021, reflecting continued demand for
well-located, good quality projects in high-growth cities.
In 2021, Keppel Land’s home sales improved
significantly, increasing 46% year-on-year
(yoy) to 4,870 homes sold. The total sales
value was up 60% to $4.0 billion in 2021,
from $2.5 billion in 2020. Despite COVID-19,
all key markets saw improved sales in 2021,
reflecting continued demand for well-located,
good quality projects in high-growth cities.
Although overall sentiments have turned
more cautious after the debt crisis affecting
developers in China, the Keppel Group
remains optimistic about opportunities
in(cid:632)China over the mid to long term. Sales
momentum remained resilient in cities where
Keppel Land is present given the healthy
supply-demand dynamics. During the year,
Keppel Land sold about 2,780 homes in
China, higher than the 2,110 homes sold
in(cid:632)2020, underpinned by strong sales at
Upview, Shanghai and Seasons Residences,
Wuxi. Keppel Land also launched the
highly-anticipated Seasons City retail mall
in(cid:632)the Eco-City, which will contribute to
recurring income.
To prevent the market from overheating,
the(cid:632)Singapore government introduced a slew
of cooling measures in December 2021.
While some impact is expected in the short
term as buyers adopt a wait-and-see
approach, the continuing recovery of the
economy from COVID-19 coupled with a
stable property market in Singapore will give
buyers more confidence to invest for the
longer term. During the year, Keppel Land
sold about 470 homes in Singapore, up from
370 homes sold in 2020. This was mainly
due to strong sales from The Reef at
King’s(cid:632)Dock. As at end-2021, Reflections
and(cid:632)Corals at Keppel Bay were 99% and
93%(cid:632)sold respectively, while plans for
Keppel(cid:632)Bay Plot 6, a residential site located
on Keppel Island, are currently being reviewed.
Meanwhile, demand for office space in
Singapore has moderated in response to the
pandemic as more organisations adopt hybrid
work models. However, there continues to
be bright spots as a result of increasing
demand from the technology, media and
financial services industries. Keppel Land is
in the process of redeveloping Keppel Towers
into a full commercial development, whose
construction commenced in 2021.
Despite the growth in online retailing and
e-commerce, good quality retail spaces
in select locations in Singapore remain
in demand. The progressive easing of
border restrictions and high vaccination
rates will also benefit Singapore’s retail
sector as market sentiments improve.
Following major asset enhancement works,
Keppel Land re-opened i12 Katong retail
mall in December 2021 with new sustainable
features and improved retail offerings.
In Vietnam, Keppel Land’s home sales doubled
yoy to about 1,090 units in 2021 despite the
challenges posed by COVID-19. This was
mainly due to strong demand for Celesta
Rise and Celesta Heights in Ho Chi Minh City
(HCMC), which were 96% and 92% sold
respectively as at end-2021. In particular,
Celesta Heights, which was launched in
December 2021, saw a strong take-up rate with
all released units sold-out within two weeks
of launch. Keppel Land continued to
expand(cid:632)its footprint in Vietnam, acquiring
a(cid:632)residential land plot in HCMC and three
residential land plots in Hanoi. The Group
continues to be positive about Vietnam’s
property market, which is underpinned by
healthy economic growth, increased foreign
investments, a high urbanisation rate and
a(cid:632)growing middle class.
In India, Keppel Land launched La Familia
in(cid:632)Urbania Township in Thane, Mumbai, in
December 2021. During the year, Keppel Land
sold about 200 residential units at Urbania
Township. Keppel Land is also growing
its(cid:632)commercial footprint in India, with the
announced acquisition of the remaining
49%(cid:632)stake in a Grade A office project in
Yeshwanthpur, Bangalore, from Puravankara.
The construction of the Grade A office will
be completed in 2026.
In Indonesia, Keppel Land sold about
240(cid:632)units in 2021, primarily from the
Wisteria landed housing project in East
Jakarta. In addition, Wisteria has handed
over its first phase to buyers in November
2021. Meanwhile, The Riviera at Puri was
98% sold and has commenced its final
phase of handover in October 2021.
MASTER DEVELOPMENT &
URBAN SOLUTIONS
Keppel Urban Solutions is an end-to-end
master developer of smart, sustainable
urban townships that leverage the Group’s
wide-ranging capabilities and strong track
record in the planning and development
of(cid:632)large-scale projects in Asia Pacific.
Over(cid:632)the course of 2021, Keppel Urban
Solutions continued to partner both
internal(cid:632)and external stakeholders to
pursue(cid:632)opportunities in the development
of(cid:632)sustainable urban projects.
Singapore
China
Vietnam
Indonesia
Others
Total
33.8
46.0
11.1
5.4
3.7
$14.1 billion
100.0
KEPPEL LAND’S TOTAL ASSET DISTRIBUTION
BY SEGMENT (%)
as at 31 December 2021
Property Trading
Property Investments
Others
Total
$14.1 billion
100.0
45.2
50.1
4.7
Keppel Corporation Limited
57
The Reef at King’s Dock, which was well received by homebuyers, incorporates myriad smart and sustainable features throughout the development’s units and public spaces.
In Vietnam, Keppel Urban Solutions,
together(cid:632)with Keppel Land, continued to
make progress in the development of
Saigon(cid:632)Sports City (SSC), successfully
completing the SSC Experiential Gallery and
Keppel Sustainable Cities Studio. In China,
Keppel Urban Solutions continues to work
with Keppel Land to transform the 166-ha
precinct in the Northern District of the
Sino-Singapore Tianjin Eco-City into a model
for smart and environmentally-responsible
urban living.
Keppel Urban Solutions will continue to
pursue growth opportunities in the planning
and development of large-scale, sustainable
integrated townships in Asia Pacific.
SINO-SINGAPORE TIANJIN ECO-CITY
Keppel leads the Singapore consortium,
which works with its Chinese partner
to(cid:632)guide the 50-50 joint venture, SSTEC,
in(cid:632)its(cid:632)role as master developer of the
Sino-Singapore Tianjin Eco-City.
Through the years, the Eco-City has flourished
into a highly liveable city with 120,000 people1
living and working there and 14,000 registered
companies1. The Eco-City is well-served
by(cid:632)bustling business and industrial parks,
neighbourhood centres, top(cid:632)schools and
a(cid:632)robust healthcare system. The recent
opening of two large commercial complexes
in late-2021, including Seasons City
retail(cid:632)mall by Keppel Land, has further
augmented the existing suite of leisure
and(cid:632)recreational amenities, adding to
the(cid:632)Eco-City’s vibrancy.
In 2021, home sales at the Eco-City
remained healthy with a total of
4,460(cid:632)homes(cid:632)sold, of which about
200(cid:632)homes were from(cid:632)projects developed
by(cid:632)SSTEC. SSTEC(cid:632)also sold a mixed-use
land plot(cid:632)located in the Eco-City’s mature
Southern District.
During the year, the Keppel Group
continued(cid:632)to contribute towards the
Eco-City’s development. Apart from the
sale(cid:632)of homes, Keppel Land also expanded
into the retail sector in the Eco-City with the
opening of the(cid:632)retail mall at Seasons City.
Reflecting Keppel Land’s commitment to
sustainability, Phase 1 of Seasons City,
comprising the retail mall and a 10-storey
office tower, was(cid:632)conferred the Building and
Construction Authority of Singapore’s (BCA)
Green Mark Platinum Award (Provisional),
the highest accolade under the BCA
Green(cid:632)Mark scheme.
At the 5th World Intelligence Congress
held in May 2021, Mr Desmond Lee,
Singapore’s Minister for National
Development, announced the launch of
the(cid:632)Seasons Smart Vibrant Precinct,
which(cid:632)Keppel Land China had developed in
collaboration with the Eco-City Administrative
Committee. The precinct comprises
Keppel(cid:632)Land’s Seasons series of residential
and commercial projects in the Eco-City
and(cid:632)features smart facilities such as an
integrated operations and management
control centre.
Having successfully piloted its smart city
management platform in the Eco-City,
Keppel Land is looking to scale up the
application of such technologies at a smart
and low-carbon precinct in the Eco-City’s
Northern District. Keppel Land and Keppel
Infrastructure are also exploring new
renewable energy projects in the Eco-City.
Looking ahead, SSTEC will focus on
developing the Eco-City’s city centre into
a(cid:632)lifestyle, cultural and commercial hub
with(cid:632)a distinctive blend of Singaporean and
Chinese elements. SSTEC will also continue
to work closely with its public and private
sector partners from both countries to
jointly(cid:632)explore growth opportunities in
the(cid:632)sustainability sector and build the
Eco-City into a leading example of a green,
low-carbon and smart city.
1
Includes the Central Fishing Port and Tourism District.
Annual Report 2021
58
PERFORMANCE REVIEW
OPERATING &
MARKET REVIEW
CONNECTIVITY
WE CONNECT PEOPLE AND BUSINESSES IN
THE DIGITAL ECONOMY.
EARNINGS HIGHLIGHTS ($ million)
Revenue
EBITDA
Operating Profit
Profit before Tax
Net Profit
2021
1,260
288
86
86
64
2020
1,220
259
46
29
13
2019
1,128
385
210
196
136
PROGRESS IN 2021
FOCUS FOR 2022/2023
• Keppel DC Fund II acquired a greenfield site
in Shanghai, China for the development
of a(cid:632)data(cid:632)centre, Fund II’s first project
since(cid:632)its(cid:632)establishment.
• Commenced manufacturing of the Bifrost
Cable System.
• Continue to expand Keppel’s portfolio of quality
data centre assets in Asia Pacific and Europe,
grow subsea cable system business, and
provide higher value services to customers.
• Work towards completing the divestment of
the(cid:632)logistics business.
• M1 launched 5G Standalone (SA) network for
• Work towards achieving nationwide 5G outdoor
consumers and rolled out commercial-ready 5G
SA solutions for enterprises.
• M1 was awarded the 2.1 GHz spectrum band by
IMDA, boosting its coverage and performance
for 5G in Singapore.
• Announced plans to divest logistics business
in(cid:632)Southeast Asia and Australia, including
UrbanFox.
coverage by end-2022.
• Continue to expand M1’s enterprise business,
and invest in 5G capabilities and digital services
& solutions.
• Pursue and develop innovative solutions in
collaboration with other Keppel business
segments and drive value chain integration.
Keppel Corporation Limited
59
The Connectivity segment includes Keppel
Telecommunications & Transportation
(Keppel T&T) and M1, whose business
activities span data centres and logistics,
as(cid:632)well as telecommunications. In 2021,
demand for Keppel’s connectivity solutions
continued to grow, backed by increasing
digitalisation and demand for data around
the world.
In addition to fueling consumer demand
for(cid:632)connectivity, the pandemic has also
accelerated the adoption of digital
technology. With our track record and
capabilities in data centres and connectivity,
Keppel is well positioned to contribute to
and ride this megatrend.
In 2021, following the strategic review of
the(cid:632)logistics business, Keppel announced
the proposed divestment of the logistics
business to a third party. Keppel T&T has
received bids and aims to sign definitive
agreements for the divestment of the
logistics business in Southeast Asia and
Australia, including UrbanFox, by the end
of 1Q 2022.
During the year, Keppel T&T continued to
streamline its business and completed the
sales of several non-core assets, namely
ARIP Thailand, Trisilco Radiance, Nanhai
Distribution Centre and Wuhu Sanshan Port.
DATA CENTRES
Data centres have quickly risen to become
critical infrastructure for everyday life, driven
by increasing digitalisation and demand for
data globally. This macrotrend has been
further accentuated amid the COVID-19
In line with Keppel’s Vision 2030 strategy and the
increasing demand for more sustainable data centres,
Keppel Data Centres is actively exploring ways to
reduce the carbon footprint of its assets, including
sourcing for alternative sources of power.
pandemic, the transition to remote working,
and increasing prevalence of e-commerce.
Furthermore, with 5G expected to usher in
the “Fourth Industrial Revolution”, data
centres will play a key role in enabling 5G in
all applications and devices. To create a
seamless wireless(cid:632)network connecting
devices and applications, centres of data
exchange will(cid:632)need to be located near the
end-users.
In 2021, Keppel Data Centres continued to
pursue expansion and seize opportunities in
its target markets of Asia Pacific and Europe.
In collaboration with Keppel Data Centre
Fund II, it added a new greenfield data
centre in China to its portfolio. Including this
acquisition, Keppel Data Centres currently
has six data centres under development
across Singapore, China, Malaysia,
Indonesia and Australia. As at end-2021,
the(cid:632)Group’s total portfolio comprised
28(cid:632)quality data centres across 18(cid:632)cities
in(cid:632)Asia Pacific and Europe, including
those(cid:632)under Keppel DC REIT.
under scrutiny for its carbon footprint.
In(cid:632)line(cid:632)with Keppel’s Vision 2030
strategy(cid:632)and the increasing demand
for(cid:632)more(cid:632)sustainable data centres,
Keppel(cid:632)Data(cid:632)Centres is actively exploring
ways to reduce(cid:632)the carbon footprint of its
assets, including sourcing for alternative
sources of(cid:632)power. In addition to traditional
sources of renewable energy such as wind,
hydro and solar power, Keppel is also
exploring the use of hydrogen to power
its(cid:632)data centres.
Keppel is also examining ways to improve
the energy efficiency of its new and existing
data centres. Keppel Data Centres is
working on developing energy-efficient
floating data centres, which can utilise
seawater for cooling, making it more cost
efficient and environmentally sustainable
when compared with traditional structures.
Subject to obtaining the necessary regulatory
approval, Keppel Data Centres plans to
commence the development of the floating
data centre in Singapore in 2022.
With climate change and environmental
sustainability high on the agenda of
governments and businesses globally, the
data centre industry continues to come
As part of the Group’s efforts to integrate
its(cid:632)business units and value chains in order
to realise greater synergies, the OneKeppel
Data Centre team was established during
Keppel plans to commence
development of the innovative,
energy-efficient floating data centre
in Singapore in 2022, subject to
regulatory approval.
Annual Report 2021
PERFORMANCE REVIEW
60
OPERATING & MARKET REVIEW
CONNECTIVITY
the year, bringing together investment
personnel and expertise from Keppel Data
Centres and Keppel Capital. The OneKeppel
Data Centre team adopts a cradle-to-maturity
approach in evaluating opportunities across
the development stages of a project, thus
allowing the Group to deepen collaboration
in its Vision 2030 focus areas and
undertake(cid:632)more complex deals, drawing
on(cid:632)the strengths of each business unit.
Keppel Data Centres will continue to
collaborate with Keppel DC REIT and the
private funds under Keppel Capital to
proactively seek new development and
acquisition opportunities in Asia Pacific
and(cid:632)Europe. It will also work with
various(cid:632)business units within the Keppel
ecosystem to innovate and develop more
energy-efficient and sustainable data
centres, which can help customers reduce
their carbon emissions. Through technology
and innovation, Keppel Data Centres aims
to(cid:632)reduce the power usage effectiveness
of(cid:632)its data centres, improve design
resiliency, while improving the latency
for(cid:632)bandwidth-intensive requirements.
SUBSEA CABLE SYSTEMS
The increasing penetration of the internet
together with the rising demand for wireless
connectivity, especially with the rollout of
5G, have further driven global internet traffic.
Over 97%1 of the global internet traffic is
dependent on submarine cables, and about
half of the global internet traffic is coming
out of Asia Pacific.
In March 2021, Keppel T&T entered into
a(cid:632)joint build agreement with Facebook and
PT Telekomunikasi Indonesia International
(Telin) to jointly own and develop the Bifrost
Cable System (Bifrost). Bifrost is the world’s
first subsea cable system that directly
connects Singapore to the west coast
of(cid:632)North America via Indonesia through
the(cid:632)Java Sea and Celebes Sea, and is a
complementary growth area identified
under(cid:632)Keppel’s Vision 2030.
Bifrost presents many potential areas for
synergy across Keppel’s business units,
including offering enhanced connectivity
for(cid:632)Keppel Data Centres and M1. Keppel T&T
is also working with Keppel Capital to
secure(cid:632)funding from co-investors for
Keppel’s fibre pairs.
During the year, Keppel T&T made good
progress on the Bifrost project, having
secured leading Philippine internet service
provider, Converge ICT Solutions, as its
first(cid:632)customer, as well as commenced
the(cid:632)manufacturing of the cable system.
Keppel continues to see strong demand
for(cid:632)its fibre pairs and is confident that most
of them would be committed before the
cable system is completed in 2024.
The global submarine cable systems market
is projected to grow to US$23 billion by
2026, representing a CAGR of 10.5% from
2021 to 20261. In particular, big cloud
players such as Google, Apple, and
Microsoft are increasingly investing in
Asia(cid:632)Pacific as a hub for submarine cable
infrastructure. To tap this burgeoning
market, Keppel T&T is actively exploring
1 Markets and Markets: Submarine Cable Systems
Market Report – Global Forecast to 2026.
M1 is harnessing the low latency and network slicing attributes of 5G SA
to provide next-generation 5G-powered solutions that have the ability to
improve efficiency while meeting customers’ needs.
In 2021, Keppel T&T entered into a joint build agreement with Facebook and Telin to jointly own and develop Bifrost, which directly connects Singapore to the west coast of
North America via Indonesia through the Java Sea and Celebes Sea.
Keppel Corporation Limited
61
M1 is making good progress in the
rollout of its 5G SA network coverage
in Singapore, and expects to achieve
nationwide outdoor coverage by
end-2022.
opportunities to develop other submarine
cable systems that will connect to other
continents using Singapore as a hub.
DIGITAL CONNECTIVITY
In line with the Group’s asset-light
business(cid:632)model under Vision 2030,
M1(cid:632)unlocked value(cid:632)from $580 million
worth(cid:632)of network assets in 2021. Capital
freed through(cid:632)the(cid:632)transfer of network
assets(cid:632)will be utilised for investments
in(cid:632)5G(cid:632)capabilities and digital(cid:632)solutions.
M1(cid:632)will(cid:632)continue to expand and offer its
range(cid:632)of(cid:632)solutions and(cid:632)services to its
enterprise customers, including small
and(cid:632)medium-sized enterprises.
Today, consumers demand not just ease
of(cid:632)connectivity and access to data, but
also(cid:632)lower latency and higher speeds,
which(cid:632)will(cid:632)drive the demand for 5G.
According(cid:632)to(cid:632)Allied Market Research,
the(cid:632)global 5G technology market, which
was(cid:632)valued at US$5 billion in 2020, is
projected to reach almost US$800 billion
by(cid:632)2030, growing at a(cid:632)CAGR of 65.8%
from(cid:632)2021 to 2030.
In 2021, M1 expanded its customer
base(cid:632)to(cid:632)2.2 million, up from 2.1 million
in(cid:632)the(cid:632)previous year. The number of
mobile(cid:632)customers grew 4% to 1.9 million
as(cid:632)at end-2021. Notably, its postpaid
customer base(cid:632)grew 6% yoy to 1.7 million
as(cid:632)at end-2021, which is the(cid:632)second
largest(cid:632)postpaid customer base(cid:632)in
Singapore. Meanwhile, M1’s fibre
customer(cid:632)base(cid:632)increased 3% in 2021
to(cid:632)235,000(cid:632)customers.
In 2021, M1 continued to step up its
efforts(cid:632)to power personalised experiences
without limits, making significant headway
in the rollout of its 5G SA network for
all consumers.
M1’s True 5G network was launched in an
exclusive market trial in July 2021, which
enabled all users to enjoy the revolutionary
benefits of 5G SA. By adding the 5G Booster
pack to their mobile plans, customers can
experience faster speeds, close to real-time
network responses and enhanced connectivity.
M1, in partnership with Samsung, was also
the first in the world to offer elevated call
experiences via the Voice over 5G New Radio
service on M1’s 5G SA network. M1 has
made(cid:632)good progress rolling out its 5G SA
network where it achieved 50% outdoor
coverage as at end-2021, and expects
to(cid:632)achieve nationwide outdoor coverage
by(cid:632)end-2022.
Following the consumer market trial,
M1(cid:632)was the first in Singapore to launch
5G(cid:632)SA commercialised enterprise solutions.
As(cid:632)part(cid:632)of its rollout of 5G SA solutions for
enterprises, M1 and Keppel Land unveiled
a(cid:632)suite of intelligent solutions for Marina
at(cid:632)Keppel Bay. Harnessing the low latency
and(cid:632)network slicing attributes of 5G SA,
the(cid:632)solutions demonstrated M1’s readiness
in providing next-generation 5G-powered
solutions that have the ability to improve
efficiency while meeting customers’ needs.
To further M1’s 5G ambition, M1 is
partnering Workforce Singapore to upskill
and train close to 10% of its entire
workforce(cid:632)to build a pool of talent with
up-to-date skills in 5G and emerging
technologies through on-the-job training
and(cid:632)relevant training courses.
M1 is also growing its Enterprise business
and has embarked on regional expansion
with the acquisition of Glocomp Systems,
a(cid:632)digital solutions provider in Malaysia.
Following the acquisition of AsiaPac
Technology, which focuses on cloud
services, the addition of Glocomp marks
M1’s continued expansion of its cloud and
managed services business, providing
strong synergies while further strengthening
M1’s enterprise digital service capabilities.
With the enhanced portfolio, M1 will
drive(cid:632)opportunities and harness synergies
within the Keppel Group to strengthen value
propositions and create more business
solutions to capture the B2B Connectivity
and Information & Communication
Technologies segments in the region.
With its wide range of end-to-end
solutions(cid:632)for businesses and consumers,
M1 will continue to work with technology
companies and government agencies to
drive 5G development. Some examples of
the initiatives include the Infocomm Media
Development Authority’s open testbeds,
where M1 is supporting businesses in
developing, adopting and commercialising
5G solutions. M1 will also continue
contributing towards enhancing Keppel’s
suite of solutions, as it explores more
5G-enabled business and collaboration
opportunities across the Group.
Annual Report 2021
62
PERFORMANCE REVIEW
OPERATING &
MARKET REVIEW
ASSET
MANAGEMENT
WE CREATE ENDURING VALUE WITH QUALITY
INVESTMENT PRODUCTS AND PROVIDE A PLATFORM
FOR RECYCLING CAPITAL AND TAPPING THIRD-PARTY
FUNDS FOR GROWTH.
EARNINGS HIGHLIGHTS ($ million)
Revenue
EBITDA
Operating Profit
Profit before Tax
Net Profit
2021
162
116
113
327
301
2020
135
276
273
304
280
2019
145
123
120
239
214
PROGRESS IN 2021
FOCUS FOR 2022/2023
• Assets under management (AUM) grew by
• Grow the Group’s AUM to $50 billion by end-2022,
about 14% yoy to $42 billion1.
with target to further grow to $100 billion.
• Raised total equity of about $3.5 billion and
• Support Keppel’s asset-light strategy by
completed around $5.5 billion in acquisitions
and divestments.
• Listed REITs and business trust continued to
harnessing synergies across the Group to
co-create quality solutions and deliver strong
returns to investors.
grow through strategic acquisitions, delivering
sustainable returns and stable recurring income.
• Keppel Capital inked four separate managed
• Facilitate the integration of Keppel’s business
units through OneKeppel Teams to build competitive
advantage and tap third-party funds for growth.
accounts with global investors to invest in core
infrastructure assets, high quality logistics assets
and commercial real estate.
• Pursue and develop innovative solutions in
collaboration with other Keppel business
segments and drive value chain integration.
Keppel Corporation Limited
The Asset Management segment
comprises(cid:632)Keppel Capital, as well as the
Group’s holdings in the listed REITs and
business trust, and private funds.
Despite gradual economic recovery, 2021
remained a challenging year for the global
economy, with the emergence of new
COVID-19 variants, continuing supply chain
disruptions and geopolitical tensions. At the
same time, volatility in global markets and
inflation continued to fuel demand for real
assets with long-term stable cash flows.
2021 was an active year for the Asset
Management segment, which continued
to(cid:632)create value for Keppel and investors.
Keppel Capital grew its AUM1 to $42 billion,
an increase of about 14% from $37 billion
a(cid:632)year ago. Looking ahead, Keppel Capital
is(cid:632)on track to achieve its $50 billion AUM
target by end-2022 and aims to further grow
its AUM to $100 billion over time. Keppel
Capital’s asset management fees2 rose
steadily to $233 million in 2021, an increase
of approximately 29% yoy.
Keppel continues to receive strong
demand(cid:632)from investors for the funds under
management, which are invested in real
assets that can serve as effective hedges
63
Looking ahead, Keppel Capital is on track to
achieve its $50 billion AUM target by end-2022
and aims to further grow its AUM to $100 billion.
against rising inflation. During the year,
Keppel Capital raised total equity of
about(cid:632)$3.5 billion, and completed around
$5.5 billion in acquisitions and divestments.
Value creation remained a key focus for
the(cid:632)listed REITs and business trust, which
continued to grow through acquisitions
and(cid:632)portfolio optimisation efforts during
the(cid:632)year. In the private funds space,
Keppel(cid:632)Capital achieved final close for
Keppel Asia Infrastructure Fund (KAIF)
and(cid:632)Keppel Data Centre Fund II (KDCF II),
while continuing to invest strategically and
proactively manage its portfolios to create
and extract value in a timely manner.
During the year, the OneKeppel Data Centre
and OneKeppel Infrastructure teams,
comprising talent and expertise from
various(cid:632)business units and functions,
were(cid:632)established to focus on investments
in(cid:632)data centres and various infrastructure
asset classes respectively, including
renewables, decarbonisation and
environmental solutions. OneKeppel Teams
adopt a cradle-to-maturity approach in
evaluating opportunities across the projects’
development stages, whether they are
investments by the Group’s operating
entities, private funds, and/or listed REITs
and business trust, thereby encouraging
the(cid:632)integration of Keppel’s business units
and value chains.
As part of Keppel’s integrated ecosystem,
Keppel Capital is uniquely positioned to
meet the rising demand for high-quality real
assets that the Group can develop and
operate. As it works toward Vision 2030,
Keppel Capital will harness synergies across
the Group to identify emerging opportunities
and capture new profit pools across the
lifespan of its investments.
REAL ESTATE
During the year, Keppel REIT Management
continued with its portfolio optimisation
efforts with the aim of enhancing the REIT’s
income resilience and improving total
returns to Unitholders.
In 2021, Keppel REIT grew its portfolio in
Singapore and Australia with the acquisition
of Keppel Bay Tower, Singapore’s first Green
Mark Platinum (Zero Energy) commercial
building, and Blue & William, a sustainable
Grade A office building currently under
development in North Sydney.
The addition of these two high quality
buildings reinforces the Manager’s
discipline(cid:632)to build a sustainable portfolio
that(cid:632)supports climate action as businesses
move towards a low-carbon future. During
the year, Keppel REIT also unlocked value
with the divestment of 275 George Street in
Brisbane, Australia.
Keppel REIT’s sustainable Grade A office building, Blue & William, which is under development in North Sydney,
is(cid:632)designed to achieve the 5 Star Green Star Design and As Built Rating by the Green Building Council of Australia,
as(cid:632)well as the 5.5 Stars National Australian Built Environment Rating System Base Building Energy Rating.
2
1 Gross asset value of investments and uninvested
capital commitments on a leveraged basis to
project fully-invested AUM.
Includes 100% fees from subsidiary managers, joint
ventures and associated entities, as well as share of
fees based on shareholding stake in an associate
with whom Keppel has strategic alliance.
Annual Report 2021
PERFORMANCE REVIEW
64
OPERATING & MARKET REVIEW
ASSET MANAGEMENT
As it works toward Vision 2030, Keppel Capital will harness synergies across
the(cid:632)Group to identify emerging opportunities and capture new profit pools across
the lifespan of its investments, from cradle to maturity.
With COVID-19 becoming increasingly
endemic, Grade A commercial buildings with
strong safety and service levels remain well
positioned to attract and retain tenants.
With(cid:632)sustainability at the core of the Keppel
Group’s strategy, the Manager will continue
to actively manage its portfolio of Grade A
commercial buildings to ensure stable and
sustainable distributions to Unitholders and
achieve long-term growth.
Over in the United States (US), Keppel Pacific
Oak US REIT (KORE) expanded and solidified
its presence in the fast-growing 18-Hour
cities of Nashville, Tennesse, and Denver,
Colorado, with the acquisitions of Bridge
Crossing and 105 Edgeview respectively.
Both cities are key growth markets that
demonstrate positive economic and office
fundamentals, as well as benefit from
significant technology investments.
Notwithstanding the continued challenges
posed by COVID-19, KORE will continue to
focus on its key growth markets in the US,
seeking high-quality assets and accretive
acquisitions in Super Sun Belts and 18-Hour
Cities, where demand for quality office
spaces has been increasing as more people
move out of the densely populated cities.
Meanwhile, Prime US REIT, in which
Keppel(cid:632)Capital is a strategic partner,
completed the(cid:632)acquisitions of Sorrento
Towers in San(cid:632)Diego, California, and
One(cid:632)Town Center in Boca Raton, Florida.
In the private equity space, Alpha Investment
Partners (Alpha) secured a $360 million
separate managed account (SMA) from
PGGM, a cooperative Dutch pension fund
service provider to focus on core-plus
opportunities in commercial real estate.
In January 2022, Keppel Vietnam Fund (KVF)
and a co-investor of KVF, together with
Keppel Land, entered into a binding heads
of(cid:632)agreement with Phu Long Real Estate
Joint Stock Company and its subsidiary
to(cid:632)acquire an interest in three residential
land plots in Mailand Hanoi City, Hoai Duc
District, in Hanoi. This marks the first
acquisition by KVF since it achieved
first(cid:632)closing of US$400 million.
DATA CENTRES
Value creation remains a priority for
Keppel(cid:632)DC REIT Management, which
continued to deliver on acquisitions and
portfolio optimisation efforts, in line with
its(cid:632)aim to grow its portfolio with at least
90%(cid:632)of its AUM invested in data centres.
Keppel DC REIT is well positioned
to(cid:632)benefit(cid:632)from the acceleration of
digitalisation. Its strong operational expertise,
extensive industry network and healthy
balance sheet enable it to capture strategic
opportunities for growth. Keppel DC REIT
will(cid:632)also leverage the Keppel ecosystem
which provides end-to-end solutions
from(cid:632)project development to facilities
management and innovative carbon
reduction solutions to grow sustainably.
Collectively, Keppel Data(cid:632)Centres and
the(cid:632)private data centre funds under
Keppel(cid:632)Capital have more than(cid:632)$2 billion
worth of assets under management and
development, which Keppel DC REIT can
potentially acquire.
Meanwhile, Keppel’s private data centre
funds, which are managed by Alpha, work
in(cid:632)close collaboration with Keppel Data
Centres to capture investment opportunities
in greenfield and brownfield data centre
assets in Asia Pacific and Europe.
During the year, Keppel DC REIT acquired
three assets across the Netherlands,
China(cid:632)and the UK, as well as invested in
the(cid:632)bonds and preference shares issued by
M1 Network Private Limited. It also completed
the divestment of iseek Data Centre in
Brisbane, Australia, which is in line with
Keppel DC REIT’s strategy to continually
review and selectively consider divestments
to ensure an optimal portfolio mix.
In 2021, KDCF II secured Asian Infrastructure
Investment Bank as an investor and
achieved a closing with US$1.1 billion
in(cid:632)total commitments, including
co-investment capital. During the(cid:632)year,
KDCF(cid:632)II also acquired its first project
to(cid:632)develop a greenfield data centre
in(cid:632)Shanghai. Since its launch in December
2020, KDCF(cid:632)II(cid:632)has attracted a diverse
group(cid:632)of investors from Asia and Europe,
Keppel Corporation Limited
KDCF II, in collaboration
with Keppel Data Centres,
is developing a greenfield
data centre in Shanghai, China.
65
As part of the Group’s plan to grow
its renewable energy portfolio,
Keppel(cid:632)announced the acquisition
of a majority joint venture stake in
leading solar platform, Cleantech.
Annual Report 2021
including sovereign wealth funds,
financial(cid:632)institutions, insurance funds
and(cid:632)pension funds.
INFRASTRUCTURE
Keppel Infrastructure Fund Management
(KIFM), the Trustee-Manager of Keppel
Infrastructure Trust (KIT) delivered
stable(cid:632)performance in 2021, and declared
a(cid:632)higher Distribution per Unit (DPU) of
3.78(cid:632)cents in(cid:632)FY 2021, a 1.6% increase
yoy.(cid:632)This is KIT’s(cid:632)first DPU increase
since(cid:632)FY(cid:632)2016, and(cid:632)was supported by
the(cid:632)strong(cid:632)and(cid:632)stable(cid:632)performance by
Ixom(cid:632)and(cid:632)resilient cashflow contribution
from KIT’s(cid:632)overall portfolio.
Following a strategic review, KIFM has
identified its targeted sectors for growth,
focusing on core and core plus infrastructure
businesses and assets in the developed
markets of Asia Pacific and Europe,
the(cid:632)Middle East and Africa. With a focus
on(cid:632)evergreen, yield accretive businesses
and assets that will benefit from secular
growth trends, KIFM will continue to build
a(cid:632)well-diversified portfolio of infrastructure
businesses and assets that can generate
long-term growth in distributions and
contribute to building a sustainable future.
In February 2022, KIFM completed KIT’s
minority investment in Aramco Gas
Pipelines Company, which holds a 20-year
lease and lease back agreement over the
usage rights of Aramco’s gas pipelines
network. KIT will receive quarterly payments
backed by a minimum volume commitment
from Aramco. Beyond income diversification,
the investment also supports the energy
transition of the Saudi economy through
the(cid:632)use of gas.
On the private funds side, KAIF achieved its
final close at the end of 2021, having received
capital commitments of approximately
US$1 billion from global institutional investors.
In December 2021, Keppel Corporation,
together with KAIF and a co-investor of KAIF,
jointly acquired a majority joint venture stake
in(cid:632)Cleantech Renewable Assets (Cleantech),
a(cid:632)leading solar platform. The investment
in(cid:632)Cleantech marks KAIF’s first(cid:632)renewable
energy investment and will form its beachhead
into the burgeoning solar(cid:632)energy sector in
Asia Pacific.
Seizing opportunities from the rising demand
for infrastructure assets, Keppel Capital inked
two SMAs for an aggregate of US$600 million
from international financial institutions. Many
investors see infrastructure as an attractive
asset class that is less susceptible to major
economic cycles and short-term fluctuations,
and which also provides sustainable, stable
and predictable income streams.
ALTERNATIVE ASSETS
In 2021, Keppel Capital partnered a global
institutional investor to launch a China
logistics property fund to invest in developing
high-quality logistics assets in key logistics
hubs in China. The inaugural China-focused
logistics property fund has an initial total equity
commitment of around RMB1.4 billion.
Meanwhile, Keppel-Pierfront Private
Credit(cid:632)Fund achieved its second close of
approximately US$500 million, including
co-investment capital.
PERFORMANCE REVIEW
66
FINANCIAL
REVIEW
WE WILL SUSTAIN VALUE CREATION
THROUGH EXECUTION EXCELLENCE,
AND STRONG FINANCIAL DISCIPLINE.
KEY PERFORMANCE INDICATORS
Revenue
Net Profit/(Loss)
Earnings/(Loss) per Share
Return on Equity
Economic Value Added
Operating Cash Flow
Free Cash Flow
Total Cash Dividend per Share
n.m.f. denotes no meaningful figure
2021
$ million
8,625
1,023
56.2 cts
9.1%
204
(275)
1,750
33.0 cts
21 vs 20
% +/(-)
2020
$ million
20 vs 19
% +/(-)
31
n.m.f.
n.m.f.
n.m.f.
n.m.f.
n.m.f.
n.m.f.
230
6,574
(506)
(27.8) cts
(4.6)%
(1,368)
202
(72)
10.0 cts
(13)
n.m.f.
n.m.f.
n.m.f.
n.m.f.
n.m.f.
n.m.f.
(50)
2019
$ million
7,580
707
38.9 cts
6.3%
188
(825)
(653)
20.0 cts
GROUP OVERVIEW
The Group achieved a net profit of $1.02 billion
for 2021, reversing the net loss of $506 million
a year ago. All segments registered
improved year-on-year (yoy) performance.
Urban Development continues to be the
biggest contributor to the Group’s bottom-
line, earning $763 million in profits for the
year. Connectivity also had a strong year
with an(cid:632)almost fivefold increase in net profit.
As(cid:632)the(cid:632)financial twin to other segments,
the(cid:632)Asset Management business remains
a(cid:632)major contributor, accounting for close
to(cid:632)30% of the Group’s profits. In 2021,
the(cid:632)Group recorded strong returns from our
investments in start-ups and venture
capital(cid:632)funds which are reported under
Corporate & Others. Although Energy
&(cid:632)Environment reported a net loss,
the(cid:632)loss(cid:632)was significantly lower than the
prior year’s, and was largely attributable to
the impairment provision for the Group’s
exposure to KrisEnergy.
The strong performance translated
to(cid:632)earnings per share of 56.2 cents, as
compared to loss per share of 27.8 cents
in(cid:632)2020. Correspondingly, Return on Equity
(ROE) was positive 9.1%, compared to
negative 4.6% for 2020. Economic Value
Keppel Corporation Limited
67
Recurring income grew 33% to $292 million in 2021
with(cid:632)stronger(cid:632)contributions from asset management
and(cid:632)the(cid:632)REITs and(cid:632)business trust.
MULTIPLE INCOME STREAMS ($ million)
1,600
1,200
800
400
0
-400
-800
-1,200
Profit from Capital Recycling
FV Gain/(Loss) on Investments
Revaluation
EPC/Development for Sale
Recurring Income
Corporate Costs, Impairments and Others
Total
2020
2021
111
(51)
163
79
220
61
315
317
436
292
(1,028)
(506)
(398)
1,023
Added (EVA) was positive $204 million for
2021, compared to negative $1,368 million
for 2020.
Free cash inflow of $1.75 billion was an
improvement over the free cash outflow of
$72 million in 2020. This was mainly due to
proceeds from enbloc sales of certain China
and Vietnam property trading projects,
completion of the divestment of Keppel Bay
Tower, as well as the disposal of M1’s network
assets, all of which are part of the Group’s
asset monetisation programme. In addition,
higher dividend income, as well as lower
investments and capital expenditure, partly
offset by higher working capital requirements,
further contributed to the improvement in
free cash flow. Net gearing decreased from
0.91 times a year ago to 0.68 times at the
end of 2021 on the back of reduced net debt
as well as a higher equity base.
Total cash dividend for 2021 will be 33.0 cents
per share, which is more than triple the total
dividend for 2020. This comprises a proposed
final cash dividend of 21.0 cents per share as
well as an interim cash dividend of 12.0 cents
per share paid in the third quarter of 2021.
In summary, the Group has delivered strong
financial performance for 2021 with all
segments performing better yoy, evidenced
by the sharp improvement in ROE, healthy
net gearing, and positive free cash flow.
Guided by Vision 2030, the Group is
committed to improving earnings quality,
maintaining financial discipline, and building
a sustainable future.
MULTIPLE INCOME STREAMS
As part of Vision 2030, the Group remains
focused on improving earnings quality with
multiple income streams. In addition to
the(cid:632)increase in recurring income, most of
the(cid:632)other income streams also performed
better yoy. Recurring income increased
33%(cid:632)to $292 million in 2021, underpinned
by(cid:632)higher contributions from the stakes
in(cid:632)the Group’s REITs and business trust,
and(cid:632)asset management business, as well as
lower share of losses from offshore &
marine associates. Earnings from EPC/
Development for Sale were much higher
yoy(cid:632)on(cid:632)the back of several enbloc sales by
the(cid:632)Urban Development segment in 2021.
With the gradual recovery of the global
economy from the COVID-19 crisis, the
Group also recorded higher revaluation
gains from investment properties and
data(cid:632)centres, as well as fair value gains
on(cid:632)investments, as compared to losses
in(cid:632)the previous year. Impairments
in(cid:632)2021(cid:632)of(cid:632)$514 million were much
lower(cid:632)than(cid:632)in 2020, which had seen
significant impairments largely from
the(cid:632)offshore & marine business.
Annual Report 2021
PERFORMANCE REVIEW
68
FINANCIAL REVIEW
SEGMENT OPERATIONS
Group revenue of $8,625 million was
$2,051 million or 31% higher than the
preceding year. Revenue from Energy &
Environment increased by $1,631 million
or(cid:632)41% to $5,574 million, led by higher
electricity and gas sales, higher progressive
revenue recognition from the Tuas Nexus
Integrated Waste Management Facility
project in Singapore which was secured
in(cid:632)April 2020, higher progressive revenue
recognition from the Hong Kong Integrated
Waste Management Facility project, as
well(cid:632)as higher revenue from the offshore
&(cid:632)marine business. These were partially
offset by the completion of the Keppel
Marina East Desalination Plant project
in(cid:632)June 2020, as well as the absence of
revenue from the Doha North Sewage
Treatment Works due to the cessation of
the(cid:632)operation and maintenance contract
in(cid:632)July 2020. The higher revenue in the
offshore & marine business was mainly
due(cid:632)to higher revenue recognition from
certain ongoing projects and revenue from
new projects in 2021, which were partly
offset by cessation of revenue recognition
on Awilco contracts and deferment of
some(cid:632)projects. Major jobs delivered by the
offshore & marine business in 2021 included
two LNG bunker vessels, an(cid:632)LNG(cid:632)carrier,
an(cid:632)FLNG turret, four Floating Production
Storage and Offloading vessel modification
and upgrading projects, and(cid:632)a(cid:632)Floating
Storage Regasification Unit(cid:632)conversion
project. Revenue from Urban Development
increased by $354 million to $1,629 million
mainly due to(cid:632)higher revenue from property
trading projects in China and Singapore.
Revenue for Connectivity of $1,260 million
was marginally above that of 2020. Higher
revenues from the logistics and data centre
businesses, and higher handset and
equipment sales by M1, were partly offset
by(cid:632)the lower service revenue from M1.
Revenue from Asset Management increased
by $27 million to $162 million mainly due
to(cid:632)higher fees resulting from increased
acquisition and divestment activities,
and(cid:632)from additional fund commitments
secured during the year.
Group net profit was $1,023 million, as
compared to a net loss of $506 million
in 2020. All segments recorded
improved performance.
Energy & Environment’s net loss was
$414 million as compared to net loss of
$1,181 million in 2020. Excluding impairments
related to KrisEnergy in both years, the
segment’s net loss for 2021 was $96 million,
a marked improvement from the prior year’s
net loss of $1,142 million. On the same
basis, net loss from the offshore & marine
business of $77 million was substantially
Keppel Corporation Limited
REVENUE ($ million)
5,600
4,800
4,000
3,200
2,400
1,600
800
0
2019
2020
2021
Energy &
Environment
Urban
Development
Connectivity
Asset
Management
Corporate
& Others
4,969
3,943
5,574
1,336
1,275
1,629
1,128
1,220
1,260
145
135
162
2
1
0
NET PROFIT/(LOSS) ($ million)
750
500
250
0
-250
-500
-750
-1,000
-1,250
2019
2020
2021
Energy &
Environment
Urban
Development
Connectivity
Asset
Management
Corporate
& Others
(101)
(1,181)
(414)
483
438
763
136
13
64
214
280
301
(25)
(56)
309
lower than the $1,194 million net loss in
the(cid:632)preceding year. This was mainly due to
the larger impairments recognised in 2020,
while 2021 benefitted from the share of
Floatel’s restructuring gain. Excluding
revaluations, impairments and divestments
in both years, net loss from offshore &
marine decreased from $301 million to
$181 million. The better results, despite
much lower government relief measures
related to the COVID-19 pandemic, were
largely due to the focus on overheads
reduction, as well as the lower share of
losses from associated companies, partly
offset by higher net interest expense.
The contribution from our infrastructure
business was resilient despite volatile
global(cid:632)energy prices as well as COVID-19’s
impact on ongoing operations and projects,
due to strong execution and risk management.
The 2021 results included $23 million of
closure costs on interest rate swaps
following the refinancing plan for an asset.
Net profit from Urban Development
increased by 74% or $325 million to
$763 million. The strong results were driven
by higher contributions from property
trading projects in China and Vietnam, as
well as gains from the disposal of interests
in the Dong Nai project in Vietnam, Serenity
Villas project in Chengdu, and China Chic
project in Nanjing, and divestment of a
partial interest in Tianjin Fushi Real Estate
Development Co., Ltd. These were partly
offset by lower fair value gains from
investment properties, impairment provision
for a hotel in Myanmar, as well as lower
contribution from the Sino-Singapore
Tianjin(cid:632)Eco-City which saw lower profits
from the sale of one commercial &
residential land plot in 2021 as compared
to(cid:632)two residential land plots in the
prior year.
Connectivity’s net profit of $64 million
was(cid:632)$51 million higher than 2020. Our
data(cid:632)centre business saw an improvement
in(cid:632)bottom-line by $11 million, largely
supported by gains from the disposals
of(cid:632)a(cid:632)data centre in Frankfurt and
Keppel’s(cid:632)stake in Cloud Engine (Beijing)
Network Technology. Net profit from
M1(cid:632)was $57 million in 2021 compared
to(cid:632)$65 million in the preceding year.
Excluding COVID-19-related government
grants in both years, M1’s net profit would
have been $7 million higher yoy. Despite
lower service revenue, M1’s profit
contribution remained strong through cost
and overheads management. Logistics’
net(cid:632)profit of $26 million was a reversal
from(cid:632)the prior year’s net loss of $22 million.
This(cid:632)was led by lower operating loss, as well
as gains from divestment of interests in
Wuhu(cid:632)Sanshan Port Company Limited and
in Keppel Logistics (Foshan), following an
agreement reached with local authorities
on(cid:632)the compensation for the closure of
the(cid:632)Lanshi port.
Net profit from Asset Management
increased by $21 million to $301 million.
In(cid:632)2020, there was a mark-to-market gain
recognised from the reclassification of the
Group’s interest in Keppel Infrastructure
Trust (KIT) from an associated company
to(cid:632)an investment following the loss of
significant influence over KIT. Excluding
the(cid:632)reclassification gain, net profit was
$152 million higher than 2020. For 2021,
the(cid:632)segment recorded higher fee income
arising from acquisitions and divestments
completed, and from additional fund
commitments secured during the year.
In(cid:632)addition, there was recognition of
mark-to-market gains from investments,
higher dividend income from KIT, as well as
fair value gains on investment properties
and data centres from Keppel REIT,
Keppel(cid:632)DC REIT, Alpha Data Centre Fund
and Keppel Data Centre Fund II. In 2020,
there was the recognition of gains from the
sale of(cid:632)units in Keppel DC REIT, divestment
of interest in Gimi MS(cid:632)Corporation, and
mark-to-market losses(cid:632)from investments.
Corporate & Others recorded net profit
of(cid:632)$309 million in 2021 as compared to
net(cid:632)loss of $56 million in the prior year.
69
EBITDA ($ million)
1,000
750
500
250
0
-250
-500
-750
-1,000
2019
2020
2021
Energy &
Environment
Urban
Development
Connectivity
Asset
Management
Corporate
& Others
268
(671)
(376)
545
645
1,036
385
259
288
123
276
116
(69)
(87)
241
All business segments recorded higher
revenues, contributing collectively to
a(cid:632)31% increase in Group revenue at
$8.62 billion in FY 2021.
OPERATING PROFIT/(LOSS) ($ million)
1,200
900
600
300
0
-300
-600
-900
2019
2020
2021
Energy &
Environment
Urban
Development
Connectivity
Asset
Management
Corporate
& Others
116
(822)
(522)
507
605
993
210
46
86
120
273
113
(76)
(94)
228
Annual Report 2021
PERFORMANCE REVIEW
70
FINANCIAL REVIEW
PROFIT/(LOSS) BEFORE TAX ($ million)
1,050
700
350
0
-350
-700
-1,050
-1,400
2019
2020
2021
ROE & DIVIDEND
%
15
10
5
0
-5
Energy &
Environment
Urban
Development
Connectivity
Asset
Management
Corporate
& Others
(121)
(1,251)
(469)
676
720
1,072
196
29
86
239
304
327
(36)
(57)
319
cents
45
30
15
0
-15
ROE (%)
Full Year Dividend (cts)
Interim Dividend (cts)
2016
2017
2018
2019
2020
2021
6.9
20
8
6.91
22
8
8.4
30
152
6.3
20
8
(4.6)
10
3
9.1
33
12
1 Excludes one-off financial penalty from global resolution & related costs.
2
Includes special cash dividend of 5.0 cents/share.
This(cid:632)was mainly due to fair value gains
instead of losses on investments, and higher
investment income. The fair value gains
were largely from investments in new
technology and start-ups, in particular,
Envision AESC Global Investment L.P..
SHAREHOLDER RETURNS
ROE was positive 9.1%, compared to
negative 4.6% in the previous year, backed
by the strong growth in profitability.
Taking into account the strong
performance(cid:632)of the Group, and to reward
shareholders for their confidence in the
Company, the Company will be distributing
a(cid:632)total cash dividend of 33.0 cents per
share(cid:632)for 2021, comprising a proposed
final(cid:632)cash dividend of 21.0 cents per
share(cid:632)as well as the interim cash dividend
of(cid:632)12.0 cents per share distributed in
the(cid:632)third quarter of 2021. On a per
share(cid:632)basis, it translates into a gross
yield(cid:632)of(cid:632)6.4% on the Company’s last
transacted share price of $5.12 as at
31(cid:632)December 2021.
ECONOMIC VALUE ADDED
In 2021, EVA was positive $204 million as
compared to negative $1,368 million in
the(cid:632)previous year. This was attributable
to(cid:632)a(cid:632)net operating profit after tax in 2021
as(cid:632)compared to net operating loss
after(cid:632)tax(cid:632)in 2020, as well as lower
capital charge.
Capital charge decreased by $143 million
as(cid:632)a result of lower Weighted Average
Cost(cid:632)of Capital (WACC), partly offset by
higher Average EVA Capital Employed.
EVA
Profit/(loss) after tax (Note 1)
Adjustment for:
Interest expense
Tax effect on interest expense adjustments (Note 2)
Provisions, deferred tax, amortisation & other adjustments
Net Operating Profit After Tax (NOPAT)
Average EVA Capital Employed (Note 3)
Weighted Average Cost of Capital (Note 4)
Capital Charge
2021
$ million
21 vs 20
+/(-)
2020
$ million
20 vs 19
+/(-)
2019
$ million
735
1,467
(732)
(1,526)
794
251
(43)
121
1,064
20,283
4.24%
(860)
(41)
7
(4)
1,429
29
(0.71)%
143
292
(50)
125
(365)
20,254
4.95%
(1,003)
(21)
3
3
(1,541)
2,188
(0.52)%
(15)
313
(53)
122
1,176
18,066
5.47%
(988)
Economic Value Added
204
1,572
(1,368)
(1,556)
188
Notes:
1. Profit/(loss) after tax excludes net revaluation gain on investment properties.
2. The reported current tax is adjusted for statutory tax impact on interest expenses.
3. Average EVA Capital Employed is derived from the averages of net assets, interest-bearing liabilities, timing of provisions, and other adjustments.
4. WACC 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 5.0% (2020: 5.0%);
b. Risk-free rate of 0.90% (2020: 1.75%) based on yield-to-maturity of Singapore Government 10-year Bonds;
c. Unlevered beta at 0.72 (2020: 0.72); and
d. Pre-tax Cost of Debt at 0.49% (2020: 1.48%) using 5-year Singapore Dollar Swap Offer Rate plus 85 basis points (2020: 60 basis points).
Keppel Corporation Limited
Net gearing decreased to 0.68x as at end-2021 from 0.91x as
at(cid:632)end-2020, supported by Keppel’s asset-light business model
and proactive asset monetisation.
71
WACC decreased from 4.95% to 4.24%
mainly due to a decrease in risk-free rate
and lower cost of debt. Average EVA
Capital(cid:632)Employed increased by $29 million
from $20.25 billion to $20.28 billion mainly
due to higher equity.
FINANCIAL POSITION
Group shareholders’ funds increased
by(cid:632)$0.93 billion to $11.66 billion as at
31(cid:632)December 2021. The increase was
mainly attributable to retained profits, an
increase in fair value on cash flow hedges
and foreign exchange translation gains,
partly offset by the final dividend payment of
7.0 cents per share in respect of financial
year 2020, the interim dividend payment
of(cid:632)12.0 cents per share in respect of the
half(cid:632)year ended 30 June 2021, and fair value
losses from investments held at fair value
through other comprehensive income.
Group total assets were $32.32 billion as at
31 December 2021, $0.22 billion higher than
the previous year end. Non-current assets
decreased mainly due to depreciation and
disposal of fixed assets, partly offset by fair
value gains in investment properties and
fair(cid:632)value gains of investments. There was
also the reclassification of long-term assets,
fixed assets, investments in associated
companies and right-of-use assets to assets
classified as held for sale. The increase in
current assets was mainly due to an increase
in bank balances, deposits & cash and
contract assets, partly offset by a decrease
in(cid:632)debtors and stocks, as well as a lower
amount of assets classified as held for sale.
Group total liabilities of $19.88 billion as at
31 December 2021 were $1.07 billion lower
than the previous year end. This was largely
attributable to the decrease in contract
liabilities and net repayment of term loans,
partly offset by the increase in creditors.
Group net debt decreased by $1.72 billion to
$8.40 billion as at 31 December 2021, driven
largely by proceeds from divestments, partly
offset by working capital requirements and
dividend payments. Total equity increased
by $1.29 billion, mainly due to increase in
shareholders’ funds as explained above and
the issuance of perpetual securities during
the year. As a result, group net gearing ratio
decreased from 91% as at 31 December 2020
to 68% as at 31 December 2021.
TOTAL ASSETS OWNED ($ million)
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Fixed assets
Properties
Right-of-use assets
Associated companies, joint ventures & investments
Stocks
Contract assets
Debtors & others
Bank balances, deposits & cash
Total
2019
2,902
3,022
760
7,121
5,543
3,497
6,693
1,784
2020
2,716
3,674
583
7,355
4,959
2,657
7,682
2,480
2021
2,044
4,256
529
7,525
4,604
3,170
6,578
3,617
31,322
32,106
32,323
TOTAL LIABILITIES OWED AND CAPITAL INVESTED ($ million)
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Shareholders' funds
Perpetual securities
Non-controlling interests
Creditors
Contract liabilities
Term loans & bank overdrafts
Lease liabilities
Other liabilities
Total
2019
2020
2021
11,211
10,728
11,655
–
435
5,795
1,825
–
428
5,831
2,072
401
385
6,436
1,002
11,060
12,039
11,455
597
399
564
444
562
427
31,322
32,106
32,323
Annual Report 2021
PERFORMANCE REVIEW
72
FINANCIAL REVIEW
TOTAL SHAREHOLDER RETURN (%)
50
40
30
20
10
0
-10
-20
-30
-40
-50
10-year annualised TSR as at 2021
-1.8%
Keppel
5.2%
STI
Keppel
STI
Source: Bloomberg
2012
22.9
23.3
2013
9.0
3.2
2014
(17.8)
9.5
2015
(22.3)
(11.4)
2016
(6.3)
3.8
2017
30.9
22.0
2018
(16.4)
(6.5)
2019
18.5
9.4
2020
(18.6)
(8.1)
2021
(1.5)
13.6
TOTAL SHAREHOLDER RETURN
Our 2021 Total Shareholder Return (TSR)
of(cid:632)negative 1.5% was 15.1 percentage
points(cid:632)below the benchmark Straits Times
Index’s (STI) TSR of positive 13.6%.
Our(cid:632)10-year annualised TSR growth rate
was(cid:632)negative 1.8% as compared to STI’s
positive 5.2%.
CASH FLOW
Free cash inflow was $1.75 billion in 2021
as(cid:632)compared to free cash outflow of
$72 million in 2020. The improved free
cash(cid:632)flow over the preceding year was
mainly due to proceeds from enbloc sales
of(cid:632)certain China and Vietnam property
trading projects, the completion of the
divestment of Keppel Bay Tower, as well
as(cid:632)the disposal of M1’s network assets,
all(cid:632)of which were part of the Group’s asset
monetisation programme.
Total distribution to shareholders of the
Company and non-controlling shareholders
of subsidiaries for the year amounted
to(cid:632)$357 million.
BORROWINGS1
The Group borrows from local and foreign
banks in the form of short-term and
long-term loans and project loans.
The(cid:632)Group also taps the debt capital
market(cid:632)via issuance of primarily
Singapore(cid:632)dollar bonds. Total Group
borrowings excluding lease liabilities
as(cid:632)at(cid:632)the end of 2021 were $11.5 billion
(2020: $12.0 billion and 2019: $11.1 billion).
At the end of 2021, 41% (2020: 37% and
2019: 41%) of Group borrowings were
repayable within one year with the
balance(cid:632)largely repayable more than
two(cid:632)years later.
Unsecured borrowings constituted 94%
(2020: 94% and 2019: 96%) of total
CASH FLOW
Operating profit
Depreciation, amortisation & other non-cash items
Cash flow provided by operations before changes in working capital
Provisions made for stocks, contract assets and doubtful debts
Working capital changes
Interest receipt and payment & tax paid
Net cash from/(used in) operating activities
Investments & capital expenditure
Divestments & dividend income
Advances from/(to) associated companies & joint ventures
Net cash from/(used in) investing activities
Free cash flow
2021
$ million
21 vs 20
+/(-)
2020
$ million
20 vs 19
+/(-)
2019
$ million
898
(570)
328
246
(432)
(417)
(275)
(695)
2,718
2
2,025
1,750
890
(661)
229
(455)
(264)
13
(477)
536
1,820
(57)
2,299
1,822
8
91
99
701
(168)
(430)
202
(1,231)
898
59
(274)
(72)
(869)
(36)
(905)
662
1,318
(48)
1,027
1,082
370
(38)
1,414
2,441
877
127
1,004
39
(1,486)
(382)
(825)
(2,313)
528
97
(1,688)
(2,513)
Dividend paid to shareholders of the Company & subsidiaries
(357)
(60)
(297)
133
(430)
Keppel Corporation Limited
73
At the Annual General Meeting in 2021,
shareholders gave their approval for the
mandate to buy back shares. During the
year, 2,560,000 shares were bought back
and held as treasury shares. The Company
also transferred 4,668,215 treasury
shares(cid:632)to employees upon vesting of
shares(cid:632)released under the KCL Share Plans.
As at the end of the year, the Company
had(cid:632)943,259 treasury shares. Except for
the(cid:632)transfer, there was no other sale,
transfer, disposal, cancellation and/or
use(cid:632)of(cid:632)treasury shares during the year.
DEBT MATURITY1 ($ million)
borrowings with the balance secured by
properties and other assets. Secured
borrowings are mainly for financing of
investment properties and project finance
loans for property development projects.
The net book value of properties and assets
pledged/mortgaged to financial institutions
amounted to $2.22 billion (2020: $2.22 billion
and 2019: $0.96 billion).
Singapore dollar borrowings represented
64% (2020: 73% and 2019: 78%) of total
borrowings after taking into account the
effect of derivative financial instruments.
The balance was mainly in US dollars.
Foreign currency borrowings were drawn
to(cid:632)hedge against the Group’s overseas
investments and receivables that were
denominated in foreign currencies.
Fixed rate borrowings constituted 70%
(2020: 62% and 2019: 63%) of total
borrowings after taking into account the
effect of derivative financial instruments
with the balance at floating rates. Excluding
notional hedge amount relating to highly
probable future borrowings, the Group
has(cid:632)cross currency swap and interest
rate(cid:632)swap agreements with notional
amount(cid:632)totalling $4,643 million whereby
it(cid:632)receives foreign currency fixed rates
and(cid:632)variable rates equal to EURIBOR
and(cid:632)AUD BBSY (in the case of the cross
currency swaps) and variable rates
equal(cid:632)to(cid:632)SOR, SORA and USD-LIBOR
(in(cid:632)the(cid:632)case of interest rate swaps)
and(cid:632)pays(cid:632)fixed rates of between 0.19%
and(cid:632)3.62% on the notional amount. Details
of these derivative financial instruments
are(cid:632)disclosed in the notes to the
financial statements.
The weighted average tenor of the Group’s
debt was about three years at end-2021
and(cid:632)at end-2020, with an increase in average
cost of funds as compared to end-2020.
CAPITAL STRUCTURE &
FINANCIAL RESOURCES
The Group maintains a strong balance
sheet(cid:632)and an efficient capital structure to
maximise return for shareholders.
Total equity as at end-2021 was $12.44 billion
as compared to $11.16 billion as at end-2020
and $11.65 billion as at end-2019. The Group
was in a net debt (including lease liabilities)
position of $8,400 million as at end-2021,
which was below the $10,123 million as
at(cid:632)end-2020 and the $9,874 million as at
end-2019. The Group’s net gearing ratio was
0.68 times as at end-2021, compared to
0.91 times as at end-2020.
Free cash inflow surged to $1.75 billion
in FY 2021 from a $72 million outflow
in(cid:632)FY 2020, backed by strong progress in
Keppel’s asset monetisation programme.
> 5 Years
4-5 Years
3-4 Years
2-3 Years
1-2 Years
< 1 Year
Total
1,213
894
1,242
1,794
1,653
4,659
10%
8%
11%
16%
14%
41%
11,455
100%
SECURED/UNSECURED BORROWINGS1 (%)
FIXED/FLOATING BORROWINGS1 (%)
BORROWINGS BY CURRENCY1 (%)
Secured
Unsecured
Total
6
94
100
Fixed
Floating
Total
70
30
100
SGD
USD
Others
Total
64
28
8
100
1 Borrowings exclude lease liabilities.
Annual Report 2021
PERFORMANCE REVIEW
74
FINANCIAL REVIEW
The Group’s strong financial capacity allows us to both pursue
growth opportunities in line with Vision 2030 and reward shareholders.
The Group continues to be able to
tap(cid:632)into(cid:632)the debt capital market at
competitive terms.
NET DEBT/(GEARING)
Net Gearing = Borrowings + Lease Liabilities – Cash
Total Equity
As part of its liquidity management,
the(cid:632)Group has built up adequate cash
reserves as well as sufficient undrawn
banking facilities and capital market
programmes. Funding of working capital
requirements, capital expenditure and
investment needs was made through a
mix(cid:632)of short-term money market borrowings,
commercial papers, bank loans as well
as(cid:632)medium/long-term bonds via the
debt(cid:632)capital market.
$ million
18,000
12,000
6,000
0
-6,000
-12,000
As at end-2021, total available credit
facilities, including cash at Corporate
Treasury and bank guarantee
facilities,(cid:632)amounted to $8.08 billion
(2020:(cid:632)$6.53 billion).
CRITICAL ACCOUNTING
JUDGMENTS & ESTIMATES
The Group’s significant accounting
policies(cid:632)are discussed in more detail in
the(cid:632)notes to the financial statements.
The(cid:632)preparation of financial statements
requires management to exercise its
judgment in the process of applying
the(cid:632)accounting policies. It also requires
the(cid:632)use of accounting estimates and
assumptions which affect the reported
amounts of assets, liabilities, income and
expenses. Critical accounting judgments
and estimates are described in Note 2.28
to(cid:632)the financial statements.
FINANCIAL CAPACITY
Net Debt
Total Equity
Net Gearing
INTEREST COVERAGE
Interest Coverage = EBIT
Interest Cost
$ million
1,500
1,000
500
0
EBIT
Total Interest Cost
Interest Cover
$ million
Remarks
No. of times
3
2
1
0
-1
-2
2019
2020
2021
(9,874)
(10,123)
(8,400)
11,646
11,156
12,441
(0.85)
(0.91)
(0.68)
Note: EBIT = Profit before tax + Interest expense
No. of times
6
4
2
0
2019
1,266
336
3.77
2020
38
337
0.11
2021
1,586
311
5.10
Cash at Corporate Treasury
1,331 37% of total cash of $3.62 billion
Available credit facilities to the Group
6,751 Credit facilities of $11.96 billion, of which $5.21 billion was utilised
Total
8,082
Keppel Corporation Limited
PERFORMANCE REVIEW
GROUP STRUCTURE
75
KEPPEL CORPORATION LIMITED
ENERGY & ENVIRONMENT
URBAN DEVELOPMENT
CONNECTIVITY
ASSET MANAGEMENT
• Offshore & Marine
• Power & Renewables
• Environment
• New Energy
• Urban Space Solutions
• End-to-End Master Development
• Data Centres
• Subsea Cable Systems
• Digital Connectivity
• Logistics
• Asset Management
• REITs & Business Trust
• Private Funds
KEPPEL OFFSHORE &
MARINE LTD
KEPPEL INFRASTRUCTURE
HOLDINGS PTE LTD
KEPPEL RENEWABLE
ENERGY PTE LTD
100%
100%
100%
KEPPEL LAND LIMITED
KEPPEL URBAN SOLUTIONS
PTE LTD
100%
100%
SINO-SINGAPORE TIANJIN
ECO-CITY INVESTMENT AND
DEVELOPMENT CO., LTD1
China
50%
KEPPEL TELECOMMUNICATIONS &
TRANSPORTATION LTD2
KEPPEL CAPITAL HOLDINGS
PTE LTD
M1 LIMITED3
100%
100%
KEPPEL REIT4,6
KEPPEL DC REIT5,6
KEPPEL PACIFIC OAK
US REIT6
100%
47%
20%
7%
GROUP CORPORATE SERVICES
Control & Accounts
Human Resources
Risk & Compliance
Corporate Communications
Information Technology
Strategy & Development
Cyber Security
Digital Office
Internal Audit
Legal
Health, Safety & Environment
Mergers & Acquisitions
Sustainability
Tax
Treasury
Notes:
1 Owned by a Singapore Consortium, which is in turn 90%-owned by the Keppel Group.
2 Owns 70% of Keppel Data Centres Holding Pte Ltd, with Keppel Land Limited owning the remaining 30%.
3 Owned by Keppel Telecommunications & Transportation Ltd (19%), and Konnectivity Pte Ltd (81%), which is in turn 80%-owned
by the Keppel Group.
4 Owned by Keppel Land Limited (40%) and Keppel Capital Holdings Pte Ltd (7%).
5 Owned by Keppel Telecommunications & Transportation Ltd (19.6%) and Keppel DC REIT Management Pte Ltd (0.4%).
6 Public listed company.
Updated as at 25 February 2022. This Group Structure illustrates the key business units of Keppel Corporation Limited. A complete
list of significant subsidiaries, associated companies and joint ventures is available in Note 40 of the Notes to Financial Statements
in this Report.
Annual Report 2021
GOVERNANCE
CORPORATE GOVERNANCE
76
The Board and management of Keppel
Corporation Limited (“KCL”, or the “Company”)
firmly believe that a genuine commitment
to(cid:632)good corporate governance is essential
to(cid:632)the sustainability of the Company’s
businesses and performance, and directors
must at all times act objectively in the best
interests of the Company.
This report sets out an overview of our
corporate governance practices and adheres
to the principles of the Code of Corporate
Governance 2018 (the “2018 CG Code”),
with(cid:632)references to the accompanying
Practice Guidance.
BOARD’S CONDUCT OF AFFAIRS
PRINCIPLE 1:
The Company is headed by an effective
Board which is collectively responsible and
works with Management for the long-term
success of the Company.
PRINCIPLE 3:
There is a clear division of responsibilities
between the leadership of the Board
and Management, and no one individual has
unfettered powers of decision making.
Mr Danny Teoh is the Chairman of
the(cid:632)Company. He was appointed as a
non-executive and independent Chairman
with effect from 23 April 2021 and was
re-designated as non-executive and
non-independent Chairman with effect
from(cid:632)1 January 2022 in view of him having
served for more than 9 years on the
Board(cid:632)pursuant to Rule 210(5)(d)(iii) of
the(cid:632)SGX Listing Manual (“9-Year Rule”)1.
The Chairman, with the assistance of the
Company Secretaries, schedules meetings
and prepares meeting agenda to enable
the(cid:632)Board to perform its duties responsibly,
having regard to the flow of the Company’s
operations. He further sets guidelines on
and monitors the flow of information from
management to the Board to ensure that all
material information is provided in a timely
manner to the Board for the Board to
make(cid:632)good decisions. He also encourages
constructive relations between the Board and
management, and between the executive
and non-executive directors (“NEDs”). At board
meetings, the Chairman encourages a full
and frank exchange of views, drawing out
contributions from all directors so that the
debate benefits from the full diversity of
views, in a robust yet collegiate setting.
At(cid:632)general meetings, the Chairman ensures
constructive dialogue between shareholders,
the Board and management. The Chairman
sets the right ethical and behavioural tone
KCL’s governance structure is as follows:
GOVERNANCE FRAMEWORK 2021
Board Risk
Committee
Board Safety
Committee
CHAIRMAN
BOARD
CHIEF EXECUTIVE
OFFICER
Corporate
Functions
IMPAC
Internal
Audit
Audit
Committee
Nominating
Committee
Remuneration
Committee
Management
Development
Committee
Central Finance
Committee
Management
Committees
Group Regulatory
Compliance
Management
Committee
IT Steering
Committee
Group Regulatory
Compliance
Working Team
Group
Sustainability
Steering Committee
Technology and
Data Risk Committee
Cyber Security
Steering Committee
Group Business
Continuity
Management
Steering Committee
Group Business
Continuity
Management Working
Committee
Transformation
Office
and takes a leading role in the Company’s
drive to achieve and maintain a high
standard of corporate governance with
the(cid:632)full support of the directors, Company
Secretaries and management.
Mr Till Vestring is the Lead Independent
Director of the Company. He was appointed
Lead Independent Director with effect
from(cid:632)1 November 2021 in view of Mr Teoh’s
re-designation. As Lead Independent Director,
Mr Vestring supports the Chairman and
the(cid:632)Board to ensure effective corporate
governance in managing the affairs of the
and the Company, provides leadership in
situations where the Chairman is conflicted
and facilitates communication between
the(cid:632)Board and shareholders or(cid:632)other
stakeholders of the Company as(cid:632)necessary.
He is also available to shareholders and
other stakeholders of the(cid:632)Company
where(cid:632)they have concerns and for
which(cid:632)their previous contact through
the(cid:632)normal channel of the Chairman
and(cid:632)management has failed to resolve
the(cid:632)matter or has been inadequate or
inappropriate. He is also the Chairman
of(cid:632)Remuneration Committee and a member
of Nominating Committee (“NC”).
To assist the Board in the discharge
of(cid:632)its(cid:632)oversight function, various board
committees, namely the Audit, Board Risk,
Nominating, Remuneration, and Board
Safety Committees, have been constituted
with clear written terms of reference.
All(cid:632)the(cid:632)board committees are actively
engaged and play an important role in
ensuring good corporate governance
in(cid:632)the(cid:632)Company and within the Group,
1 The SGX Listing Manual provides that, with effect from 1 January 2022, a director will not be independent if he has been a director for an aggregate period of more than
9(cid:632)years and his continued appointment as an independent director has not been sought and approved in separate resolutions by (A) all shareholders; and (B) shareholders,
excluding the directors and the chief executive officer of the issuer, and associates of such directors and chief executive officer.
Keppel Corporation Limited
and(cid:632)the Board is kept updated on discussions
of the committees via circulation of minutes
and regular updates by the respective
chairmen of the committees at board meetings.
The terms of reference are reviewed
on(cid:632)an(cid:632)annual basis, along with the board
committees’ structures and membership,
to(cid:632)ensure their continued relevance and
effectiveness. The composition and terms
of reference of the respective board
committees setting out their responsibilities
and authority are in Appendix 1.
Mr Loh Chin Hua is the Chief Executive
Officer (“CEO”) of the Company. He, assisted
by the management team, makes strategic
proposals to the Board and after robust and
constructive board discussion, executes
the(cid:632)agreed strategy, manages and develops
the Group’s businesses and implements
the(cid:632)Board’s decisions. He is supported by
management committees that direct and
guide management on operational policies
and activities, which include:
1.
Investments & Major Projects Action
Committee (“IMPAC”), which guides the
Group in exercising a spirit of enterprise
as well as prudence to earn optimal risk
adjusted returns on invested capital for
its chosen lines of business, taking into
consideration the relevant risks in a
controlled manner;
2. Management Development Committee
(“MDC”), which nominates candidates
as(cid:632)nominee directors to the boards of
each unlisted company or entity that
the(cid:632)Company is invested in (“Investee
Company”) so as to safeguard the
Company’s investment. In respect of
Investee Companies that are (a) listed
on a stock exchange, (b) managers or
trustee managers of any collective
investment schemes, business trusts
or(cid:632)any other trusts which are listed
on(cid:632)a(cid:632)stock exchange, or (c) parent
companies of the Company’s
core(cid:632)businesses, the(cid:632)Committee
recommends the candidates for the
approval of the NC. The MDC also
provides inputs, guidance and direction
on operational policies and human
resources/organisational matters;
3. Central Finance Committee, which
reviews, guides and monitors financial
policies and activities of Group companies;
4. Group Regulatory Compliance Management
Committee (“Group RCMC”), which
articulates the Group’s commitment
to(cid:632)regulatory compliance, directs
and(cid:632)supports the development of
overarching compliance policies
and(cid:632)guidelines, and facilitates the
implementation and sharing of policies
and procedures across the Group;
5. Group Regulatory Compliance Working
Team (“Group RCWT”), which supports
the Group RCMC and oversees the
development and review of overarching
compliance policies and guidelines for
the Group, as well as reviews training
and communication programmes;
6. Keppel IT Steering Committee, which
provides strategic information technology
(“IT”) leadership and ensures IT strategy
alignment in achieving business strategies;
7. Group Sustainability Steering Committee,
which sets sustainability strategy and
leads performance in key focus areas;
8. Technology and Data Risk Committee,
which operationalises the Technology
and Data Risk Management operating
standards programme that enhances
the Group’s safeguards, resilience and
responses to cyber threats;
9. Cyber Security Steering Committee
which guides the Group’s overall cyber
security vision and strategy and provides
oversight on cyber security risks and
initiatives to safeguard information
assets and interests across the Group;
10. Group Business Continuity Management
Steering Committee (“Group BCM SC”),
which guides the effective development
and implementation of a robust business
continuity plan and ensures continuous
improvement to enhance the Group’s
operational readiness through the review
of Business Continuity Management
(“BCM”) plans and exercises.
11. Group Business Continuity Management
Working Committee (“Group BCM WC”),
which supports the Group BCM SC and
coordinates with respective business
units and department BCM Coordinators
in developing detailed plans in the
prevention, preparedness, response,
continuity, and recovery of critical
business functions; and
12. Transformation Office, which was
established to drive the implementation
of the Group’s Vision 2030, to develop the
strategic roadmap of the transformation
into an integrated business providing
solutions for sustainable urbanisation,
and to coordinate the set of projects
and(cid:632)initiatives across the Group.
77
Annual Report 2021
GOVERNANCE
78
CORPORATE GOVERNANCE
BOARD MATTERS
Each Board member has equal
responsibility(cid:632)to oversee the business
and(cid:632)affairs of the Company. Management
on the other hand is responsible for the
day-to-day operation and administration
of(cid:632)the Company in accordance with
the(cid:632)policies and strategy set by
the Board.
In FY 2021, the Board approved changes
to(cid:632)the composition of the boards of major
business units, taking into account that,
as(cid:632)the Group executes Vision 2030,
agility(cid:632)and speed of execution while
maintaining appropriate level of oversight
is(cid:632)crucial. Each major business unit’s
board(cid:632)now comprises at least five directors,
including the CEO and CFO of the Company,
the CEO of the business unit, one or two
next generation leaders of the Group and
one independent director of the Company.
This allows for more efficient and
coordinated decision making by reducing
the layers of reporting and approvals,
while(cid:632)enabling the Board to maintain
appropriate oversight through the
independent director on the business unit’s
board and the adoption of a risk-based
approach for escalation of material or
significant matters, leveraging the existing
risk management framework for high risk
matters to be reported at the Company’s
board committees’ meetings, and where
applicable, board meetings. The appointment
of next generation leaders as directors of
major business units is part of succession
planning and to provide them with greater
exposure. Matters discussed at the
quarterly(cid:632)board meetings of the business
units include safety, risk and compliance,
audit,(cid:632)controls, financial-related matters,
and(cid:632)business and operations.
The Company has also adopted
internal(cid:632)guidelines setting forth matters
that(cid:632)require board approval. Material
items(cid:632)that require board approval
include(cid:632)strategic directions, annual
budget,(cid:632)financial results and dividend
declaration. Further, all transactions
exceeding $150 million by any Group
company (not separately listed) require
the(cid:632)approval of the Board. For transactions
between $30 million and $150 million,
IMPAC will determine if Board approval
is(cid:632)required, depending on the individual
considerations for each case.
Role: The principal functions of the
Board(cid:632)are to:
•
•
•
•
•
•
provide entrepreneurial leadership
and(cid:632)decide on matters in relation to
the(cid:632)Group activities which are of a
significant nature, including decisions on
strategic directions and guidelines and
the approval of periodic plans and major
investments and divestments;
oversee the business and affairs of the
Company, establish, with management,
the strategies and financial objectives
to(cid:632)be implemented by management
(including appropriate focus on value
creation, innovation and sustainability),
monitor the performance of
management and ensure that the
Company has the necessary resources
to meet its strategic objectives;
set the Company’s values, standards
(including ethical standards),
appropriate tone from the top and
desired organisational culture, and put in
place policies, structures and mechanism
to ensure such values, standards and
culture are complied with;
constructively challenge management
and hold them accountable for
performance and ensure proper
accountability within the Group;
oversee processes for evaluating the
adequacy and effectiveness of internal
controls, risk management, financial
reporting and compliance, and satisfy
itself as to the adequacy and
effectiveness of such processes;
be responsible for the governance of
risk and ensure that management
maintains a sound system of risk
management and internal controls, to
effectively monitor and manage risks so
as to safeguard the interests of the
Company and its stakeholders, and
achieve an appropriate balance between
risks and company performance; and
•
assume responsibility for corporate
governance and, ensure transparency and
accountability to key stakeholder groups.
Independent Judgment: All directors are
expected to exercise independent judgment
in the best interests of the Company. Based
on the result of the peer assessment carried
out by the directors for FY 2021, all directors
have discharged this duty well.
Conflicts of Interest: Each director must
promptly disclose conflicts of interest,
whether direct or indirect, in relation to any
transaction or proposed transaction. In this
connection, the Company has in place a
“Keppel Group – Directors’ Conflict of
Interest Policy” to guide directors in identifying,
disclosing and managing situations of actual
or potential conflicts, as well as situations
which may be perceived to be conflicts
of(cid:632)interest. Every director is required to
promptly disclose any conflict of interest,
whether direct or indirect, in relation to a
transaction or proposed transaction with
the(cid:632)Company as soon as is practicable after
the relevant facts have come to his/her
knowledge, and recuse himself/herself when
the conflict-related matter is discussed
unless the Board is of the opinion that his/
her presence and participation is necessary
to enhance the efficacy of such discussion,
and abstain from voting in relation to
conflict-related matters. On an annual basis,
each director is also required to submit details
of his/her associates for the purpose of
monitoring interested persons transactions.
Board Strategic Review: The Board
periodically reviews and approves the
Group’s strategic plans. A two-day off-site
Board strategy meeting is organised
annually for in-depth discussions
on(cid:632)the(cid:632)Group’s strategy. The offsite,
which(cid:632)includes directors as well as senior
management, includes a review of the
progress made, deep-dive discussions
on(cid:632)key strategic issues, and alignment
on(cid:632)the strategic direction going forward.
It(cid:632)also provides a good platform for NEDs
to(cid:632)further(cid:632)build their understanding of the
Group and its businesses.
For FY 2021, the focus of the strategy
meeting was on the progress and execution
of Vision 2030, including an in-depth
review(cid:632)of each of the four business
segments (Energy & Environment, Urban
Development, Connectivity and Asset
Management) and the related key projects;
a(cid:632)review of the Group’s Sustainability,
Technology/Digital, and People roadmap,
and alignment on key priorities to deliver
Vision 2030.
Keppel Corporation Limited
Meetings: The Board meets six times a year and as warranted by particular circumstances. Board meetings are scheduled, and the schedule
is circulated to the directors prior to the start of the financial year to allow directors to plan ahead to attend such meetings, so as to maximise
participation. Telephonic attendance and conference via audio-visual communication at board meetings are allowed under the Company’s
constitution (“Constitution”). The attendance of each Board member at the annual general meeting (“AGM”) and the board and board committee
meetings held in FY 2021, are disclosed in the table below:
79
ATTENDANCE
Lee Boon Yang1
Loh Chin Hua
Alvin Yeo Khirn Hai2
Tan Ek Kia3
Danny Teoh4
Till Vestring
Veronica Eng
Jean–François Manzoni5
Teo Siong Seng6
Tham Sai Choy7
Penny Goh
Shirish Apte8
No. of Meetings Held
2021 Annual
General
Meeting
Extraordinary
General
Meeting
1
1
1
1
1
1
1
1
1
1
1
–
1
–
1
–
–
1
1
1
–
1
1
1
1
1
Board
Meetings
6 out of 6
13
13
13
13
12
12
13
13
6 out of 6
3 out of 3
3 out of 3
5 out of 6
3 out of 3
–
3 out of 3
3 out of 3
Board Committee Meetings
Audit
Nominating
Remuneration
Safety
Risk
3 out of 3
3 out of 3
2 out of 2
–
–
–
5
–
–
5
5
–
–
–
7
7
–
4 out of 4
3 out of 3
–
–
–
7
4
–
–
–
–
2 out of 2
2 out of 2
2 out of 2
–
–
–
4
–
–
–
4
–
–
4
2 out of 2
–
4
4
2 out of 2
4
–
6
–
6
–
–
–
–
6
6 out of 6
2 out of 2
13
5
Notes:
1 Dr Lee Boon Yang ceased to be non-executive and independent Chairman with effect from 23 April 2021, and concurrently ceased to be a member of the Nominating
Committee, Remuneration Committee and Board Safety Committee.
2 Mr Alvin Yeo Khirn Hai ceased to be a non-executive and independent Director with effect from 23 April 2021, and concurrently ceased to be a member of the Audit
Committee and Nominating Committee.
3 Mr Tan Ek Kia ceased to be a non-executive and independent Director with effect from 23 April 2021, and concurrently ceased to be the Chairman of the Board Safety
Committee and a member of Board Risk Committee and Audit Committee.
4 Mr Danny Teoh was appointed as a member of the Nominating Committee and Board Safety Committee with effect from 23 April 2021, and concurrently ceased to be the
Chairman of the Audit Committee and member of the Board Risk Committee.
5 Prof Jean-François Manzoni was appointed as a member of the Remuneration Committee with effect from 1 July 2021, and concurrently ceased to be a member of the
Board Risk Committee.
6 Mr Teo Siong Seng was appointed as the Chairman of the Board Safety Committee and a member of the Audit Committee with effect from 23 April 2021. Mr Teo ceased to
be a member of the Audit Committee and the Remuneration Committee with effect from 1 July 2021.
7 Mr Tham Sai Choy was appointed as the Chairman of the Audit Committee with effect from 23 April 2021.
8 Mr Shirish Apte was appointed as a member of the Audit Committee and Board Risk Committee with effect from 1 July 2021.
If a director were unable to attend a board
or(cid:632)board committee meeting, he/she
would(cid:632)still receive all the papers and
materials for discussion at that meeting.
He/she would review them and advise
the(cid:632)Chairman or board committee chairman
of his/her views and comments on the
matters to be discussed so that they
may(cid:632)be(cid:632)conveyed to other members at
the meeting.
Non-executive Directors’ Meetings:
The NEDs meet on a(cid:632)need-be basis at the
end of each scheduled quarterly meeting
without the(cid:632)presence of management to
discuss matters such as board processes,
risk(cid:632)and(cid:632)compliance matters, succession
planning and leadership development,
and(cid:632)performance management and
remuneration matters. Any relevant
feedback would be shared and discussed
with the executive director.
Independent Directors’ Meetings:
The independent directors meet on a
need-be(cid:632)basis after the NEDs’ meetings
at(cid:632)the end of each scheduled quarterly
meeting. Such meetings(cid:632)are chaired by
the(cid:632)Lead Independent Director, without
the(cid:632)presence(cid:632)of the Chairman and CEO.
Any(cid:632)relevant feedback would be shared
and(cid:632)discussed with the Chairman.
Company Secretaries: The Company
Secretaries administer, attend and prepare
minutes of board proceedings. They assist
the Chairman to ensure that board
procedures (including but not limited to
assisting the Chairman to ensure timely
and(cid:632)good information flow to(cid:632)the Board
and(cid:632)board committees, and between senior
management and the NEDs, 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
Constitution and(cid:632)relevant rules and
regulations, including(cid:632)requirements of
the(cid:632)Companies Act, Securities & Futures Act
Annual Report 2021
GOVERNANCE
80
CORPORATE GOVERNANCE
and Listing Manual of the Singapore
Exchange Securities Trading Limited (“SGX”)
are complied with. They also assist the
Chairman and the Board to implement
and(cid:632)strengthen corporate governance
practices and processes with a view to
enhancing long-term shareholder value.
They are also the primary channel of
communication between the Company
and(cid:632)the SGX.
The appointment and removal of the
Company Secretaries are subject to the
approval of the Board.
Access to Information: The Board
and(cid:632)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 must be kept
well(cid:632)informed of the Company’s businesses
and affairs and be knowledgeable about
the(cid:632)industry in which the businesses
operate. The Company has therefore
adopted initiatives to put in place processes
to ensure that the NEDs are well supported
by accurate, complete and timely
information, have unrestricted access
to(cid:632)management and the Company
Secretaries, and have sufficient time and
resources to discharge their oversight
function effectively. Subject to the approval
of the Chairman, the directors, whether
as(cid:632)a(cid:632)group or individually, may seek and
obtain independent professional advice to
assist them in their duties, at the expense
of(cid:632)the Company.
As a general rule, board papers are required
to be distributed to the 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. Directors are
provided with tablet devices to facilitate
their access to and review of board
materials. However, sensitive matters
may(cid:632)be tabled at the meeting itself and
discussed. Managers who can provide
additional insights into the matters at hand
would be present at the relevant time during
the board meeting. The directors are also
provided with the names and contact details
of the Company’s senior management
and(cid:632)the Company Secretaries to facilitate
direct access.
Regular informal meetings are held
for(cid:632)management to brief the directors
on(cid:632)prospective deals and potential
developments at an early stage before
formal board approval is sought, and
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(cid:632)operates is circulated to the directors
from(cid:632)time to time. Management is also
expected to provide the Board with accurate
information in a timely manner concerning
the Company’s progress or shortcomings
in(cid:632)meeting its strategic business objectives
or financial targets and other information
relevant to the strategic issues facing
the(cid:632)Company. In this aspect, the Board is
regularly updated on new projects and the
progress of the execution of Vision 2030.
The Board also reviews the budget on an
annual basis, and any material variance
between the projections and actual
results(cid:632)would be disclosed and explained.
Management also provides the Board
members with management accounts on
a(cid:632)monthly basis and as the Board may
require from time to time, to keep the Board
informed, on a balanced and understandable
basis, of the Group’s performance, financial
position and prospects.
Orientation: A formal letter is sent to
newly-appointed directors upon their
appointment explaining their roles, duties,
obligations and responsibilities as a board
director. All newly-appointed directors
receive a director tool-kit and undergo a
comprehensive orientation programme
which includes site visits and management
presentations on the Group’s businesses,
strategic plans and objectives.
Training: Directors are provided with
continuing education in areas such as
directors’ duties and responsibilities,
corporate governance, changes in
financial(cid:632)reporting standards, changes
in(cid:632)the(cid:632)Companies Act, continuing listing
obligations and industry-related matters,
so(cid:632)as to update and refresh them on
matters(cid:632)that may affect or enhance their
performance as board or board committee
members. Site visits are also conducted
periodically for directors to familiarise
them(cid:632)with the operations of the
various(cid:632)businesses so as to enhance
their(cid:632)performance as board or board
committee members. All induction,
training and development costs are at the
Company’s expense.
In FY 2021, some KCL directors attended
talks on topics relating to challenges
presented by the disruption of the COVID-19,
clean energy, sustainability, the renewables
industry, US-China relations, digital and
innovation economy, technology foresight,
cyber security, China’s business environment,
risk management, board diversity,
governance and macroeconomic trends.
E-training was also conducted on the
Group’s policies on anti-bribery, conflict
of(cid:632)interest, health, safety & environment,
whistle-blowing, sanction, insider trading,
and cyber security. Each director is also
invited to participate in the annual Keppel
Technology Advisory Panel conference.
Over(cid:632)30 distinguished speakers from across
sectors, including academia and startups,
presented on a wide range of(cid:632)topics at the
2021 conference, which focused on the
latest technology and innovation topics
relevant to Keppel’s Vision(cid:632)2030 growth
areas. These included blue and green energy
molecules for Singapore, renewables and
energy storage, carbon capture, utilisation
and storage, data(cid:632)centre innovations,
as(cid:632)well(cid:632)as the use(cid:632)of blockchain in real
estate and asset management, among
other(cid:632)areas.
The NC also conducted a review of
the(cid:632)directors’ training and professional
development programme, taking into account
feedback from the board evaluation exercise
and individual feedback from each director
on his or her specific areas of interests. Such
areas included evolving geopolitics landscape,
sustainability, digital economy, and disruptive
technologies, among others. The feedback
from the review will be incorporated into
tailored training programmes.
BOARD COMPOSITION AND
SUCCESSION PLANNING
PRINCIPLE 2:
The Board has an appropriate level of
independence and diversity of thought
and background in its composition to enable
it to make decisions in the best interests
of the Company.
PRINCIPLE 4:
The Board has a formal and transparent
process for the appointment and re-appointment
of directors, taking into account the need for
progressive renewal of the Board.
Keppel Corporation Limited
81
NOMINATING COMMITTEE
The NC comprises entirely NEDs,
the(cid:632)majority of whom (including the
Chairman) are independent, namely:
• Prof Jean-François Manzoni
Independent Chairman
• Dr Lee Boon Yang
(up to 23 April 2021)
Independent Member
• Mr Danny Teoh
(from 23 April 2021)
Independent Member (re-designated as
a non-executive and non-independent
member with effect from 1 January 2022)
• Mr Alvin Yeo
(up to 23 April 2021)
Independent Member
• Mr Till Vestring
Independent Member (appointed as
Lead Independent Director with effect
from 1 November 2021)
The NC is responsible for making
recommendations to the Board on board
appointments, overseeing the Board and senior
management’s succession and leadership
development plans and conducting annual
review of board diversity, board size, board
independence, and directors’ commitments.
The detailed terms of reference of this
Committee are disclosed on page 101 herein.
BOARD SUCCESSION PLANNING
The Board believes that orderly succession
and renewal are achieved as a result of
careful planning, where the appropriate
composition of the Board is continually
under review. In this regard, the Board has
put in place a formal process for the renewal
of the Board and the selection of new
directors so that the experience of longer
serving directors can be drawn upon while
tapping into the new external perspectives
and insights which more recent appointees
bring to the Board’s deliberation. The NC leads
the process and makes recommendation
to(cid:632)the Board on the appointment of new
director and re-nomination of directors.
ANNUAL REVIEW OF BOARD DIVERSITY
The Company recognises that diversity in
relation to composition of the Board provides
a range of perspectives, insights and challenge
needed to support good decision making for
the benefit of the Group, and is committed
to ensuring that the Board comprises directors
who, as a group, provide an appropriate balance
and mix of skills, knowledge, experience, and
Process for appointment of new directors
Process for re-nomination of retiring Directors
a. NC reviews annually the balance and mix of skills,
a. Pursuant to the Constitution, one-third
knowledge, experience, and other aspects of diversity
such as gender and age, and the size of the Board
which would facilitate decision making. In this review,
the NC would also take into account the needs of the
Group, the collective skills and competencies of the
Board and service tenure spread of the directors.
of the directors shall retire from office at
the Company’s AGM every year, and a
director appointed after the last AGM
shall only hold office until the next
AGM. If eligible, these directors may
submit themselves for re-election.
b. In the light of such review and in consultation
b. NC reviews each director’s eligibility,
with management, the NC assesses if there is any
inadequate representation in respect of any of those
attributes and if so, determines the role and the
desirable competencies for a particular appointment.
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/her peers and his/her tenure.
c. The NC will in all cases take into consideration the
following objective criteria identified as necessary
for the Board and board committees to be effective:
c. NC makes recommendations to the
Board for approval.
i. Integrity
ii. Independent mindedness
iii. Able to commit time and effort to carry out duties
and responsibilities effectively
iv. Track record of making good decisions
v. Experience in high-performing companies
vi. Financial literacy
d. External help (for example, Singapore Institute of
Directors and search consultants) may be used to
source for potential candidates if need be. Directors
and management may also make recommendations.
e. NC meets with the short-listed candidate(s) to
assess suitability and to ensure that the candidate(s)
is/are aware of the expectations and the level of
commitment required.
f. NC makes recommendations to the Board for approval.
other aspects of diversity (such as gender
and age) so as to promote the inclusion
of(cid:632)different perspectives and ideas, mitigate
against groupthink and ensure that the
Company has the opportunity to benefit
from all available talent. The final decision
on(cid:632)the appointment of directors would
be(cid:632)based on the objective criteria set
by(cid:632)the(cid:632)Board from time to time on the
recommendation of the NC after having
regards to the benefits of diversity and
the(cid:632)needs of the Board.
The Company has in place a Board Diversity
Policy that sets out the framework and
approach for the Board to set its qualitative
and measurable quantitative objectives for
achieving diversity, and to annually assess
the progress in achieving these objectives.
The annual assessment is led by the NC as
part of the process for appointment of new
directors and Board succession planning.
To(cid:632)help the NC identify gaps (if any) in skills,
knowledge, experience and other aspects
of(cid:632)diversity in the board composition in any
given year of assessment, each member
of(cid:632)the Board is required to complete a
Board(cid:632)and Skills Diversity Matrix to indicate
which of the list of skills, talents, knowledge,
experience and other aspects of diversity
(identified by the NC, and set out in the
Board and Skills Diversity Matrix, as being
able to contribute to the Company’s strategy
and business) the Board member possesses.
The returns from the Board members
are(cid:632)then consolidated into a single Board
and Skills Diversity Matrix to highlight the
Board’s current mix of skills, knowledge,
experience and other aspects of diversity
and gaps therein if any.
The Board will, taking into consideration
the(cid:632)recommendations of the NC, review
and(cid:632)agree annually the qualitative and
measurable quantitative objectives for
achieving diversity on the Board.
Annual Report 2021
GOVERNANCE
82
CORPORATE GOVERNANCE
Achievement of Qualitative and measurable Quantitative Objectives identified under Board Diversity Policy for the period of FY 2019 to FY 2021
The objectives identified in FY 2019 to be fulfilled by the end of FY 2021, and the achievement of such objectives at the end of FY 2021, are set
out below:
Objectives
Progress
Appoint at least two additional independent
directors with some of the core competencies
already present on the Board, by end-FY 2020
for succession planning purposes.
Mr Tham Sai Choy was appointed as a non-executive and independent director with effect from
1 November 2019. Mr Tham was Managing Partner of KPMG, and was appointed with a view of being
the successor to Mr Danny Teoh in the roles of Audit Committee Chairman and Board Risk Committee
member. Mr Tham was appointed Audit Committee Chairman on 23 April 2021 and member of the
Board Risk Committee on 1 February 2020.
Mrs Penny Goh was appointed as a non-executive and independent director with effect from
2 January 2020. Mrs Goh was Co-Chairman and Senior Partner of Allen & Gledhill LLP, where she had,
for many years, headed the firm’s corporate real estate practice. Mrs Goh was appointed with a view to
succeeding Mr Alvin Yeo as a Board member with legal expertise and to enhance the gender diversity
of the Board. Mrs Goh also succeeded Mr Alvin Yeo as a member of Audit Committee on 1 February 2020.
Mr Teo Siong Seng was appointed as a non-executive and independent director with effect from
1 November 2019 (and subsequently re-designated as non-executive and non-independent director
with effect from 3 February 2021).
His strong background, knowledge and experience in the China market, experience in growing
businesses in frontier countries such as East and West Africa, and his knowledge and experience
from serving as Chairman of the Singapore Business Federation, Honorary President of the Singapore
Chinese Chamber of Commerce & Industry and as director of Business China, have enhanced the
balance and breadth of skills of the Board and help drive the Group’s strategy.
The female representation on the Board is currently 22%.
Broaden the skillset of directors on the Board
by appointing at least one director with the
relevant expertise and experience that would
complement those already on the Board and
which would help drive the Group’s strategy.
Improve gender diversity over a 3-year period
by ensuring that at least 20% of the Board
will comprise female directors by the end
of FY 2021.
Objectives identified by the NC in January 2021, and reviewed in January 2022, for the period up to FY 2024
The objectives identified by the NC in FY 2021, and reviewed in January 2022, and the progress towards achieving such objectives as at
11 March 2022, are set out below:
Objectives
Progress
Size: Appoint at least three to four additional
independent directors by end-FY 2023, with
relevant expertise and experience that would
complement those already on the Board, and
which would help drive the Group’s Vision 2030
strategy, and for succession planning.
Mr Shirish Apte was appointed as an independent director to the Board with effect from 1 July 2021.
Mr Apte is currently the non-executive Chairman of Pierfront Mezzanine Capital (Singapore) and
Fullerton India Credit Company Limited. Prior to his retirement in 2014, Mr Apte had built up 32 years
of financial services experience, holding various senior roles within Citigroup, including Chairman of
Asia Pacific Banking, Regional CEO of Asia Pacific, Regional CEO of Europe, Middle East & Africa, and
Country Head of Citibank Poland. His responsibilities included corporate banking, investment banking
and risk management.
The NC was of the view that the Board would benefit from Mr Apte’s expertise and experience on
several fronts, including his ability to analyse organisational strategies, expertise in deal making and
risk analysis, international experience and knowledge of, and experience and network in, India.
Age and Gender: Improve age and gender
diversity over a 3-year period by appointing
at least one younger director (50 years old
or below) and one female director by the
end of FY 2024.
Skills and Experience: Improve skills and
experience diversity by appointing directors with
oversight and operational experience in driving
(i) sustainability-as-a-business, (ii) digitalisation
as a corporate strategy, (iii) private equity/asset
management and/or (iv) infrastructure
–
–
Keppel Corporation Limited
83
OTHER ASPECTS OF DIVERSITY
GENDER (%)
The above objectives were approved by the
Board, at the recommendation of the NC,
following a review of the skills, knowledge,
talents, experience and other aspects of
diversity that had been identified to help
drive the Group’s Vision 2030 strategy and
for succession planning purposes.
Vision 2030 is the Group’s long-term roadmap
to guide its transformation and growth as one
integrated company, providing solutions for
sustainable urbanisation, with sustainability
at the core of the Company’s strategy.
Under(cid:632)this Vision, the Company aims to be
a(cid:632)powerhouse of(cid:632)sustainable urbanisation
solutions, leveraging the Company’s
track(cid:632)record and(cid:632)capabilities in Energy &
Environment, Urban(cid:632)Development and
Connectivity, with(cid:632)an Asset Management
arm to fund the(cid:632)Group’s growth, provide a
platform for capital recycling, and pull the
Group together to seize opportunities with
an asset-light business model.
With the Vision in mind and taking into
account feedback from Board members,
the NC had identified the skills, knowledge,
talents and experience that would help drive
the strategy and assessed them against the
current mix of skills, knowledge, talents and
experience of the Board. Following the review,
the NC was satisfied that the directors, as a
group, possess core competencies required
for the Board and the board committees to
be effective, taking into account the Company’s
strategy and business. However, with the
focus on sustainable urbanisation solutions,
being asset light, and technology under
Vision 2030, the NC was of the view that
the(cid:632)diversity on the Board could be further
enhanced with the appointment of directors
with oversight and operational experience
in(cid:632)driving (i) sustainability-as-a-business,
(ii)(cid:632)digitalisation as a corporate strategy,
(iii)(cid:632)private equity/asset management and/or
(iv) infrastructure.
Aside from skill diversity, the NC also
reviewed other aspects of diversity such as
gender, tenure, age, race/ethnicity and country
of origin/nationality/cultural background and
was satisfied that the Board and the board
committees comprise directors who as a
group provide an appropriate balance and
mix of skills, knowledge, talents, experience,
and other aspects of diversity. Nevertheless,
for succession planning and to further enhance
the diversity on the Board, the NC was of the
view that at least two to three more directors
with relevant expertise and experience that
would complement those already on the Board
should be appointed by end-FY 2023, and in
this respect, was committed to improve age
and gender diversity over a 3-year period.
Skills, Knowledge, Talents and Experience
• Finance/Accounting
• Risk Management
• Sustainability
• Digital/Technology
• Mergers & Acquisitions
• Corporate Finance
• Management
• Human Resource
• Legal
• Strategic planning experience
• Customer-based experience or knowledge
• Industry Knowledge – Energy & Environment
• Industry Knowledge – Urban Development
• Industry Knowledge – Connectivity
• Industry Knowledge – Asset Management
• International Perspective
• Regional Experience
Male
Female
Total
TENURE (%)
AGE (%)
1–4 years
5–9 years
Above 9 years
Total
55.6
33.3
11.1
100.0
55–60
61–65
66–70
Total
COUNTRY OF ORIGIN, NATIONALITY OR
CULTURAL BACKGROUND (%)
RACE OR ETHNICITY (%)
Singaporean
German
Canadian
British
Total
66.7
11.1
11.1
11.1
100.0
Chinese
Caucasian
Indian
Total
78.0
22.0
100.0
33.3
11.1
55.6
100.0
66.7
22.2
11.1
100.0
Annual Report 2021
GOVERNANCE
84
CORPORATE GOVERNANCE
RETIREMENTS AND RE-NOMINATION
For the upcoming AGM, Mr Teo Siong Seng,
Mr Tham Sai Choy and Mr Loh Chin Hua
will(cid:632)be retiring by rotation pursuant to
the(cid:632)Constitution, and being eligible, will be
seeking re-election at the upcoming AGM.
Mr Shirish Apte, having been appointed
after(cid:632)the AGM held in FY 2021 (“2021 AGM”),
will(cid:632)also be retiring at the upcoming AGM,
and being eligible, will also be seeking
re-election.
The NC has reviewed their eligibility,
contribution and performance, and taking
into account the results of their recent peer
assessment, are of the view that all three
directors have given sufficient time and
attention to the affairs of the Company
and(cid:632)have been able to discharge their
duties(cid:632)as directors effectively. The Board,
at(cid:632)the recommendation of NC, had
therefore(cid:632)approved the re-nomination of
Mr Teo Siong Seng, Mr Tham Sai Choy,
Mr Loh Chin Hua and Mr Shirish Apte at
the(cid:632)upcoming AGM.
SUCCESSION PLANNING FOR KEY
MANAGEMENT PERSONNEL
The NC reviews the succession plans for
key(cid:632)management personnel of the Group
bi-annually, taking into account the Group’s
long-term strategy and objectives, the
orderly succession of key management
personnel, and contingency planning for
preparedness against sudden and
unforeseen changes.
In November 2020, the Company announced
leadership changes at a few of its key
business units, as part of the Group’s
succession planning and leadership renewal.
The new generation leaders were part of the
team that formulated Keppel’s Vision 2030
and will lead the respective business units
as they collaborate in pursuit of the Group’s
common vision. The(cid:632)leadership changes
took effect from 15(cid:632)February 2021, with
the(cid:632)appointment of Mr Louis Lim as CEO
of(cid:632)Keppel Land, Ms Cindy Lim as CEO of
Keppel Infrastructure, Ms Bridget Lee
as(cid:632)Chief Operating Officer (COO) of
Keppel(cid:632)Capital, Mr Ben Lee as COO of
Keppel Land and Mr Chua Hsien Yang as
Director of Group Mergers & Acquisitions
of(cid:632)the Company.
In this respect, a Board Mentorship
framework was introduced in 2021 to
support the development of new generation
leaders. The objective was for Board
members to act as a sounding board and
provide seasoned counsel and feedback to
enable the new leadership to perform their
roles more effectively. A senior leadership
development programme was also put in
place as part of the Company’s continuing
efforts to widen the bench strength by
Keppel Corporation Limited
developing senior leaders both individually
and collectively as a group.
APPOINTMENT OF LEAD INDEPENDENT
DIRECTOR AND ANNUAL REVIEW OF
BOARD INDEPENDENCE
The NC determines on an annual basis
whether or not a director is independent. In
January 2022, the NC carried out the review
on the independence of each director based
on the respective directors’ self-declaration
in the Directors’ Independence Checklist and
their actual performance on the Board and
board committees, taking into account the
listing rules on the circumstances in which
a(cid:632)director will not be deemed independent
and guidance in the 2018 CG Code as to the
circumstances in which a director should
not be deemed independent.
In this connection, the NC noted that
Mr Danny Teoh had served more than nine
years on the Board, and pursuant to the 9-Year
Rule, had deemed him as non-independent
with effect from 1 January 2022. In anticipation
of Mr Danny Teoh becoming a non-independent
Chairman arising from the 9-Year Rule, the
NC ran a rigorous process for the appointment
of a Lead Independent Director. The NC
Chairman had individual discussions with
each of the independent directors on the
appointment of a Lead Independent Director,
and having considered among others, the
attributes and performance of each director,
the consensus was that Mr Till Vestring
should be appointed as Lead Independent
Director in view of his in-depth knowledge
of(cid:632)the Company and its business and
demonstration of leadership, independent
judgment and commitment to his role as
independent director. A charter setting out
the roles and responsibilities of the Lead
Independent Director was then prepared in
consultation with Mr Till Vestring, taking into
account the guidance set out in the SGX Listing
Manual. Thereafter, the NC recommended
the appointment and the charter for Board’s
approval, and Mr Till Vestring was appointed
as Lead Independent Director with effect
from 1 November 2021.
The NC further noted that Ms Veronica Eng
had declared that she was a member of the
Investment Committee of Temasek Trust,
which was established by Temasek Holdings
(Private) Limited (“Temasek”) (a controlling
shareholder of the Company) to provide
financial oversight and governance of
philanthropic endowments and gifts from
Temasek and other donors. NC noted
that(cid:632)Ms Veronica Eng did not hold any
executive or management role in Temasek
Trustee, which administered Temasek Trust,
and(cid:632)would recuse herself in the event of
a(cid:632)potential of conflict of interest. Taking
these factors into consideration, along
with(cid:632)her invaluable contributions on the
Board and board committees, and the
outcome of the recent peer Individual
Director Performance assessment, the NC
unanimously agreed(cid:632)that Ms Eng had at
all(cid:632)times exercised independent judgment
in(cid:632)the best interests of the Company in
the(cid:632)discharge of her director’s duties and
should therefore continue to be deemed
an(cid:632)independent director.
The NC also noted that Mr Teo Siong Seng
had declared that he was an Executive
Director of Pacific International Lines (Private)
Limited (“PIL”), which was majority owned
by Heliconia Capital Management Pte Ltd
(“Heliconia”), a subsidiary of Temasek.
Although all the NC members were
confident that Mr Teo would be able
to(cid:632)continue to exercise independent
judgment in the best interests of the
Company, market perception might be
different, and the NC was therefore of the
view that the prudent approach would be
to(cid:632)deem Mr Teo as non-executive and
non-independent director.
The NC noted that Mr Tham Sai Choy
had(cid:632)declared his directorship on DBS Group
Holdings and DBS Bank which provided
services to the Group. The NC considered
that such interests had already been
declared to the Board, and that Mr Tham
would abstain from voting whenever
there(cid:632)was potential conflict of interest.
The(cid:632)NC further considered that, as(cid:632)DBS
was(cid:632)a leading bank in Singapore and
Southeast Asia, it was not unexpected that
its services would be sought by the Group
from time to time. Taking these factors
into(cid:632)consideration, along with his invaluable
contributions to the Board and board
committees, and the outcome of the recent
peer Individual Director Performance
assessment, the NC unanimously agreed
that Mr Tham has at all times exercised
independent judgment in the best
interests(cid:632)of the Company in the discharge
of(cid:632)his director’s duties and should
therefore(cid:632)continue to be deemed an
independent director.
The NC noted that Mrs Penny Goh is a
Senior Advisor of Allen & Gledhill LLP (“A&G”)
which provided legal services to the Group.
She had declared that she did not hold a
partnership interest in A&G and was not
involved in the selection and appointment
of(cid:632)legal advisors of the Group and did not
regard the business relationship with A&G(cid:632)as
something that could affect her independent
judgment. The NC further considered that,
as A&G was one of the top law firms in
Singapore, it was not unexpected that
its(cid:632)services would be sought by the Group
from(cid:632)time to time. Taking these factors
into(cid:632)consideration, along with her invaluable
contributions to the Board and board
85
committees, and the outcome of the
recent(cid:632)peer Individual Director Performance
assessment, the NC unanimously
agreed(cid:632)that Mrs Goh has at all times
exercised independent judgment in the
best(cid:632)interests(cid:632)of the Company in the
discharge of(cid:632)her director’s duties and
should(cid:632)therefore(cid:632)continue to be deemed
an(cid:632)independent director.
Following the review, the NC was of the view
that Mr Till Vestring, Ms Veronica Eng, Prof
Jean-François Manzoni, Mr Tham Sai Choy,
Mrs Penny Goh and Mr Shirish Apte should
be deemed independent, while Mr Danny
Teoh and Mr Teo Siong Seng should be
deemed non-executive and non-independent
directors. The Board has reviewed the
basis(cid:632)of the NC’s recommendations
and(cid:632)concurred with the assessment of
independence in respect of the above-
mentioned directors.
In view of the above, the Board currently
comprises majority independent directors,
with a total of nine directors of whom six
are(cid:632)independent.
Taking into account the independence and
diversity of the Board, the NC is of the view
that the Board has an appropriate level of
independence and diversity of thought and
background in its composition to enable it
to(cid:632)make decisions in the best interests of
the Company. However, the NC also noted
the need for appointment of additional
directors with relevant expertise and
experience that would complement those
already on the Board and which would help
drive the Group’s Vision 2030 strategy,
and(cid:632)for succession planning.
ANNUAL REVIEW OF BOARD SIZE
The Board, in concurrence with the NC, was
of the view that a Board size of 11 directors
would be appropriate to facilitate effective
decision making, taking into account the
nature and scope of the operations of the
Company, the requirements of the Company’s
business and the need to avoid undue
disruptions from changes to the composition
of the Board and board committees. The NC
will continue to search for additional directors
to be appointed to enhance diversity and for
succession planning purposes. No individual
or small group of individuals dominate the
Board’s decision making.
ANNUAL REVIEW OF DIRECTORS’
COMMITMENTS
The NC assesses annually whether a
director with other listed company board
representations and/or other principal
commitments is able to and has been
adequately carrying out his/her duties as
a(cid:632)director of the Company. Instead of fixing
a maximum number of listed company
board representations and/or other principal
commitments that a director may have, the
NC assesses holistically whether a director
is able to and has been adequately carrying
out his/her duties as a director of the
Company, taking into account the results of
the assessment of the effectiveness of the
individual director, the level of commitment
required of the director’s listed company
board representations and/or other principal
commitments, and the director’s actual
conduct and participation on the Board and
board committees, including availability and
attendance at regular scheduled meetings
and ad hoc meetings. The NC is of the view
that such an assessment is sufficiently
robust to detect and address, on a timely
basis, any time commitment issues that may
hinder the effectiveness of the directors.
The NC conducted an assessment in January
2022 and is of the view that each director
has given sufficient time and attention to
the(cid:632)affairs of the Company and has been
able to discharge his/her duties as director
effectively. The NC noted that based on the
attendance of board and board committee
meetings during the year, the directors were
able to participate in at least a substantial
number of such meetings to carry out their
duties. The NC also noted that, based on
the(cid:632)recent individual director assessment
for(cid:632)FY 2021, all the directors performed well.
The NC was therefore satisfied that in FY 2021,
where a director had other listed company
board representations and/or other principal
commitments, the director was able and had
been adequately carrying out his/her duties
as director of the Company.
NOMINEE DIRECTOR POLICY
At the recommendation of the NC, the Board
approved the adoption of the KCL Nominee
Director Policy in January 2009. For the
purposes of the policy, a “Nominee Director”
is a person who, at the request of the Company,
acts as director (whether executive or
non-executive) on the board of another
company or entity (“Investee Company”)
to(cid:632)oversee and monitor the activities of the
relevant Investee Company so as to safeguard
the Company’s investment in the company.
The purpose of the policy is to highlight
certain obligations of a person while acting
in his/her capacity as a Nominee Director.
The policy also sets out the internal process
for the appointment and resignation of
a(cid:632)Nominee Director. The policy would be
reviewed and amended as required to
take(cid:632)into account current best practices
and(cid:632)changes in the law and stock
exchange requirements.
ALTERNATE DIRECTOR
The Company has no alternate directors
on(cid:632)the Board.
KEY INFORMATION REGARDING
DIRECTORS
The following key information regarding
directors is set out in the following pages of
this Annual Report:
Pages 34 to 37: Academic and professional
qualifications, board committees served on
(as a member or Chairman), date of first
appointment as director, date of last re-election
as director, directorships or chairmanships
both present and past held over the preceding
five years in other listed companies and other
major appointments, whether appointment
is executive or non-executive, whether
considered by the NC to be independent,
and(cid:632)details of their membership on board
committees; and
Page 119: Shareholding in the Company and
its subsidiaries.
BOARD PERFORMANCE
PRINCIPLE 5:
The Board undertakes a formal annual
assessment of its effectiveness as a whole,
and that of each of its board committees
and individual directors.
The Board has implemented formal processes
for assessing the effectiveness of the Board
as a whole, each of its board committees,
the contribution by the Chairman and peer
assessment of the individual directors to the
effectiveness of the Board. The evaluation
for FY 2021 was conducted by the NC. The
evaluation process is set out on page 103 of
this Annual Report.
Formal Process and Performance Criteria:
The evaluation processes and performance
criteria are disclosed in the Appendix 1 to
this report. The performance criteria were
similar to that adopted in the previous years.
Objectives and Benefits: The board
assessment exercise provides an opportunity
to obtain constructive feedback from each
director on whether the Board’s procedures
and processes allowed him/her to discharge
his/her duties effectively and the changes
which should be made to enhance the
effectiveness of the Board and/or board
committees. The assessment exercise
also(cid:632)helped the directors to focus on their
key responsibilities. The individual director
assessment exercise allows for peer
review(cid:632)with a view to raising the quality of
Board members. It also assisted the NC
in(cid:632)determining whether to re-nominate
directors who are due for retirement at
the(cid:632)next AGM, and in determining
whether(cid:632)directors with multiple board
representations were nevertheless able
to(cid:632)and had adequately discharged their
duties as directors of the Company.
Annual Report 2021
GOVERNANCE
86
CORPORATE GOVERNANCE
REMUNERATION REPORT
PRINCIPLE 6:
The Board has a formal and transparent
procedure for developing policies on director
and executive remuneration, and for fixing
the remuneration packages of individual
directors and key management personnel.
No director is involved in deciding his or her
own remuneration.
PRINCIPLE 7:
The level and structure of remuneration of
the Board and key management personnel
are appropriate and proportionate to the
sustained performance and value creation
of(cid:632)the Company, taking into account the
strategic objectives of the Company.
PRINCIPLE 8:
The Company is transparent on its
remuneration policies, level and mix of
remuneration, the procedure for setting
remuneration, and the relationships between
remuneration, performance and value creation.
REMUNERATION COMMITTEE
The Remuneration Committee (“RC”)
comprises entirely NEDs, the majority of
which (including the Chairman) are
independent, namely:
• Mr Till Vestring
Independent Chairman
• Dr Lee Boon Yang
(up to 23 April 2021)
Independent Member
• Mr Danny Teoh
Independent Member
(re-designated as a non-executive and
non-independent member with effect
from 1 January 2022)
• Mr Teo Siong Seng
(up to 1 July 2021)
Non-executive and
Non-independent Member
• Prof Jean-Francois Manzoni
(from 1 July 2021)
Independent Member
The RC is responsible for ensuring a formal
and transparent procedure for developing
policies on director and executive remuneration
and for determining the remuneration
packages of individual directors and senior
management. The RC assists the Board
to(cid:632)ensure that remuneration policies and
practices are sound in that they are able to
attract, retain and motivate without being
excessive, thereby maximising shareholder
value. The RC recommends to the Board, for
endorsement, a framework of remuneration
(which covers all aspects of remuneration
including directors’ fees, salaries, allowances,
bonuses, share-based incentives and
awards, benefits-in-kind and termination
Keppel Corporation Limited
payments) and the specific remuneration
packages for each director and the key
management personnel. The RC also reviews
the remuneration of senior management
and administers the KCL Restricted Share
Plan (the “KCL RSP”), the(cid:632)KCL Performance
Share Plan (the “KCL(cid:632)PSP”), the KCL
Restricted Share Plan 2020(cid:632)(the “KCL RSP
2020”) and the KCL Performance Share Plan
2020 (the “KCL PSP(cid:632)2020”). The KCL RSP
2020 and the KCL(cid:632)PSP 2020 (collectively
the(cid:632)“New Share Plans”) were approved by
shareholders at the AGM held on 2 June 2020.
In addition, the RC reviews the Company’s
obligations arising in the event of termination
of the executive directors’ and key management
personnel’s contract of service, to ensure
that such contracts of service contain fair
and reasonable termination clauses which
are not overly generous.
The detailed terms of reference of this
Committee are disclosed on page 102 herein.
Access to Expert Advice: The RC has
access to expert advice from external
remuneration consultants where required.
In(cid:632)FY 2021, the RC sought views from
external remuneration consultants,
Aon(cid:632)Hewitt and Willis Towers Watson, on
market practice and trends, and benchmarks
against comparable organisations. The RC
undertook a review of the independence
and(cid:632)objectivity of the external remuneration
consultants through discussions with the
external remuneration consultants and has
confirmed that the external remuneration
consultants had no relationships with
the(cid:632)Company which would affect their
independence and objectivity.
POLICY IN RESPECT OF NON-EXECUTIVE
DIRECTORS’ REMUNERATION
Each NED’s remuneration comprises
a(cid:632)basic(cid:632)fee and an additional fee for
services(cid:632)performed on board committees.
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 office. The directors’ fee structure is
regularly benchmarked with comparable
listed companies to ensure that their
remuneration is fair and appropriate.
The NEDs participated in additional ad hoc
meetings with management during the
year(cid:632)and are not paid for attending such
meetings. Executive directors are not paid
directors’ fees.
In FY 2021, the RC, in consultation with
Willis Towers Watson, conducted a review
of(cid:632)the NED fee structure. The review took
into account a variety of factors, including
prevailing market practices and referencing
the fees against comparable benchmarks,
as well as the roles and responsibilities
of(cid:632)the Board and board committees. The
revised directors’ fee structure, which will
take effect from FY 2022 onwards, is set out
in the table below. The Lead Independent
Director fee will also be applied to the
FY(cid:632)2021 NED fee structure on a pro-rated
basis given the appointment of the
Lead(cid:632)Independent Director with effect
from(cid:632)1 November 2021.
Shareholders’ approval for the payment of
directors’ fees will be sought at each AGM.
If(cid:632)approved, each of the NED (including the
Chairman) will receive 70% of his/her total
directors’ fees in cash (“Cash Component”)
and 30% in the form of shares in the
Company (“Remuneration Shares”)
(both(cid:632)amounts subject to adjustment as
described below). The Cash Component is
paid half-yearly in arrears. The Remuneration
Shares are paid after the next AGM has been
held. The actual number of Remuneration
Shares, to be purchased from the market
on(cid:632)the first trading day immediately after
DIRECTORS’ FEE STRUCTURE
Board Chairman
Board Member
Lead Independent Director
Audit Committee
Board Risk Committee
Remuneration Committee
Board Safety Committee
Nominating Committee
Basic Fee (per annum)
$750,000 (all-in)
$108,000
$22,000
Additional Fees for Membership
in Board Committees (per annum)
Chairman
$67,000
$67,000
$47,000
$47,000
$40,000
Member
$43,000
$38,000
$31,000
$31,000
$28,000
the(cid:632)date of the next AGM provided that it
does not fall within any applicable restricted
period of trading (“Trading Day”), for delivery
to the respective NEDs will be based on
the(cid:632)market price of the Company’s shares
on the SGX on the Trading Day. In the event
that the first trading day after the date
of(cid:632)the(cid:632)next AGM falls within a restricted
period(cid:632)of trading, the Remuneration Shares
will(cid:632)be(cid:632)purchased on the first trading day
immediately after the end of the restricted
period of trading. The actual number of
Remuneration Shares will be rounded down
to the nearest thousand and any residual
balance will be paid in cash. Such incorporation
of an equity component in the total
remuneration of the NEDs is intended to
align the interests of the NEDs with those
of(cid:632)the shareholders’ and the long-term
interests of the Company. A NED who
steps(cid:632)down before the payment of the
Remuneration Shares will receive all of
his/her directors’ fees for that year
(calculated on a pro-rated basis, where
applicable) in cash.
The aggregate directors’ fees for NEDs
for(cid:632)FY 2022 are subject to shareholders’
approval at the forthcoming AGM.
The(cid:632)amount of directors’ fees has been
computed taking into consideration the
number of board committee representations
by the NEDs and also caters for additional
fees (if any) which may be payable due to
the formation of additional board committees,
or additional Board or board Committee
members being appointed in the course
of(cid:632)FY 2022. In the event that the amount
proposed is insufficient, approval will be
sought at the next AGM before payments
are made to the NEDs for the shortfall
amount. The Chairman and the NEDs will
abstain from voting and will procure their
respective associates to abstain from
voting(cid:632)in respect of this resolution.
The RC is of the view that the remuneration
of NEDs is appropriate to their level of
contribution, taking into account factors such
as effort, time spent and responsibilities,
and(cid:632)to attract, retain and motivate the
directors to provide good stewardship of
the Company.
REMUNERATION POLICY IN RESPECT
OF EXECUTIVE DIRECTOR AND OTHER
KEY MANAGEMENT PERSONNEL
The Company advocates a performance-based
remuneration system that is highly flexible
and responsive to the external environment,
Company’s, business unit’s and individual
employee’s performance, and is aligned with
shareholders’ and other stakeholders’ interests.
The RC periodically reviews the Company’s
scorecard and remuneration structure to
ensure that it supports the Group’s vision
and long-term strategy. In designing the
remuneration structure, the RC seeks to
ensure that the level and mix of remuneration
is competitive, relevant and appropriate
in(cid:632)finding a balance between current versus
long-term remuneration, and between
cash(cid:632)versus equity incentive remuneration,
and appropriate to attract, retain and
motivate key management personnel to
successfully manage the Company for
the(cid:632)longer term.
The total remuneration structure reflects
the(cid:632)following four key objectives:
a. Shareholder Alignment: To incorporate
performance measures that are aligned
to shareholders’ interests;
b. Long-term Orientation: To motivate
employees to drive sustainable
long-term growth;
c. Simplicity: To ensure that the remuneration
structure is easy to understand and
communicate to stakeholders; and
d. Synergy: To facilitate talent mobility and
enhance collaboration across businesses.
The total remuneration structure comprises
three components; that is, annual fixed cash,
annual performance bonus and the KCL Share
Plans. The annual fixed cash component
comprises the annual basic salary plus any
other fixed allowances. The size of the
Company’s annual performance bonus pot
is determined by the Group’s financial and
non-financial performance and is distributed
to employees based on their individual
performance. For FY 2021, contingent
shares were awarded under the New Share
Plans. The KCL RSP 2020 and KCL PSP
2020 are long-term incentive plans which
vest over a longer term horizon. A portion
of(cid:632)the annual performance bonus is granted
in the form of deferred shares that are
awarded under the KCL RSP 2020. The KCL
PSP 2020 comprises performance targets
determined on an annual basis. Executives
who have a greater ability to influence Group
outcomes have a greater proportion of their
overall remuneration at risk. The Company
performs regular benchmarking reviews on
employees’ total remuneration to ensure
market competitiveness.
The RC exercises broad discretion and
independent judgment in ensuring that
the(cid:632)amount and mix of remuneration is
aligned with the interests of shareholders
and promotes the long-term success of
the(cid:632)Company. The mix of fixed and variable
reward is considered appropriate for the
Group and for each individual role.
87
Annual Report 2021
GOVERNANCE
88
CORPORATE GOVERNANCE
The remuneration structure is directly linked
to corporate and individual performance,
both in terms of financial and non-financial
performance. This link is achieved in the
following ways:
a. by placing a significant portion of
executives’ remuneration at risk
(“At Risk component”) and subject to
a(cid:632)vesting schedule;
b. by incorporating appropriate key
performance indicators (“KPIs”) for
awarding of annual performance bonus:
i. For FY 2021, there are four
scorecard areas that the Company
has identified as key to measuring
the performance of the Group –
(i) Financial; (ii) Vision 2030 Value
Creation and Transformation;
(iii) Process and Stakeholders;
and (iv) People. Some of the key
sub-targets within each of the
scorecard areas include key financial
indicators, sustainability, safety,
risk(cid:632)management, compliance and
controls, employee engagement,
talent development and
succession planning.
ENABLERS
People &
Stakeholders
OUTCOMES
Financial
Corporate
Scorecard
DRIVERS
Vision 2030
Value Creation &
Transformation
d. by requiring those conditions to be met
in order for the At Risk components of
remuneration to be awarded or
vested; and
e. by forfeiting the At Risk components of
remuneration when those conditions are
not met at a satisfactory level.
ii. For FY 2022, these four scorecard
areas have been further refined into
(i) Drivers – Vision 2030 Value
Creation and Transformation,
(ii) Outcomes – Financials, and (iii)
Enablers – People and Stakeholders
in the FY 2022 scorecard, which are
aligned with the Company’s FY 2022
strategic priorities cascaded down
from the Vision 2030 goals.
The RC also recognises the need for a
reasonable alignment between risk and
remuneration to discourage excessive
risk(cid:632)taking. Therefore, in determining the
remuneration structure, the RC takes into
account the risk policies and risk tolerance
of the Group as well as the time horizon of
risks, and incorporates risk-adjustments into
the remuneration structure through several
initiatives, including but not limited to:
iii. The scorecard areas have been
chosen because they support how
the Group achieves its strategic
objectives. The framework provides
a link for employees to understand
how they contribute to each area of
the scorecard, and therefore to the
Company’s overall strategic goals. This
is designed to achieve a consistent
approach and understanding across
the Group. The RC reviews and
approves the scorecard each year
and the annual performance bonus
is determined thereafter based on the
scorecard achievement. The annual
performance bonus comprises both
cash bonus and deferred shares
awards that vest equally over three
years, thereby aligning employees
with shareholders’ interests.
a. prudent funding of annual
performance bonus;
b. granting a portion of the annual
performance bonus in the form of
deferred shares, to be awarded under
the KCL RSP 2020;
c. vesting of contingent share awards
under the KCL PSP and KCL PSP 2020
being subject to performance conditions
being met;
d. potential forfeiture of variable incentives
in any year due to misconduct;
e.
requiring the executive director and
key(cid:632)management personnel to hold a
minimum number of shares under the
share ownership guideline; and
c. by selecting performance conditions for
the KCL PSP 2020 awards, namely Total
Shareholder Return, Return on Capital
Employed and Net Profit that are aligned
with shareholders’ interests;
f. exercising discretion to ensure that
remuneration decisions are aligned
to the Company’s long-term strategy
and performance and discourage
excessive risk taking.
Keppel Corporation Limited
The RC is of the view that the overall
level(cid:632)of(cid:632)remuneration is not considered
to(cid:632)be(cid:632)at a level which is likely to promote
behaviours contrary to the Group’s
risk profile.
In determining the actual quantum of
variable component of remuneration, the RC
had taken into account the extent to which
the corporate and individual performance
conditions, set forth above, have been met.
Based on the outcome of the evaluation,
the(cid:632)RC recommends the total remuneration
for the key management for the Board’s
approval. The RC is of the view that the
remuneration is aligned to performance
during FY 2021.
In order to align the interests of the
executive director and key management
personnel with that of shareholders,
the executive director and key management
personnel are remunerated partially in
the(cid:632)form of shares in the Company and
are(cid:632)encouraged to hold such shares
while(cid:632)they remain in the employment
of(cid:632)the(cid:632)Company. The executive director
and(cid:632)key management personnel are
required(cid:632)to hold at least 2 times of
their(cid:632)annual fixed pay in the form of
shares(cid:632)in the Company, while other
key(cid:632)senior management are required
to(cid:632)hold(cid:632)at least 1.5 times of their
annual(cid:632)fixed(cid:632)pay under the share
ownership(cid:632)guideline so as to maintain
a(cid:632)beneficial ownership stake in the
Company, thus further aligning their
interests with shareholders.
The directors, the CEO and the key
management personnel (who are not
directors or the CEO) are remunerated on an
earned basis and there are no termination,
retirement and post-employment benefits
that are granted over and above what has
been disclosed.
89
REMUNERATION STRUCTURE
VISION, MISSION, VISION 2030 STRATEGIES
Corporate Scorecard
Performance Bonus
Performance Shares
Cash Bonus
Deferred Shares
LONG-TERM INCENTIVE PLANS
KCL Share Plans
The KCL Share Plans are put in place to reward,
retain and motivate employees to achieve
superior performance and to motivate them
to continue to strive for long-term shareholder
value. The KCL Share Plans also aim to
strengthen the Group’s competitiveness in
attracting and retaining talented key senior
management and employees. The KCL
RSP 2020 applies to a broader base of
employees while the KCL PSP 2020 applies
to a selected group of key management
personnel. The range of performance
targets to be set under the KCL PSP 2020
emphasise stretched or strategic targets
aimed at sustaining longer-term growth.
Following the launch of the Company’s
Vision 2030 in FY 2020, the Board endorsed
an additional remuneration component
for selected senior management and
key employees who will be contributing
significantly towards the attainment of
Vision 2030. The one-time Transformation
Incentive Plan (“V2030 PSP-TIP”), which is
awarded in the form of performance shares
under the KCL PSP 2020 in July 2021, is a
long-term incentive plan with a five-year
performance period to incentivise the Group’s
executives to achieve the ambitious objectives
of the Group’s Vision 2030. Subject to meeting
the ambitious performance conditions set,
the vesting will take place in 2026. After taking
into account the performance conditions, the
Board had also allowed for a re-testing of the
performance conditions at the end of 2026.
Executives will only benefit from the
V2030 PSP-TIP if the Group meets a
highly stretched total shareholder return
target as well as the ambitious financial
and non-financial targets linked to the
Vision 2030 scorecard, and if the executives
meet or exceed their individual performance
targets over the five-year performance period.
Given the Group’s strong focus on providing
solutions for sustainable urbanisation, various
aspects of the remuneration framework have
been enhanced for a stronger alignment
with this focus. Sustainability-related targets
relating to the Group’s own carbon footprint
as well as commercialisable solutions
have been either incorporated or further
emphasised in various incentive programmes,
including the annual scorecard that
determines the annual performance bonus
pool for all employees, the 3-year KCL
PSP 2020 that will be awarded in FY 2022
to a selected group of key management
personnel as well as the 5-year V2030 PSP-TIP
that was awarded in 2021 to selected
senior management and key employees
who will be contributing significantly
towards the attainment of Vision 2030.
TARGETS OF THE 3-YEAR KCL PERFORMANCE SHARE PLAN (FROM FY 2022 ONWARDS)
Sustainability
Growth
Capital
Efficiency
Shareholder
Value Creation
Annual Report 2021
GOVERNANCE
90
CORPORATE GOVERNANCE
The(cid:632)weightages of the sustainability targets
vary across the various programmes, weighing
up to 25% for the 3-Year KCL PSP awards.
The RC has the discretion not to award
variable incentives in any year if an executive
is directly involved in a material restatement
of financial statements, in misconduct
resulting in restatement of financial statements,
or in misconduct resulting in financial loss
to(cid:632)the Company. Outstanding performance
bonuses, and share awards under the
New(cid:632)Share Plans are also subject to
RC’s(cid:632)discretion before further payment or
vesting can occur. Under the terms of the
New Share Plans, shares awarded pursuant
to the New Share Plans may be clawed back
in the event of among others, misconduct
(including a breach of laws), or violation of
policies and compliance standards which
had or is likely to cause financial loss or
reputational harm to the Group or which
may be detrimental to the interests of
the Group.
Details of the KCL Share Plans are set out
on pages 120 and 162.
LEVEL AND MIX OF REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL (WHO ARE NOT ALSO DIRECTORS
OR THE CEO) FOR THE YEAR ENDED 31 DECEMBER 2021
The level and mix of each of the director’s remuneration are set out below:
Base/Fixed
Salary
($)
Performance-Related
Cash Bonuses Earned1
($)
Directors’ Total Fees2
($)
Cash
component5
Shares
component5
Benefits-
in-Kind
($)
Contingent Awards
of Shares3,4
($)
Total
Remuneration
($)
PSP
RSP
Remuneration &
Name of Director
Loh Chin Hua
Danny Teoh9
Till Vestring10
Veronica Eng11
Jean-François Manzoni12
Teo Siong Seng13
Tham Sai Choy14
Penny Goh15
Shirish Apte16
Lee Boon Yang17
Alvin Yeo Khirn Hai18
Tan Ek Kia19
1,201,120
–
–
–
–
–
–
–
–
–
–
–
2,103,002
–
–
–
–
–
–
–
–
–
–
–
–
414,910
127,874
147,700
127,035
120,488
140,982
126,000
63,518
232,192
52,011
70,277
–
177,819
54,803
63,300
54,444
51,638
60,421
54,000
27,222
–
–
–
n.m.6
–
–
–
–
–
–
–
–
–
–
–
1,525,700
–
–
–
–
–
–
–
–
–
–
–
2,099,998
–
–
–
–
–
–
–
–
–
–
–
6,929,8207,8
592,729
182,677
211,000
181,479
172,126
201,403
180,000
90,740
232,192
52,011
70,277
Notes:
1 The RC is satisfied that the quantum of performance-related cash bonuses earned by the executive director was fair and appropriate taking into account the extent to which
his KPIs for FY 2021 were met.
2 Based on the NEDs’ fee structure set out in the Annual Report 2020, the total fees amount to $2,166,634. This amount is within the sum of up to S$2,491,000 approved in
the 2021 AGM.
3 Shares awarded under the KCL PSP 2020 are subject to pre-determined performance targets over a three-year performance period. As at 31 March 2021, being the grant
date for the contingent awards under the KCL PSP 2020, the estimated value of each share was $4.18. For the KCL PSP 2020, the figures are based on the value of the PSP
shares at 100% of the award and the figures may not be indicative of the actual value at vesting which can range from 0% to 150% of the award.
4 The contingent award of RSP deferred shares was granted for Mr Loh Chin Hua’s performance and contributions in FY 2021. The Company’s 2021 volume-weighted
average share price of $5.29 was used to determine the number of contingent KCL RSP 2020 deferred shares to be awarded to him as well as his FY 2021 total
remuneration. As at 15 February 2022, being the grant date for the contingent awards under the KCL RSP 2020, the estimated value of each share was $5.84.
5 The amounts stated may be adjusted as indicated on pages 86 and 87 of this report.
6 n.m. – not material
7
In addition to the remuneration disclosed above, Mr Loh Chin Hua was granted performance shares on a one-off basis under the five-year KCL PSP 2020-TIP on 30 July 2021.
Shares awarded under the KCL PSP 2020-TIP are subject to pre-determined performance targets over a five-year performance period. As at 30 July 2021, being the grant
date for the contingent award under the KCL PSP 2020-TIP, the estimated value of each share was $0.98. The total allocation value of the award is estimated at $950,600.
For the KCL PSP 2020-TIP, the figures are based on the value of the PSP-TIP shares at 100% of the award and the figures may not be indicative of the actual value at vesting
which can range from 0% to 150% of the award.
8 Total remuneration shown above for Mr Loh Chin Hua does not include vested share of carried interests for funds created during the time he was Managing Director at Alpha
Investment Partners. These carried interests are only earned at the end of the fund life and depends entirely on the actual performance of the funds after they have been liquidated.
9 Mr Danny Teoh was appointed as Board Chairman and a member of the Nominating and Board Safety Committees with effect from 23 April 2021. He ceased to be the
Chairman of the Audit Committee and member of the Board Risk Committee with effect from the same date. Fees are prorated accordingly.
10 Mr Till Vestring was appointed as the Lead Independent Director with effect from 1 November 2021. Fees are prorated accordingly. He was concurrently appointed as a
member of the Board of Keppel Telecommunications & Transportation Limited with effect from 1 October 2021 and will receive a prorated fee of $11,342 for his services
rendered in the year.
11 Ms Veronica Eng was concurrently a member of the Board of Keppel Capital Holdings Pte Ltd in FY 2021 and will receive a fee of $45,000 for her services rendered in the year.
12 Professor Jean-Francois Manzoni was appointed as a member of the Remuneration Committee with effect from 1 July 2021. He ceased to be a member of the Board Risk
Committee with effect from the same date. Fees are prorated accordingly.
13 Mr Teo Siong Seng was appointed as the Chairman of the Board Safety Committee and a member of the Audit Committee with effect from 23 April 2021. He ceased to be
a member of the Audit and Remuneration Committees with effect from 1 July 2021. Fees are prorated accordingly.
14 Mr Tham Sai Choy was appointed as the Chairman of the Audit Committee with effect from 23 April 2021. Fees are prorated accordingly. He was concurrently a member of
the Board of Keppel Offshore and Marine Ltd in FY 2021 and will receive a fee of $56,219 for his services rendered in the year.
15 Mrs Penny Goh was concurrently Chairman of Keppel REIT Management Limited (“KRML”) in FY 2021 and a member of the Board of Keppel Land Limited (“KLL”) with effect
from 1 October 2021. She will receive a fee of $150,000 for her services rendered to KRML in the year with 70% payable in the form of cash and 30% in the form of units in
Keppel REIT and will receive a prorated fee of $11,250 for her services rendered to KLL in the year.
16 Mr Shirish Apte was appointed to the Board and as a member of the Audit and Board Risk Committees with effect from 1 July 2021. Fees are prorated accordingly. He was
concurrently a member of the Board of Keppel Infrastructure Holdings Pte. Ltd. in FY 2021 and will receive a fee of $50,000 for his services rendered in the year.
17 Dr Lee Boon Yang retired from the Board with effect from 23 April 2021. Concurrently, he ceased to be the Board Chairman and a member of the Nominating, Remuneration
and Board Safety Committees. Fees are prorated accordingly.
18 Mr Alvin Yeo retired from the Board with effect from 23 April 2021. Concurrently, he ceased to be a member of the Audit and Nominating Committees. Fees are prorated accordingly.
19 Mr Tan Ek Kia retired from the Board with effect from 23 April 2021. Concurrently, he ceased to be the Chairman of the Board Safety Committee and a member of the
Audit and Board Risk Committees. Fees are prorated accordingly. He was concurrently a member of the Board of Keppel Offshore & Marine Ltd in FY 2021 and will receive a
fee of $82,397 for his services rendered in the year.
Keppel Corporation Limited
91
PSP and RSP Shares granted and vested for the Executive Director are shown below:
PSP
Awards
Vesting
Date
Contingent
Awards of
PSP Shares
Number of
PSP Shares
Vested
Value of
PSP Shares
Vested
($)1
RSP
Awards
Vesting
Date
Contingent
Awards of
RSP Shares
Number of
RSP Shares
Vested
Value of
RSP Shares
Vested
($)1
Name of
Executive(cid:632)Director
Loh Chin Hua
2016
Awards
2018
Awards3
2019
Awards3
2020
Awards
2021
Awards
28 Feb
2022
28 Feb
2022
28 Feb
2022
28 Feb
2023
29 Feb
2024
27 Feb
2026
0 to 1,125,0002
0 to 480,000
0 to 547,500
0 to 547,500
0 to 547,5004
0 to 1,455,0005
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2019
Awards
28 Feb 2019
28 Feb 2020
262,403
26 Feb 2021
2020
Awards
28 Feb 2020
26 Feb 2021
301,887
28 Feb 2022
87,467
87,467
87,469
100,629
100,629
–
544,919
559,404
449,591
643,583
517,233
–
2021
Awards
26 Feb 2021
28 Feb 2022
260,870
86,956
–
446,954
–
28 Feb 2023
2022
Awards
28 Feb 2022
28 Feb 2023
29 Feb 2024
396,975
–
–
–
–
–
–
–
–
Notes:
1 The value of the shares vested under KCL PSP and RSP is computed based on the market price of the shares when the shares are credited to the employee’s CDP account.
The RC is satisfied that the value of the shares vested under the KCL PSP and RSP to the executive director was fair and appropriate taking into account the extent to which
his KPIs and performance conditions for FY 2021 were met.
2 Refers to one-time contingent shares awarded under the KCL PSP-TIP.
3 As the targets of the 2018 and 2019 PSP awards were set before the onset of the COVID-19 pandemic, the RC decided to extend the performance period of the awards by
1 more year. The achievements in Year 2018, 2019 and 2021 will be used to determine the vesting level of the 2018 PSP award at the end of the extended performance
period, while the achievements in Year 2019, 2021 and 2022 will be used to determine the vesting level of the 2019 PSP award at the end of the extended
performance period.
4 Refers to contingent shares awarded under the KCL PSP 2020.
5 Refers to one-time contingent shares awarded under the KCL PSP 2020-TIP.
The total remuneration paid to the key management personnel (who are not directors or the CEO) in FY 2021 was $15,883,640. The level and
mix of each of the key management personnel (who are not also directors or the CEO) in bands of $250,000 are set out below:
Remuneration Band & Name of Key Management Personnel
Base/Fixed
Salary (%)
Performance-Related
Cash Bonuses Earned1 (%)
Benefits-
in-Kind (%)
Contingent Awards of Shares
PSP (%)
RSP (%)
Above $3,500,000 to $3,750,000
Chan Hon Chew
Above $3,000,000 to $3,250,000
Tan Hua Mui, Christina2
Above $2,000,000 to $2,250,000
Ong Leng Yeow, Chris
Lim Lu-Yi, Louis
Above $1,750,000 to $2,000,000
Lim Joo Ling, Cindy
Above $1,500,000 to $1,750,000
Pang Thieng Hwi, Thomas
Manjot Singh Mann
20
20
25
26
27
27
39
32
32
27
29
29
29
20
n.m.6
n.m.6
n.m.6
n.m.6
n.m.6
n.m.6
5
16
16
21
16
15
15
16
32
32
27
29
29
29
20
Notes:
1 The RC is satisfied that the quantum of performance-related bonuses earned by the key management personnel was fair and appropriate taking into account the extent to
which their KPIs for FY 2021 were met.
2 Total remuneration shown above for Ms Christina Tan does not include vested share of carried interests for funds created during the time she was Managing Director at
Alpha Investment Partners. These carried interests are only earned at the end of the fund life and depend entirely on the actual performance of the funds after they have
been liquidated.
3 Dr Ong Tiong Guan retired from the Company with effect from 27 February 2021. He received a total remuneration of less than $250,000 for his period of employment with
the Company. Subsequent to his retirement, Dr Ong was engaged as an Advisor and will receive a fee of not more than $250,000 per annum for his advisory services.
4 Mr Tan Swee Yiow stepped down as CEO of Keppel Land with effect from 15 February 2021 and was appointed as Senior Managing Director of Urban Development
5
thereafter. His FY 2021 total remuneration was in the range of $1,500,000 to $1,750,000.
In addition to the remuneration disclosed above, all the key management were granted performance shares on a one-off basis under the five-year KCL PSP 2020-TIP on
30 July 2021. Shares awarded under the KCL PSP 2020-TIP are subject to pre-determined performance targets over a five-year performance period. As at 30 July 2021, being
the grant date for the contingent awards under the KCL PSP 2020-TIP, the estimated value of each share was $0.98. The total allocation value of the awards is in the range
of $250,000 to $500,000 for Mr Chan Hon Chew, Ms Christina Tan and Mr Chris Ong, and in the range of less than $250,000 for the remaining key management personnel.
For the KCL PSP 2020-TIP, the figures are based on the value of the PSP-TIP shares at 100% of the award and the figures may not be indicative of the actual value at vesting
which can range from 0% to 150% of the award.
6 n.m. – not material
Annual Report 2021
GOVERNANCE
92
CORPORATE GOVERNANCE
REMUNERATION OF EMPLOYEES WHO
ARE SUBSTANTIAL SHAREHOLDERS
OF THE COMPANY OR ARE IMMEDIATE
FAMILY MEMBERS OF A DIRECTOR
OR THE CHIEF EXECUTIVE OFFICER OR
A SUBSTANTIAL SHAREHOLDER OF
THE COMPANY
No employee of the Company and its
subsidiaries is a substantial shareholder of
the Company or an immediate family member
of a director, the CEO or a substantial
shareholder of the Company and whose
remuneration exceeded $100,000 during
the(cid:632)financial year ended 31 December 2021.
“Immediate family member” means the
spouse, child, adopted child, step-child,
sibling and parent.
AUDIT COMMITTEE
PRINCIPLE 10:
The Board has an Audit Committee which
discharges its duties objectively
The Audit Committee (AC) comprises entirely
non-executive and independent directors,
namely:
• Mr Tham Sai Choy
(from 23 April 2021)
Independent Chairman1
• Mr Danny Teoh
(up to 23 April 2021)
Independent Chairman
• Mr Alvin Yeo
(up to 23 April 2021)
Independent Member
• Ms Veronica Eng
Independent Member
• Mr Tan Ek Kia
(up to 23 April 2021)
Independent Member
• Mr Teo Siong Seng
(from 23 April 2021 to 1 July 2021)
Non-executive and
Non-independent Member
• Mrs Penny Goh
Independent Member
• Mr Shirish Apte
(from 1 July 2021)
Independent Member
The AC’s primary role is to assist the Board
with ensuring the integrity of financial reporting
and the adequacy and effectiveness of
the(cid:632)system of internal controls and risk
management. The AC has explicit authority
to investigate any matter within its
responsibilities, full access to and co-operation
by management, full discretion to invite any
director or executive officer to attend its
meetings, and reasonable resources (including
access to external consultants) to enable it
to properly discharge its responsibilities.
Mr Tham Sai Choy, Ms Veronica Eng and
Mr Shirish Apte have recent, relevant and
in-depth experience in accounting and
financial management. Mrs Penny Goh has
extensive experience in advising on a broad
range of corporate real estate transactions
for commercial, industrial and logistics
projects in Singapore and Asia Pacific,
involving investment, joint development
and(cid:632)profit participation structures, and
has(cid:632)the practical knowledge of issues and
considerations affecting the Committee to
discharge her responsibilities as a member
of the Committee. Mr Tham Sai Choy,
Ms Veronica Eng, Mrs Penny Goh and
Mr Shirish Apte are also members of
the(cid:632)Board Risk Committee (“BRC”), with
Ms Veronica Eng being the Chairperson.
None of the members of the AC were
partners or directors of the Company’s
current external auditors within the last two
years and none of the members of the AC
hold any financial interest in the auditing firm.
The detailed terms of reference of the
Committee are set out on page 100 herein.
AUDIT
The AC met with the external auditors
six times during the year and at least one of
these meetings was without the presence
of(cid:632)management and the internal auditors.
The AC also met with the internal auditors
five times during the year, and at least one
of these meetings was conducted without
the presence of management and the
external auditors.
The AC reviewed and approved the Group
external auditor’s audit plan for the year
and(cid:632)assessed the quality of the work carried
out by the external auditors in accordance
with(cid:632)the Audit Quality Indicators Disclosure
Framework published by the Accounting
and(cid:632)Corporate Regulatory Authority and
is(cid:632)satisfied with the performance. Taking
into account the requirements under the
Accountants Act 2004 of Singapore, the AC
undertook a review of the independence and
objectivity of the external auditors through
discussions with the external auditors as
well as reviewing the audit and non-audit
fees awarded to them and has confirmed
that the non-audit services performed
by(cid:632)the(cid:632)external auditors would not affect
their(cid:632)independence. For details of fees
payable to the auditors in respect of
audit(cid:632)and non-audit services, please refer
to(cid:632)Note(cid:632)27 of the Notes to the Financial
Statements on page 186.
The Company has complied with Rule 712,
and Rule 715 read with Rule 716 of the SGX
Listing Manual in relation to its auditing firms.
The Company also has an in-house internal
audit function (“Group Internal Audit”), which
together with the external auditors, report
their findings and recommendations to the
AC independently. The role of Group Internal
Audit is to provide independent assurance to
the AC to ensure that the Company maintains
a sound system of internal controls. In this
aspect, Group Internal Audit conducts regular
reviews of the adequacy and effectiveness
of the Group’s key internal controls,
including financial, operational, compliance
and information technology (“IT”) controls,
and risk management. Any significant
non-compliance or failures in internal
controls together with recommendations
for(cid:632)improvements are reported to the AC.
Group Internal Audit also undertakes
investigations as directed by the AC.
Group Internal Audit has direct access to the
AC and unfettered access to all the documents,
records, properties and personnel of the
Group. The AC approves the hiring, removal,
evaluation and compensation of the Head
of(cid:632)Group Internal Audit, whose primary line
of reporting is to the Chairman of the AC,
with an administrative reporting line to the
CEO of the Company. The AC reviewed
the(cid:632)adequacy and effectiveness of Group
Internal Audit and is satisfied that the team
is independent, effective and adequately
resourced with persons with relevant
qualifications and experience and has
appropriate standing within the Company.
Group Internal Audit attends the Company’s
and the Group’s key strategy sessions, and
executive meetings, and is staffed with
professionals with sufficient expertise in
corporate governance, risk management,
internal controls, and other relevant disciplines,
The AC also reviewed the training costs and
programmes attended by Group Internal Audit
to ensure that their technical knowledge and
skill sets remain current and relevant.
As a member of the Institute of Internal
Auditors (“IIA”), Group Internal Audit is
guided by the International Professional
Practices Framework set by the IIA. External
quality assessment reviews are carried out
at least once every five years by qualified
professionals, with the last assessment
conducted in 2021. The results re-affirmed
that the internal audit activity generally
conforms to the International Standards
for(cid:632)the Professional Practice of Internal
Auditing. Group Internal Audit staff perform
a yearly declaration of independence and
confirm their adherence to Keppel’s Code of
Conduct as well as the Code of Ethics
established by the IIA, from which the
principles of objectivity, competence,
confidentiality and integrity are based.
1 Mr Tham Sai Choy succeeded Mr Danny Teoh as Chairman of the Audit Committee on 23 April 2021. Prior to that, Mr Tham Sai Choy was a member of the Audit Committee.
Keppel Corporation Limited
93
The purpose, authority and responsibility of
Group Internal Audit are formally defined in
an internal audit charter, which is approved by
the AC. The internal audit charter establishes
Group Internal Audit’s position within the
organisation, including the nature of its
functional reporting relationship with the AC;
authorises access to records, personnel, and
physical properties relevant to the performance
of engagements; and defines the scope of
internal audit activities. The Charter mandates
Group Internal Audit to maintain a quality
assurance and improvement program that
covers all aspects of the internal audit activity,
including the evaluation of its conformance
with the Standards, and an evaluation of
whether internal auditors apply the IIA’s
Code of Ethics.
During the year, Group Internal Audit adopted
a risk-based auditing approach that focuses
on key risks, including financial, operational,
compliance and information technology risks.
An annual audit plan is developed using a
structured risk and control assessment
framework, and this plan is reviewed and
approved by the AC to ensure that the
risk-based plan sufficiently covered the
effectiveness of controls to mitigate the
significant financial, operational, compliance
and information technology risks of the
Company. Audits are planned based on the
results of the assessment, with priority given to
auditing the areas of highest risk within the
Company. All Group Internal Audit’s reports
are submitted to the AC for deliberation
with(cid:632)copies of these reports extended to
the(cid:632)Chairman, CEO and relevant senior
management personnel. In addition, significant
audit findings and recommendations put up
by the internal and the external auditors are
reported to the AC and discussed at AC
meetings. To ensure timely and adequate
closure of audit findings, the status of
implementation of the actions agreed by
management is tracked and discussed with
the AC. The AC also reviews the effectiveness
of the actions taken by management on the
recommendations made by Group Internal
Audit and the external auditors.
FINANCIAL MATTERS
Changes to accounting standards and
accounting issues which have a direct impact
on the financial statements were reported to
the AC, and highlighted by the external auditors
in their quarterly meetings with the AC.
During the year, the AC performed independent
review of the financial statements of the
Company before the announcement of the
Company’s first half and full year results.
In(cid:632)the process, the Committee reviewed the
key areas of management judgment applied
for adequate provisioning and disclosure,
critical accounting policies and any
significant changes made that would have
a(cid:632)material impact on the financials.
In its review of the financial statements of
the Group and the Company for FY 2021, the
AC reviewed the key areas of management’s
judgment and estimates applied for key
financial issues, including valuation of
investment properties and development
properties held for sale, impairment
assessment of exposure to KrisEnergy,
recoverability of contract assets, material
receivables and stocks, financial exposure
in(cid:632)relation to contracts with Sete Brasil,
global resolution with criminal authorities
in(cid:632)relation to corrupt payments, revenue
recognition and contract cost, and the
impairment assessment of goodwill arising
from the acquisition of M1, that might affect
the integrity of the financial statements.
The(cid:632)AC also considered the report from
the(cid:632)external auditors, including their findings
on the key audit matters as set out in the
independent auditor’s report for the financial
year ended 31 December 2021.
In addition to the findings of the external
auditors, the AC took into consideration the
methodology applied in determining the
valuation and value-in-use of different asset
classes, including the reasonableness of
the(cid:632)estimates and key assumptions used.
The AC also reviewed management’s
assessment of recoverability of contract
assets, material receivables and stocks,
financial exposure in relation to contracts
with Sete Brasil, including cash flow estimates
relating to the settlement agreement between
the Group and Sete Brasil as well as related
developments, assessment on whether there
was a potential for any additional provision
in relation to the corrupt payments, and
estimates of the total costs and physical
proportion of work completed in determining
the stage of completion. Furthermore,
external independent valuations, work
performed by independent professional
firms and independent financial advisor,
as(cid:632)well as opinions from internal and
external legal counsel, where applicable,
were considered when reviewing
management’s assessment.
The AC concurs with the methodology,
accounting treatment and estimates adopted,
as well as the disclosures made in the
financial statements for each of the key audit
matters set out by the external auditors in
their report.
WHISTLE-BLOWER POLICY
The AC has reviewed the “Keppel Whistle-
Blower Policy” (the “Policy”) which provides
for the mechanisms by which employees
and other persons may, in confidence, raise
concerns about possible improprieties
in(cid:632)business conduct, and was satisfied
that(cid:632)arrangements are in place for the
independent investigation of such matters
and for appropriate follow-up action.
To(cid:632)facilitate the management of incidences
of alleged fraud or other misconduct,
the(cid:632)AC(cid:632)is guided by a set of guidelines to
ensure proper conduct of investigations
and(cid:632)appropriate closure actions following
completion of the investigations, including
administrative, disciplinary, civil and/or
criminal actions, and remediation of control
weaknesses that perpetrated the fraud or
misconduct so as to prevent a recurrence.
Significant matters raised through the
whistle-blowing channel are reported to
the Board.
The details of the Policy are set out on
page 104 hereto. The AC reviews the Policy
yearly to ensure that it remains current.
INTERESTED PERSON TRANSACTION
The Company has established policies and
procedures for reviewing and approving
interested person transactions (“IPTs”) in
accordance with the general mandate from
shareholders that such transactions are
made on normal commercial terms and
will(cid:632)not be prejudicial to the interests of the
Company and its minority shareholders.
Management reported the IPTs to the AC in
accordance with the mandate. These IPTs
were reviewed by the internal auditors,
and(cid:632)all findings were reported during
AC meetings.
Details of IPTs entered into by the Group
in(cid:632)FY 2021 are set out on page 215 of this
Annual Report.
RISK MANAGEMENT AND
INTERNAL(cid:632)CONTROLS
PRINCIPLE 9:
The Board is responsible for the governance
of risk and ensures that Management maintains
a sound system of risk management and
internal controls, to safeguard the interests
of the Company and its shareholders.
The Board Risk Committee (BRC) comprises
entirely non-executive and independent
directors, namely:
• Ms Veronica Eng
Independent Chairperson
• Mr Danny Teoh
(up to 23 April 2021)
Independent Member
• Mr Tan Ek Kia
(up to 23 April 2021)
Independent Member
• Prof Jean-François Manzoni
(up to 1 July 2021)
Independent Member
• Mr Tham Sai Choy
Independent Member
• Mrs Penny Goh
Independent Member
• Mr Shirish Apte
(from 1 July 2021)
Independent Member
Annual Report 2021
GOVERNANCE
94
CORPORATE GOVERNANCE
KEPPEL’S SYSTEM OF MANAGEMENT CONTROLS
BOARD OF DIRECTORS
MANAGEMENT
INTERNAL AUDIT
FIRST LINE
Business Governance
• Core Values
• Code of Conduct
• Financial Controls
• Operational Controls
• Compliance Controls
• Technology Controls
SECOND LINE
Management Assurance Framework
• Control Self-Assessment
• Enterprise Risk Management
• Regulatory Compliance
• Technology & Cyber
Security Governance
THIRD LINE
Independent Assurance
•
Independent &
Objective Assurance
EXTERNAL
ASSURANCE
PROVIDERS
Accountability, reporting
Delegation, direction, resources, oversight
Alignment, communication, coordination, collaboration
The BRC considers the nature and extent
of(cid:632)the significant risks which the Company
may take in achieving its strategic objectives
and value creation; and reviews and guides
management in the formulation of risk policies
and processes to effectively identify, evaluate
and manage significant risks, to safeguard
shareholders’ interests and the Group’s
assets, and ensure corporate sustainability.
The Committee reports to the Board on
critical risk issues, material matters, findings
and recommendations.
The detailed terms of reference of this
Committee are disclosed on page 100 herein.
The Group Risk & Compliance department,
working in conjunction with the business teams,
has supported management in applying
the(cid:632)Enterprise Risk Management (“ERM”)
Framework to ensure significant risks across
the Group are assessed and adequately
mitigated. This is performed through the
monitoring of risk matters across the Group,
conduct of training, site visits, participation
at IMPAC meetings, and implementation of
risk-related policies and standards. The ERM
Framework was established to guide Group
entities in managing risks and also facilitate
the Board’s assessment of the adequacy and
effectiveness of the Group’s risk management
system and processes in managing risk. It
lays out the governance mechanisms and
principles, policies and processes, and system
pertaining to how Group entities should
identify, assess, mitigate, communicate, and
monitor or escalate significant risk matters.
the(cid:632)mitigation plans where applicable,
are(cid:632)provided to the Board and BRC at
quarterly meetings. This is complemented
by education and awareness, resources and
expertise, and assessment or feedback,
which are ongoing in nature.
The Group’s approach to risk management
and the key risks of the Group are set out
in(cid:632)the “Risk Management” section on
pages(cid:632)110 to 113 of this Annual Report.
The(cid:632)Group is guided by a set of Risk Tolerance
Guiding Principles, as disclosed on page 110.
The Group also has in place Keppel’s System
of Management Controls (“KSMC”) outlining
the Group’s internal control and risk
management processes and procedures.
The KSMC comprises the Three-Lines Model
to ensure the adequacy and effectiveness of
the Group’s system of internal controls and
risk management.
Under the First Line of Business Governance,
the Group and its business units’ (“BUs”)
management, supported by their respective
line functions and committees, are responsible
for the identification and mitigation of risks
(including financial, operational, compliance
and technology risks) facing the Group and
respective BUs in the course of running their
business. Appropriate policies, procedures, and
controls are implemented and operationalised
in line with the Group’s risk appetite to address
such risks. Employees are also guided by the
Group’s Core Values and expected to comply
strictly with Keppel’s Code of Conduct.
Risk assessments are performed at each
business unit and agreed with senior
management before being consolidated to
form the Group risk assessment. Further
assessments are performed at the Group and
articulation of each key risk area grouped
by(cid:632)sub-groups within Strategic, Operational,
Compliance and Financial risk, and
Under the Second Line, Management
Assurance Frameworks are established
to enable oversight and governance over
operations and activities undertaken by
management under the First Line. Business
units and entities scoped in for control
self-assessment (“CSA”) are required to
conduct a self-assessment exercise to
assess the status of their respective internal
controls on an annual basis. The annual CSA
exercise is overseen by Control Assurance.
Remedial actions are implemented to address
all control gaps identified during the CSA
exercise. Group Risk & Compliance (“GRC”),
working in conjunction with the Group and
respective BUs’ line functions and committees,
oversees the implementation of the Group’s
Enterprise Risk Management Framework,
under which the Group will identify, assess
and mitigate risks facing the Group to
ensure that risks fall within the established
risk appetite and tolerance. In respect of
regulatory compliance, the Group’s and BU’s
line functions and committees support and
work alongside GRC and the Group’s and
BU’s management to help ensure relevant
policies, processes and controls are effectively
designed, implemented and managed to
mitigate compliance risks that the Group
and respective BUs face in the course of
their business. The Technology Governance
Framework overseen by Group Information
Technology aims to align technology strategy
to enterprise vision, whilst strengthening
technology controls and security, and
managing technology risks for the Group.
This framework was further strengthened
in(cid:632)January 2021 with the formalisation of an
enhanced Group Cyber Security Governance
structure which includes the repurposing
of(cid:632)Keppel’s existing IT Security Operations
Centre into a Cyber Security Centre with
enhanced capabilities to ensure that the
baseline security posture of the Group is
maintained, and is overseen by a dedicated
Group Cyber Security function which drives
the enterprise vision, strategy and programme
to ensure that Keppel’s technology assets
are adequately protected. The Technology
and Cyber Security Governance Frameworks
balance strategic technology adoption,
business resiliency and security outcomes
towards effective business continuity and
technology risk mitigations.
Keppel Corporation Limited
95
The Third Line comprises independent
assurance, including internal and external
audit. Internal audit provides the Board
and(cid:632)the Group’s senior management with
independent assurance over the adequacy
and effectiveness of the system of internal
controls, risk management and governance,
while external audit considers the internal
controls relevant to the Company’s
preparation of financial statements and
performs tests on such internal controls,
where they are assessed to be necessary,
in(cid:632)support of the audit opinion issued on
the(cid:632)financial statements of the Company.
ENHANCEMENTS TO COMPLIANCE
PROGRAMME IN FY 2021
At Keppel, accountability is a core value.
As our Code of Conduct states, “we care
how results are achieved, not just that
they are attained.” Implementing that core
value through enhancing our regulatory
compliance process and by reminding every
Keppelite of that value is a focus of attention
for us, our boards, and officers and line
managers across the globe.
This section provides an overview of the
improvements and enhancements that have
been made to strengthen Keppel’s compliance
programme over the past year. Further details
of our compliance initiatives are set out
on(cid:632)pages 114 to 116 of this Annual Report.
The(cid:632)Company is committed to a continuous
review and, where necessary and appropriate,
further improvements and enhancements
to(cid:632)the Group’s compliance programme will
be made.
The Group has taken the following steps
over the past year to further enhance its
internal controls, policies and procedures:
a.
In 2021, the Singapore entities of
Keppel Infrastructure and overseas
entities of Keppel Land (Vietnam, China
and Indonesia) also achieved ISO 37001
certification. The three-year Deferred
Prosecution Agreement (DPA) with the US
Department of Justice was dismissed in
2021. Keppel O&M has complied with all
obligations which includes the successful
implementation of an enhanced
compliance programme and procedures.
b. Enhancement of the Dealing with
Third Party Associates (“TPA”) policy to
consolidate and streamline compliance
due diligence requirements for TPA,
Mergers & Acquisitions Compliance
and(cid:632)Agents’ fee policies.
c. Digitalisation of due diligence processes
and conflict of interest declaration in
key(cid:632)projects through a Group-wide
application and centralised repository
to(cid:632)improve efficiency and access to
information across the Group.
THE GROUP’S COMPLIANCE PROGRAMME
The Group’s compliance programme also
includes the following:
a. a compliance governance structure that
is overseen by a Regulatory Compliance
Management Committee and Regulatory
Compliance Working Team, bringing
together senior management, compliance
personnel, and other core function leads
to discuss compliance enhancements and
address compliance issues as they arise;
b. a Supplier Code of Conduct, to integrate
Keppel’s sustainability principles across
our supply chain, and positively influence
the environmental, social and governance
performance of our suppliers. Suppliers
of the Group are expected to abide by the
Supplier Code of Conduct, which covers
areas pertaining to business conduct
(including specific anti-bribery provisions),
labour practices, safety and health, and
environmental management;
c.
d.
risk-based due diligence process for all
third-party associates who represent the
Group in business dealings, including
our joint venture partners, to(cid:632)assess the
compliance risk of the business partner; and
the dedicated independent Group-wide
compliance function has reporting
lines(cid:632)independent of business units.
The(cid:632)Head of the Group’s compliance
function has a primary line of reporting
to the Chairman of the BRC, with an
administrative reporting line to the
CFO(cid:632)of the Company.
The Group’s compliance programme is and
will be subjected to a periodic review to ensure
it meets the following standards, i.e. that:
1. Board and Senior Management
Commitment
The Group’s senior management,
including members of the Board,
provide(cid:632)continuous, clear and explicit
support to the compliance programme.
2. Policies and Procedures
The Group continuously implements
and(cid:632)communicates its corporate policy
against violations of any anti-corruption
laws. This policy has been and will
continue to be documented in writing,
include appropriate measures to reduce
the prospect of violations of anti-corruption
laws, and encourage and support the
observance of compliance policies and
procedures by personnel at all levels of
the Group. These anti-corruption policies
and procedures apply to all directors,
officers and employees and, where
necessary and appropriate, outside parties
acting on behalf of Keppel, including but
not limited to, agents and intermediaries,
consultants, representatives, partners
and(cid:632)suppliers.
Individuals at all levels of Keppel comply
with Keppel’s Code of Conduct and its
compliance policies and procedures.
Such(cid:632)policies and procedures address,
among other areas:
a. gifts;
b. hospitality, entertainment,
and expenses;
c. dealing with third party associates
– due diligence;
d. political contributions;
e. donations and sponsorships;
f.
facilitation payments; and
g. solicitation and extortion.
The Group ensures that:
a. books, records and accounts are
in(cid:632)reasonable detail, and accurately
and(cid:632)fairly reflect the transactions
and(cid:632)disposition of assets; and
b.
the Group develops and maintains a
system of internal accounting controls,
sufficient to provide reasonable
assurance that:
i.
ii.
transactions are performed
in(cid:632)accordance with the
Group’s(cid:632)general guidelines
or(cid:632)specific authorisation;
transactions are recorded as
necessary to permit preparation of
financial statements in conformity
with generally accepted accounting
principles or any other criteria
applicable to such statements,
and(cid:632)to maintain accountability
for assets;
iii. access to assets shall only be
permitted in accordance with
the(cid:632)Group’s general guidelines
or(cid:632)specific authorisation; and
iv. the recorded accountability for
assets shall be compared with the
existing assets at reasonable intervals
and appropriate action be taken
with respect to any differences.
3. Periodic Risk-based Review
The Group continues to enhance its
compliance policies and procedures on
the(cid:632)basis of a periodic risk assessment
to(cid:632)ensure their continued effectiveness,
taking into account relevant developments
such as international and industry
standards, and addressing the individual
circumstances of the Group, and in
particular corruption risks, including but not
limited to its geographical organisation
and sectors of industrial operation.
Annual Report 2021
GOVERNANCE
96
CORPORATE GOVERNANCE
4. Training and Orientation
The Group continuously ensures that
its(cid:632)compliance policies and procedures
are communicated effectively to all
employees, including officers, directors,
and where necessary and appropriate
agents, and business partners. These
mechanisms include:
a. periodic focused ‘gate-keeper’
training for senior management
members (including directors),
employees in positions of leadership,
and targeted training for employees
in positions otherwise exposed to
corruption risks, and where necessary
and appropriate, compliance training
for agents and business partners;
and annual e-training for directors,
officers and employees; and
b. corresponding certifications by
such(cid:632)senior management members
(including directors), employees,
agents and business partners,
acknowledging their understanding
of policies and conformity with
training requirements.
5.
Internal Reporting, Communication
and(cid:632)Investigation
The Group maintains a system for
the(cid:632)internal reporting/communication
of(cid:632)potential violations of compliance
policies and procedures and applicable
laws, that ensures as far as possible
confidentiality to the whistle-blower
and(cid:632)investigation subjects.
The Group maintains a process for
receiving internal reports/communications
with sufficient resources to respond and
document allegations of violations of
compliance policies and procedures
and(cid:632)applicable law. When necessary,
the(cid:632)Group undertakes independent
investigations of the alleged violations.
Due to travel restrictions imposed in light
of COVID-19, in 2021, key investigations
into whistle-blower complaints alleging
misconduct (of any kind) have been
conducted by local third-party forensic
and investigations specialists.
6. Enforcement and Discipline
The Group maintains and, where
necessary, improves its mechanisms
designed to effectively enforce its
compliance policies and procedures
including, where appropriate, the
imposition of disciplinary measures in
the case of violations.
and employees. Such procedures are
applied consistently and fairly, regardless
of the position held by, or the perceived
importance of the senior management
member (including directors) or employee.
Where misconduct is discovered,
measures are taken promptly to cease the
misconduct or irregularities, and remedy
the harm resulting from such misconduct.
7. Third-party Relationships
The Group continues to implement the
following procedures with reference to
its agents and business partners:
a. due diligence relating to the
engagement of third parties;
b. appropriate oversight of third
parties; and
c. seeking reciprocal commitments
regarding ethical conduct from
third-parties, associates and
business partners.
When necessary, the Group includes
in(cid:632)contracts with third-parties, agents
and business partners, anti-corruption
provisions, which may include
the following:
diligence checks and steps to be
performed on potential mergers and
acquisition target entities.
The Group applies its compliance codes,
policies and procedures in a speedy
and(cid:632)efficient manner to newly acquired
businesses or entities, and conducts
training for new employees, senior
management (including directors),
agents and business partners.
9. Monitoring and Developments
The Group conducts continuous
monitoring of its compliance
programme to enhance its effectiveness
in preventing and detecting violations
of(cid:632)its compliance policies.
ANNUAL ASSURANCE
The Board has received assurance:
a.
from the CEOs and CFOs of each of
the(cid:632)Group’s business divisions and the
CEO and CFO of the Company that,
as(cid:632)of(cid:632)31(cid:632)December 2021, the financial
records(cid:632)of the Group have been properly
maintained and the financial statements
for the year ended 31 December 2021
give a true and fair view of the Group’s
operations and finances; and
a. commitment to act in accordance
b.
with applicable laws;
b.
c.
right to conduct audits of the books
and records of third-parties, agents
or business partners; and
right to terminate a contract due
to(cid:632)violations of compliance policies
and procedures or any applicable
anti-corruption law by any third
party, agent or business partner.
The Group also communicates its
Sanctions Compliance Policy to all
counterparties of the Group as relevant,
to ensure that in all dealings with such
counterparties, they are made aware of,
and agree to comply with, all applicable
sanctions and export control laws
and(cid:632)regulations.
In addition, risk-based screening of
counterparties to identify sanctions-
related risks is also conducted. Where
appropriate on a risk-based consideration,
contracts with such counterparties
would contain sanctions and export
control compliance clauses.
from the CEO and CFO of the Company,
CEOs and CFOs of each of the Group’s
business divisions, and other key
management personnel responsible for
risk management and internal control
systems that, as of 31 December 2021,
the Group’s internal controls (including
financial, operational, compliance and IT
controls) and risk management systems
were adequate and effective to address
the risks which the Group considers
relevant and material to its operations.
Based on the internal controls and
enterprise-wide risk management framework
established and maintained by the Group,
work performed by internal and external
auditors, and reviews performed by
management, the AC and BRC, as well as
the assurances set out above, the Board is
of the view that, as of 31 December 2021,
the Group’s internal controls (including
financial, operational, compliance and IT
controls) and risk management systems
were adequate and effective to address the
risks which the Group considers relevant
and material to its operations.
The Board notes that the system of internal
controls and risk management established
by the Group provides reasonable, but not
absolute, assurance that the Group will not
be adversely affected by any event that
could be reasonably foreseen as it strives
to(cid:632)achieve its business objectives. In this
regard, the Board also notes that no system
The Group institutes disciplinary measures
with reference to, among other things,
violations of compliance policies and
procedures and applicable law by its
senior management (including directors)
8. Mergers, Acquisitions and
Corporate(cid:632)Restructuring
The Group implemented a Mergers and
Acquisitions Compliance Due Diligence
process which gives guidance and sets
out requirements for compliance due
Keppel Corporation Limited
of internal controls and risk management
can provide absolute assurance against
the(cid:632)occurrence of material errors, poor
judgment in decision making, human error,
losses, fraud and other irregularities.
The AC and BRC concur with the Board’s
view that, as of 31 December 2021, the
Group’s internal controls (including financial,
operational, compliance and IT controls) and
risk management systems were adequate
and effective to address the risks which
the(cid:632)Group considers relevant and material
to(cid:632)its operations.
SHAREHOLDER RIGHTS
AND(cid:632)COMMUNICATION
WITH(cid:632)SHAREHOLDERS
PRINCIPLE 11:
The Company treats all shareholders fairly
and equitably in order to enable them to
exercise shareholders’ rights and have
the opportunity to communicate their
views on matters affecting the Company.
The Company gives shareholders a balanced
and understandable assessment of its
performance, position and prospects.
PRINCIPLE 12:
The Company communicates regularly with its
shareholders and facilitates the participation
of shareholders during general meetings and
other dialogues to allow shareholders to
communicate their views on various matters
affecting the Company.
PRINCIPLE 13:
The Board adopts an inclusive approach by
considering and balancing the needs and
interests of material stakeholders, as part of
its overall responsibility to ensure that the
best interests of the Company are served.
The Board is responsible for providing
a(cid:632)balanced and understandable
assessment(cid:632)of the Company’s and
Group’s(cid:632)performance, position and
prospects, including interim(cid:632)and other
price(cid:632)sensitive public(cid:632)reports, and reports
to(cid:632)regulators (if(cid:632)required).
The Board has embraced openness
and(cid:632)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,
press(cid:632)releases, the Company’s website,
public webcasts and media and analyst
briefings. The Company’s Annual Report
is(cid:632)accessible on the Company’s website,
and(cid:632)can be viewed at or downloaded from
https://www.kepcorp.com/en/investors/
agm-egm, and shareholders are encouraged
to read the Annual Report on the Company’s
website. Shareholders may, however,
request for a physical copy at(cid:632)no cost.
The Company adopts a stakeholder
engagement framework developed in
accordance with the AA1000 Accountability
Stakeholder Engagement Standard, whereby
stakeholders are defined to be individuals,
groups of individuals or organisations
that(cid:632)affect and/or could be affected by
Keppel’s activities, products or services
and(cid:632)associated performance.
The Company engages its stakeholders
regularly in the determination of its material
areas of focus. Materiality assessments are
important components of the Company’s
sustainability strategy and reporting.
The(cid:632)Company’s materiality assessments
97
Keppel senior management
engaged the media and
investment community
at the 2H & FY 2021
results webcast.
Annual Report 2021
GOVERNANCE
98
CORPORATE GOVERNANCE
are(cid:632)based on the AA1000 Accountability
Principles of Inclusivity and Materiality, as well
as the Global Reporting Initiative (“GRI”)
Principles for Defining Report Content —
stakeholder inclusiveness, sustainability
context, materiality and completeness.
Materiality with respect to sustainability
reporting, as defined by GRI Standards,
includes topics and indicators that reflect
the organisation’s significant economic,
environmental and social impacts;
and(cid:632)would substantively influence the
assessments and decisions of stakeholders.
The Company has identified and prioritised
its material environmental, social and
governance issues. An overview of the
Company’s approach to sustainability
management can be found on page 28 of
this report. More details of the Company’s
management approach, priorities, targets
and performance reviews in key areas will be
made available through its externally audited
Sustainability Report, prepared in accordance
with the GRI Standards, published annually
in May.
The Company’s Corporate Communications
department (with assistance from other
departments as required) regularly
communicates with shareholders and
receives and attends to their queries
and concerns.
The Company treats all its shareholders fairly
and equitably and keeps all its shareholders
and other stakeholders informed of its
corporate activities, including changes in
the(cid:632)Company or its business, which would
be likely to materially affect the price or
value of its shares, on a timely basis.
The Company has in place an Investor
Relations Policy which sets out the principles
and practices that the Company applies
to(cid:632)provide shareholders and prospective
investors with information necessary to
make well-informed investment decisions
and to ensure a level playing field.
The Investor Relations Policy is published on
the Company’s website at www.kepcorp.com,
and sets out the mechanism through which
shareholders may contact the Company with
questions and through which the Company
may respond to such questions. This is to
allow for an ongoing exchange of views so
as to actively engage and promote regular,
effective and fair communication
with shareholders.
The Company announces its financial
statements on a half-yearly basis, but
continues to provide voluntary business
updates in between its half-yearly financial
reports. The Company stands committed to
engaging shareholders and the investment
community through clear, timely and
consistent communications.
The Company employs various platforms
to(cid:632)effectively engage the investment
community and other stakeholders,
with(cid:632)an(cid:632)emphasis on timely, accurate,
fair(cid:632)and transparent disclosure of
information. Engagement with stakeholders
takes many forms, including live webcasts
of financial results and presentations,
email(cid:632)communications, publications and
content on the Company’s corporate
website, as well as through facility visits
when possible, where shareholders may
raise any queries or concerns that they
may(cid:632)have. Presentation materials of the
Company’s half-yearly financial statements
and voluntary business updates are made
available on its website on the same day
they are released on SGXNet, while a
transcript of the questions and answers
session held with media and analysts is
also(cid:632)released on SGXNet and posted on
the(cid:632)Company’s website before the start of
the next trading day.
The Company’s mobile-responsive
website(cid:632)is regularly updated with the latest
information. These include latest updates
on(cid:632)business and operations, half-yearly
financial statements, voluntary business
updates and dividend information,
materials(cid:632)provided at analysts and media
briefings, annual reports, as well as
information on(cid:632)general meetings including
presentations and minutes. Contact
details(cid:632)of the Investor Relations personnel
(email:(cid:632)investor.relations@kepcorp.com)
are(cid:632)also set out on the website to facilitate
any queries from investors.
In addition to shareholder meetings,
senior(cid:632)management engages investors,
analysts and the media, as well as attends
roadshows and industry conferences
organised by major brokerage firms to solicit
and understand the views of the investment
community. In 2021, most physical roadshows
and meetings were replaced by virtual
engagements due to COVID-19-related safe
management measures. The Company
hosted about 270 virtual meetings and
conference calls with institutional investors
from Singapore, Australia, Hong Kong,
Japan, Malaysia, Thailand, the UK and
the(cid:632)US, and also participated in a virtual
investment conference organised by the
Singapore Exchange (SGX) and Credit
Suisse. In 2021, the Company organised
briefings for media and analysts, as well as
calls with investors, to help the media and
investment community better understand
Keppel’s performance, strategy and
progress towards achieving its Vision 2030
goals. The Company has, since 2017,
been(cid:632)collaborating with the Securities
Investors Association (Singapore) (SIAS)
to(cid:632)hold briefings for retail shareholders.
In(cid:632)2021, the Company held its annual
briefing on Keppel’s performance,
as(cid:632)well(cid:632)as(cid:632)a dialogue session with retail
shareholders on the proposed acquisition
of(cid:632)Singapore Press Holdings ex-Media
(SPH). The two events, both of which were
hosted by SIAS, drew a total of close to
200(cid:632)participants. All materials presented
on(cid:632)these occasions were also made
available on(cid:632)the SGXNet and the Company’s
website in a timely manner, to ensure fair
disclosure of information for the benefit of
all shareholders.
ANNUAL GENERAL MEETING AND
EXTRAORDINARY GENERAL MEETING
In 2021, the Company held its AGM, and
separately convened an extraordinary
general meeting (EGM) to seek shareholders’
approval for(cid:632)the(cid:632)proposed acquisition of
SPH by(cid:632)electronic means pursuant to the
COVID-19 (Temporary Measures) (Alternative
Arrangements for Meetings for Companies,
Variable Capital Companies, Business Trusts,
Unit Trusts and Debenture Holders) Order
2020 (“COVID-19 (Temporary Measures)”).
Alternative arrangements relating to
attendance at the general meetings via
electronic means (including arrangements
by which the meeting can be electronically
accessed via live audio-visual webcast or
live audio-only stream), submission of
questions to the Chairman of the meetings
in(cid:632)advance of the general meetings,
addressing of substantial and relevant
questions at, or prior to, the general meetings
and voting by appointing the Chairman of
the meetings as proxy at the general meetings,
were put in place for the general meetings.
The CEO of the Company gave presentations
at the AGM and EGM, providing further
elaboration to shareholders. In addition,
real-time electronic communication for
questions and answers was implemented
at(cid:632)the EGM. The notices of meetings and
Keppel Corporation Limited
99
documents relating(cid:632)to the businesses of
the(cid:632)general meetings (which included the
rules governing the AGM(cid:632)and EGM) were
circulated to shareholders by electronic
means via publication on SGXNet and the
Company’s website. Further, responses
to(cid:632)questions submitted by shareholders
prior to the meetings were uploaded to
SGXNet and the Company’s website
prior(cid:632)to(cid:632)the events and addressed at the
general meetings.
The COVID-19 (Temporary Measures) will
continue to apply to the Company at the
upcoming AGM to be held in respect of
FY(cid:632)2021. Prior to the pandemic and the
COVID-19 (Temporary Measures) coming
into effect, the Company’s general meetings
were generally held physically in central
locations which are easily accessible
by(cid:632)public transportation, ensuring that
shareholders have the opportunity to
participate effectively and vote at such
meetings. Shareholders are informed of
the(cid:632)meetings through notices published in
the newspapers and via SGXNet, and reports
or circulars sent or made available to all
shareholders. If any shareholder is unable to
participate at the physical meeting, he/she
is(cid:632)allowed to appoint up to two proxies
to(cid:632)vote on his/her behalf at the meeting
through proxy forms sent in advance.
Specified intermediaries, such as banks and
capital markets services licence holders
which provide custodial services, may appoint
more than two proxies. This will enable
indirect investors, including CPF investors,
to(cid:632)be appointed as proxies to participate
in(cid:632)the physical meetings. Such indirect
investors, where so appointed, will have the
same rights as direct investors to vote at
the(cid:632)physical meeting.
To ensure transparency, the Company
conducts electronic poll voting for
shareholders/proxies present at the
physical(cid:632)meeting for all the resolutions
proposed at the general meeting.
Shareholders are also informed of
the(cid:632)rules,(cid:632)including voting procedures,
governing such general meetings. Votes
cast for and against and the respective
percentages, on each resolution will be
displayed live to shareholders/proxies
immediately after each poll conducted.
Regardless whether a general meeting is
held physically or via electronic means,
shareholders are invited to put forth any
questions they may have on the motions
to(cid:632)be debated and decided upon, and vote
on the resolutions at general meetings.
Each(cid:632)distinct issue is proposed as a separate
resolution. Such resolutions include matters
of significance to shareholders such as,
where applicable, proposed amendments
to(cid:632)the Constitution, the authorisation to
issue additional shares, the transfer of
significant assets, re-election of directors,
and the remuneration of NEDs. The rationale
for the resolutions to(cid:632)be proposed at
the(cid:632)meeting is set out in(cid:632)the notices
to(cid:632)the(cid:632)meeting or their accompanying
appendices. However, where(cid:632)the issues
are(cid:632)interdependent and linked so as
to(cid:632)form(cid:632)one significant proposal,
the(cid:632)Company may propose “bundled
resolutions” and will(cid:632)set out the reasons
and(cid:632)material implication in the notices
to(cid:632)the(cid:632)meeting or its accompanying
appendices. A scrutineer will be appointed
to(cid:632)count and validate the(cid:632)votes cast at
the(cid:632)meetings. The total number of votes
cast for(cid:632)or against the(cid:632)resolutions and
the(cid:632)respective percentages are also
announced(cid:632)in a timely(cid:632)manner after
the(cid:632)general meeting via(cid:632)SGXNet. Each
share(cid:632)is entitled to one(cid:632)vote.
Where possible, all directors will attend
the(cid:632)general meetings. The chairmen of
the(cid:632)Board and each board committee are
required to be present to address questions
at general meetings. External auditors are
also present at such meetings to assist the
directors to address shareholders’ queries,
if(cid:632)necessary.
The Constitution of the Company allows
for(cid:632)absentia voting at general meetings.
However, the Company is not implementing
absentia voting methods such as voting
via(cid:632)mail, email or fax until security,
integrity(cid:632)and other pertinent issues are
satisfactorily resolved.
The Company Secretaries prepare
minutes(cid:632)of general meetings, which
incorporate substantial and relevant
comments or queries from shareholders
relating to the agenda of the meeting
and(cid:632)responses from the Board and
management. These minutes are available
to shareholders upon their requests.
All(cid:632)minutes of general meetings will be
published on the Company’s website as
soon as practicable. Minutes of the AGM
and EGM held in 2021 were published on
both the Company’s website and SGXNet
within one(cid:632)month from the meeting.
The Company is committed to rewarding
shareholders fairly and sustainably, while
balancing the payment of dividends with
its(cid:632)capital requirements to ensure that the
best interests of the Company are served.
While it does not have a formal dividend
policy, the Company has a consistent
track(cid:632)record for distributing about 40 to
50%(cid:632)of its annual net profit as dividends.
Any(cid:632)payment of interim dividend or,
upon(cid:632)receipt of shareholders’ approval at
AGMs(cid:632)final dividend, will be paid to all
shareholders in an equitable and timely
manner. For FY 2021, the Company will
be(cid:632)paying out a total cash dividend of
33(cid:632)cents per share to shareholders.
SECURITIES TRANSACTIONS
INSIDER TRADING POLICY
The Company has a formal Insider Trading
Policy and Guidelines on Disclosure of
Dealings in Securities on dealings in the
securities of the Company and its listed
subsidiaries and associated companies,
which sets out the implications of insider
trading and guidance on such dealings,
including the prohibition on dealings with
the(cid:632)Company’s securities on short-term
considerations. The policy and guidelines
have been distributed to the Group’s
directors and officers.
Pursuant to Rule 1207(19)(c) of the
Listing(cid:632)Manual, the Company and its
officers(cid:632)should not deal in the Company’s
securities during the period commencing
two weeks before the announcement of
the(cid:632)Company’s financial statements for
each(cid:632)of the first three quarters of its
financial year and one month before
the(cid:632)announcement of the Company’s
full(cid:632)year financial statements (if the
Company announces its quarterly financial
statements), or one month before the
announcement of the Company’s half
year(cid:632)and full year financial statements
(if(cid:632)the(cid:632)Company does not announce
its(cid:632)quarterly financial statements)
(the(cid:632)“Embargo Period(s)”).
The Company had issued circulars to its
directors and officers informing them that
the Company and its officers must not deal
in listed securities of the Company during
the applicable Embargo Period(s), and if
they(cid:632)are in possession of unpublished
price-sensitive information. Directors and
CEO are also required to report their dealings
in the Company’s securities within two
business days.
Annual Report 2021
GOVERNANCE
100
CORPORATE GOVERNANCE
APPENDIX 1
BOARD COMMITTEES –
RESPONSIBILITIES
A. AUDIT COMMITTEE
1.1 Review financial statements and
announcements relating to financial
performance, and significant financial
reporting issues and judgments
contained in them, for better assurance
of the integrity of such statements
and announcements.
1.2 Review and report to the Board at
least(cid:632)annually on the adequacy and
effectiveness of the Group’s internal
controls, including financial, operational,
compliance and information technology
controls, and risk management in
relation to financial reporting and other
financial-related risks (such review
can(cid:632)be carried out internally or with
the(cid:632)assistance of any competent
third(cid:632)parties).
1.3 a.
Review the Board’s comment on
the adequacy and effectiveness of
the Group’s internal control systems,
and state whether it concurs with
the Board’s comments.
b.
Where there are material
weaknesses identified in the
Group’s internal control systems,
to consider and recommend the
necessary steps to be taken to
address them.
1.4 Review the assurance from the CEO
and CFO on the financial records and
financial statements and the assurance
and steps taken by the CEO and other
key management personnel who are
responsible, regarding the adequacy
and effectiveness of the Group’s
internal control systems.
1.5 Review audit plans and reports of the
external auditors and internal auditors
and consider the effectiveness of
actions taken by management on the
recommendations and observations.
1.6 Review the adequacy, effectiveness
and independence of the external audit
function and internal audit function,
at least annually and report the Audit
Committee’s assessment to the Board.
1.7 Review the scope and results of the
external audit function and internal
audit function, at least annually.
1.8 Review the nature and extent of
1.18 Review the Audit Committee’s terms
non-audit services performed by the
external auditors, to ensure their
independence and objectivity.
of reference annually and recommend
any proposed changes to the Board
for approval.
1.9 Meet with external auditors (without
the presence of management and
internal auditors) and internal auditors
(without the presence of management
and external auditors), at least annually.
1.10 Make recommendations to the Board
on the proposals to the shareholders on
the appointment, re-appointment and
removal of the external auditors, and
approve the remuneration and terms of
engagement of the external auditors.
1.11 Ensure that the internal audit function is
adequately resourced and staffed with
persons with the relevant qualifications
and experience, and has appropriate
standing within the Company,
at(cid:632)least annually.
1.12 Decide on the appointment, termination,
evaluation and remuneration of the
Head of Internal Audit, or the accounting/
auditing firm or corporation to which
the internal audit function is outsourced.
1.13 Review the whistle-blower policy and
1.19 Perform such other functions as
the(cid:632)Board may determine.
1.20 Ensure that the Head of Internal
Audit(cid:632)and external auditors
have(cid:632)direct(cid:632)and unrestricted
access(cid:632)to(cid:632)the(cid:632)Chairman of(cid:632)the
Audit Committee.
1.21 Sub-delegate any of its powers within
its terms of reference as listed above
from time to time as the Audit
Committee may deem fit.
B. BOARD RISK COMMITTEE
1.1 Obtain recommendations on
risk(cid:632)tolerance and strategy from
Management, and where appropriate,
report and recommend to the Board
for its determination the nature
and(cid:632)extent of significant risks
which(cid:632)the Group overall may take
in(cid:632)achieving its strategic objectives
and(cid:632)the overall Group’s levels of
risk(cid:632)tolerance, risk parameters and
risk(cid:632)policies.
the Company’s procedures for detecting
and preventing fraud, and other
arrangements for concerns about
possible improprieties in financial
reporting or other matters to be safely
raised, independently investigated and
appropriately followed up on.
1.2 Review and discuss, as and when
appropriate, with Management the
Group’s risk governance structure
and(cid:632)framework including risk policies,
risk strategy, risk culture, risk
assessment, risk mitigation and
monitoring processes and(cid:632)procedures.
1.14 Report significant matters raised through
the whistle-blowing channel to the Board.
1.15 Review interested party transactions to
ensure they are on normal commercial
terms and are not prejudicial to the
interests of the Company or its minority
shareholders and determine methods
or procedures for assessing that the
transaction prices are adequate for
transactions to be carried out on normal
commercial terms, and that they will
not prejudice the company or its
minority shareholders.
1.16 Investigate any matters within the
Audit Committee’s purview, whenever
it deems necessary.
1.17 Report to the Board on material matters,
findings and recommendations.
1.3 Review the Information Technology
(“IT”) governance and cyber security
framework to ascertain alignment
with(cid:632)business strategy and Group
risk(cid:632)tolerance including monitoring
the(cid:632)adequacy of IT capability
and(cid:632)capacity to ensure business
objectives(cid:632)are well-supported with
adequate measures to safeguard
corporate information, operating
assets, and effectively monitor
the(cid:632)performance, quality and integrity
of IT service delivery.
1.4 Receive and review quarterly reports
from Management on the Group’s
risk(cid:632)profile and major risk exposures,
and the steps taken to monitor, control
and mitigate such risks to ensure
that(cid:632)such risks are managed within
acceptable levels.
Keppel Corporation Limited
101
1.5 Review the Group’s risk management
capabilities including capacity,
resourcing, systems, training,
communication channels as well as
competencies in identifying and
managing new risk types.
1.6 Receive and review updates from
management to assess the adequacy
and effectiveness of the Group’s
compliance framework in line
with(cid:632)relevant laws, regulations
and(cid:632)best(cid:632)practices.
1.7 Through interactions with the
Head(cid:632)of(cid:632)Group Risk & Compliance,
review and oversee performance
of(cid:632)the(cid:632)Group’s implementation of
compliance programmes.
1.8 Review and monitor the Group’s
approach to ensuring compliance with
regulatory commitments, including
progress of remedial actions
where(cid:632)applicable.
1.9 Review the adequacy, effectiveness
and independence of the Group’s Risk
and Compliance function, at least
annually, and report the Committee’s
assessment to the Board.
1.10 Review and monitor management’s
responsiveness to the risks, matters
identified and recommendations of the
Group Risk & Compliance function.
1.11 Provide timely input to the Board on
critical risk and compliance issues,
material matters, findings and
recommendations.
1.12 Review management’s proposals
in(cid:632)respect of strategic transactions
and new risk focused products,
focusing, in particular, on the risk
and(cid:632)compliance aspects and
implications of the proposed action
for(cid:632)the risk tolerance of the Group,
and(cid:632)make recommendations to
the(cid:632)Board.
1.13 Review the assurance and steps taken
by the CEO and other key management
personnel for their relevant areas of
responsibilities, regarding the adequacy
and effectiveness of the Group’s risk
management system.
1.14 Review and report to the Board annually
on the adequacy and effectiveness
of the Group’s risk management
systems, including financial,
operational, compliance and
information technology controls.
1.15 a.
Review the Board’s comment
on(cid:632)the adequacy and
effectiveness of the Group’s
risk(cid:632)management systems and
state whether it(cid:632)concurs with
the(cid:632)Board’s comments.
b.
Where there are material
weaknesses identified in the
Group’s risk management
systems, to consider and
recommend the necessary steps
to be taken to address them.
1.16 Ensure that the Head of Group Risk &
Compliance function have direct and
unrestricted access to the Chairman
of(cid:632)the Committee.
1.17 Perform such other functions as the
Board may determine.
one-third, or (if Chairman is
not(cid:632)independent) a majority of
independent directors.
1.5 Assess, where a director has
other listed company board
representation and/or other principal
commitments, whether the director
is able to and has been adequately
carrying out his duties as director
of the Company.
1.6 Recommend to the Board the process
for the evaluation of the performance
of the Board, the board committees
and individual directors, and propose
objective performance criteria to
assess the effectiveness of the Board
as a whole, the board committees and
the contribution of the Chairman and
each director.
1.7 Annual assessment of the effectiveness
of the Board as a whole, the board
committees and the contribution of
the Chairman and individual directors.
1.18 Review the Committee’s terms of
1.8 Review the succession plans for the
reference annually and recommend
any proposed changes to the Board.
1.19 Sub-delegate of its powers within its
terms of reference as listed above
from time to time as the Committee
may deem fit.
C. NOMINATING COMMITTEE
1.1 Recommend to the Board the
appointment and re-appointment
of(cid:632)directors (including alternate
directors, if any).
1.2 Annual review of the structure and
size(cid:632)of the Board and board
committees, and the balance and
mix(cid:632)of skills, knowledge, experience,
and other aspects of diversity such
as(cid:632)gender and age.
1.3 Recommend to the Board a Board
Diversity Policy (including the
qualitative, and measurable quantitative,
objectives (as appropriate) for achieving
board diversity), and conduct an
annual review of the progress towards
achieving these objectives.
1.4 Annual review of the independence
of(cid:632)each director, and to ensure
that(cid:632)the(cid:632)Board comprises
(a) majority NEDs, and (b) at least
Board (in particular, the Chairman),
the CEO and other key management
personnel.
1.9 Review talent development plans.
1.10 Review the training and professional
development programmes for
Board members.
1.11 Review and, if deemed fit, approve
recommendations for nomination
of candidates as nominee director
(whether as chairman or member)
to the board of directors of investee
companies which are:
a.
listed on the Singapore Exchange
or any other stock exchange;
b. managers or trustee-managers
of(cid:632)any collective investment
schemes, business trusts, or any
other trusts which are listed on the
Singapore Exchange or any other
stock exchange; and
c. parent companies of the
Company’s core businesses
which are unlisted.
1.12 Report to the Board on material
matters and recommendations.
Annual Report 2021
GOVERNANCE
102
CORPORATE GOVERNANCE
1.13 Review the Nominating Committee’s
terms of reference annually and
recommend any proposed changes
to the Board for approval.
1.14 Perform such other functions as the
retain and motivate the directors
to provide good stewardship of the
Company and key management
personnel to successfully manage
the Group for the long term.
Board may determine.
1.6 Set performance measures
1.15 Sub-delegate any of its powers
within its terms of reference as listed
above, from time to time as this
Committee may deem fit.
D. REMUNERATION COMMITTEE
1.1 Review and recommend to the
Board a framework of remuneration
for Board members and key
management personnel, and the
specific remuneration packages
for each director as well as for
the key management personnel,
including review of all long-term
and short-term incentive plans,
with a view to aligning the level
and structure of remuneration
to the Group’s long-term strategy
and performance.
1.2 Consider all aspects of remuneration
to ensure that they are fair, and
review the Company’s obligations
arising in the event of termination
of the executive directors’ and key
management personnel’s contracts
of service, to ensure that such
clauses are fair and reasonable
and(cid:632)not overly generous.
1.3 Consider whether directors should
and determine targets for any
performance-related pay schemes.
1.7 Administer the Company’s Restricted
Share Plan and Performance Share Plan
(collectively, the “KCL Share Plans”),
in accordance with the rules of
the KCL Share Plans.
1.8 Report to the Board on material
matters and recommendations.
1.9 Review the Remuneration Committee’s
terms of reference annually and
recommend any proposed changes
to the Board.
1.10 Perform such other functions as the
Board may determine.
1.11 Sub-delegate any of its powers
within its terms of reference
as listed above, from time to time
as the Remuneration Committee
may deem fit.
Save that a member of this Committee
shall not be involved in the deliberations in
respect of any remuneration, compensation,
award of shares or any form of benefits to
be granted to him.
be eligible for benefits under long-term
incentive schemes (including
weighing the use of share schemes
against the other types of long-term
incentive scheme).
BOARD SAFETY COMMITTEE
E.
1.1 Ensure there is a set of Group HSE
policies and standards to guide
HSE operation and performance
across the Group.
1.4 Ensure a process is in place to have
fatalities and other major incidents
investigated by an independent and
competent team.
1.5 Review serious accident and near
miss incident investigation reports
in a timely manner to understand
underlying root causes and introduce
Group wide initiatives or remedial
measures where appropriate.
1.6 Ensure that each Group company
complies with HSE legislation in the
country in which it operates as a
minimum and review any emerging or
new legislations that may potentially
impact the Group company.
1.7 Keep abreast of developments
in the HSE world, discuss such
developments and best practices
and(cid:632)consider the desirability of
implementation in the Group.
1.8
Introduce actions to enhance
safety awareness and culture within
the Group.
1.9 Ensure that the safety functions in
Group companies are adequately
resourced (in terms of number,
qualification and budget) and have
appropriate standing within
the organisation.
1.10 Review the major changes to HSE
risk profile of each Group company
that has changed or will change as a
result of new business, new market,
new product, etc. and the steps
taken to monitor, control and mitigate
such risks.
1.11 Consider management’s proposals
1.4 Review the ongoing appropriateness
1.2 Monitor HSE performance of
on safety-related matters.
and relevance of the remuneration
policy to ensure that the level and
structure of the remuneration are
appropriate and proportionate to the
sustained performance and value
creation of the Company, taking into
account the strategic objectives
of the Group.
the(cid:632)Group and the SBUs, analyse
trends and accident root causes,
and recommend or propose Group
wide initiatives for improvement
where appropriate to ensure
a robust HSE management system
is maintained.
1.12 Carry out such investigations into
safety-related matters as the
Committee deems fit.
1.13 Report to the Board on material matters,
findings and recommendations.
1.5 Monitor the level and structure of
remuneration for directors and
key management personnel relative
to the internal and external peers
and competitors to ensure that the
remuneration is appropriate to attract,
1.3 Structure an audit programme
of SBU HSE management
programme to verify effectiveness
and use its resources to lead
the execution of such audits,
drawing additional resources from
the line where needed.
1.14 Perform such other functions as the
Board may determine.
1.15 Sub-delegate any of its powers within
its terms of reference as listed above
from time to time as the Committee
may deem fit.
Keppel Corporation Limited
103
NATURE OF DIRECTORS’ APPOINTMENTS AND MEMBERSHIP ON BOARD COMMITTEES
The Board currently has nine members, the majority of whom are non-executive and independent and each board committee (except for Board Safety
Committee) comprise at least three members, a majority of whom (including the chairman) are non-executive and independent. The current compositions
of the board committees are as follows:
Director
Audit Committee
Nominating Committee
Remuneration Committee
Board Risk Committee
Board Safety Committee
Committee Membership
Danny Teoh
Chairman/Non-Executive and
Non-Independent Director
Loh Chin Hua
Executive Director
Till Vestring
Lead Independent Director
Veronica Eng
Independent Director
Jean-François Manzoni
Independent Director
Teo Siong Seng
Non-Executive and
Non-Independent Director
Tham Sai Choy
Independent Director
Penny Goh
Independent Director
Shirish Apte
Independent Director
–
–
–
Member
Member
–
–
Member
Chairman
–
–
–
Member
–
–
Chairman
–
–
Chairman
Member
Member
Chairman
Member
–
–
–
–
–
–
–
–
–
–
Member
Member
Member
Member
Member
–
–
–
Chairman
–
–
–
BOARD ASSESSMENT
EVALUATION PROCESSES FOR FY 2021
Each Board member was required to complete
evaluation questionnaires on the performance
of the Board, board committees and individual
directors (including the Board Chairman).
The Chairman of the Nominating Committee
(“NC”) also conducted one-on-one interviews
with each director. Based on the feedback,
the NC Chairman prepared a consolidated
report and briefed the Board Chairman
on(cid:632)the report. Thereafter, NC Chairman
presented the report to the Board for
discussion on the changes which should
be(cid:632)made to help the Board discharge its
duties more effectively. The NC Chairman
will in consultation with the Board
Chairman(cid:632)thereafter meet with the directors
individually, where necessary, to provide
feedback to their respective board
performance with a view to improving their
board performance and shareholder value.
Performance Criteria
The performance criteria for the Board
were(cid:632)in respect of the board size, board
and(cid:632)board committee composition, board
independence, board processes, board
information and accountability, standards
of(cid:632)conduct, board performance in relation
to(cid:632)discharging its principal functions
and(cid:632)ensuring the integrity and quality
of(cid:632)financial reporting to stakeholders.
The performance criteria for the board
committee were in respect of the size,
composition and performance in relation
to(cid:632)discharging their responsibilities set out
in(cid:632)their respective terms of reference.
The performance criteria of the executive
director were categorised into four segments;
namely, (1) interactive skills (under which
factors as to whether the director works well
with other directors, open to/welcomes
comments/questions and responsive to
comments/questions are taken into account);
(2) knowledge (under which factors as to the
director’s industry and business knowledge,
whether he provides valuable inputs,
his(cid:632)understanding of finance and accounts,
and his knowledge of the company and its
strategies are taken into consideration);
(3) director’s duties (under which factors
as(cid:632)to whether the director provides insights
for the Company’s day-to-day operation,
whether the director takes his role of director
seriously and works to further improve his/
her own performance, whether the director
listens and discusses objectively, whether
the director provides management’s
view(cid:632)without undermining management
accountability and whether he assists
to(cid:632)inform NEDs of pertinent issues or
developments are taken into consideration);
and (4) availability (under which the director
is available when needed, and his/her
informal contribution via e-mail, telephone,
written notes etc. are considered).
The performance criteria of each NED
(including the Chairman) were categorised
into four 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 and business knowledge,
functional expertise, whether he/she
provides valuable inputs, his/her ability
to(cid:632)analyse, communicate and contribute
to(cid:632)the productivity of meetings, and
his/her understanding of finance and
accounts, are(cid:632)taken into consideration);
(3) director’s duties (under which factors
as to the director’s board committee work
contribution, whether the director takes his/
her role of director seriously and works to
further improve his/her own performance,
whether he/she listens and discusses
objectively and exercises independent
judgment, meeting preparation and whether
he/she constructively challenges management
and helps develop proposals on strategy are
taken into consideration); and (4) availability
(under which the director’s attendance at
board and board committee meetings,
whether he/she is available when needed,
and his/her informal contribution via e-mail,
telephone, written notes etc. are considered).
Annual Report 2021
GOVERNANCE
104
CORPORATE GOVERNANCE
KEPPEL WHISTLE-BLOWER POLICY
Keppel Whistle-Blower Policy (the “Policy”)
took effect on 1 September 2004 and was
enhanced on 15 February 2017, 1 May 2019
and 1 November 2021 to encourage
reporting in good faith of suspected
Reportable Conduct (as defined below).
The(cid:632)Policy clearly defines and centralises
processes through which such reports may
be made with confidence that employees
and other persons making such reports will
be treated fairly and, to the extent possible,
protected from reprisal.
Reportable Conduct refers to any act or
omission by a Group company director,
officer, employee, or a third party that
provides services or engages in business
activities on behalf of a Group company,
which occurred in the course of his or her
work (whether or not the act is within the
scope of his or her employment) which in
the view of a Whistle-Blower acting in good
faith, is:
a. dishonest, including but not limited
to(cid:632)theft or misuse of resources
within(cid:632)the Group;
fraudulent;
b.
c. corrupt;
d.
e. other serious improper conduct;
f. an unsafe work practice; or
g. any other conduct which may
illegal;
cause(cid:632)financial or non-financial loss
to(cid:632)the Group or damage to the
Group’s reputation.
A person who files a report or provides
evidence which he or she knows to be false,
or without a reasonable belief in the truth
and accuracy of such information, will not
be protected by the Policy and may be
subject to administrative and/or disciplinary
action including termination of employment
or other contract, as the case may be.
Similar actions may be taken against any
person who subjects (i) a person who
has(cid:632)made or intends to make a report in
accordance with the Policy, or (ii) a person
who was called or may be called as a witness,
to any form of reprisal which would not have
occurred if he or she did not intend to or had
not made the report or be a witness.
The General Manager (Group Internal Audit)
is the Receiving Officer for the purposes of
the Policy and is responsible for the
administration, implementation and
oversight of ongoing compliance with the
Policy. She reports directly to the Audit
Committee (“AC”) Chairman.
Keppel Corporation Limited
WHISTLE-BLOWER REPORTING MECHANISM
SUPERVISOR
RECEIVING OFFICER
AC CHAIRMAN
1
2
3
4
5
EMPLOYEE
Reporting Channels
NON-EMPLOYEE
REPORTING MECHANISM
Whistle-Blowers may report a suspected
Reportable Conduct via the independently
managed Whistle-blower reporting channels
that the Group has established. There is an
email hotline (kpmgethicsline@kpmg.com)
and local toll-free numbers for Singapore,
Brazil, China, USA, Vietnam, Indonesia,
Philippines, Australia, the UK and Germany.
Manning of the whistle-blower hotline has
been outsourced to a third party (KPMG)
and provides for reporting in the languages
listed above. KPMG also maintains the
aforementioned email hotline and an on-line
portal, the link to which is available in the
“Contact Us” section of the Company’s
website at www.kepcorp.com. Reports can
also be made directly to the Receiving
Officer or the AC Chairman.
The Policy emphasises that information
disclosed should be as precise as possible
to allow for proper assessment of the
nature, extent and urgency of preliminary
investigative procedures to be undertaken.
INVESTIGATION
Every Protected Report (referring to a report
made in good faith that discloses suspected
Reportable Conduct) received will be
assessed by the Receiving Officer, who
will(cid:632)exercise her own discretion or in
consultation with the Investigation Advisory
Committee, make recommendations to the
AC Chairman. Where the circumstances
warrant an investigation, the AC Chairman or
the AC (as the case may be) and the
Investigation Advisory Committee (if
consulted) will use their respective best
endeavours to ensure that there is no
conflict of interests on the part of any
person involved in the investigations.
The(cid:632)Investigation Advisory Committee
(comprising representatives from each of
the Group Human Resources, Group Legal
and Group Risk & Compliance departments,
or such other representatives as the AC
may(cid:632)determine) assists the AC Chairman
with overseeing the investigation process
and any matters arising therefrom.
The Receiving Officer, in consultation
with(cid:632)the Investigation Advisory Committee,
will prepare a report on her findings including
recommendations on any corrective or
remedial actions to be taken, and such
report shall be submitted to the AC(cid:632)Chairman
upon the conclusion of the investigation into
any Reportable Conduct. The AC Chairman
(whether in the exercise of(cid:632)his own discretion
or in consultation with the AC) shall determine
the adequacy of corrective or remedial
actions proposed (if(cid:632)any).
Identities of Whistle-Blowers, participants
of(cid:632)the investigations and the Investigation
Subject(s) will be kept confidential to the
extent possible.
NO REPRISAL
No person will be subject to any reprisal
(such as any detrimental or unfair treatment)
for(cid:632)having made a report in good faith in
accordance with the Policy or having
participated in an investigation.
Any reprisal suffered may be reported to
the(cid:632)Receiving Officer (who shall refer the
matter to the AC Chairman) or directly to the
AC Chairman. The AC Chairman shall review
the(cid:632)matter and determine the appropriate
actions to be taken.
APPENDIX 2
Rule 720(6) of the Listing Manual of the SGX-ST
The information required under Rule 720(6) read with Appendix 7.4.1 of the Listing Manual in respect of Director whom the Company is
seeking re-election by shareholders at the upcoming AGM to be held in 2021 is set out below.
105
Name of Director
Teo Siong Seng
Tham Sai Choy
Date of Appointment
1 November 2019
1 November 2019
2 June 2020
2 June 2020
67
Singapore
62
Singapore
Shirish Apte
1 July 2021
N.A.
69
Singapore
Loh Chin Hua
1 January 2014
23 April 2019
60
Singapore
The process for the
re-nomination of director
to the Board, is set out in
page 81 of this Annual Report
The process for the
re-nomination of director
to the Board, is set out in
page 81 of this Annual Report
The process for the
re-nomination of director
to the Board, is set out in
page 81 of this Annual Report
The process for the
re-nomination of director
to the Board, is set out in
page 81 of this Annual Report
Non-executive
Non-executive
Non-executive
Executive,
Chief Executive Officer
Non-Executive and
Non-Independent Director;
Board Safety Committee
(Chairman)
Non-Executive and
Independent Director;
Audit Committee (Chairman);
Board Risk Committee
(Member)
Non-Executive and
Independent Director;
Audit Committee (Member);
Board Risk Committee
(Member)
Executive Director and
Chief Executive Officer;
Board Safety Committee
(Member)
Degree in Naval Architecture
and Ocean Engineering from
the University of Glasgow,
United Kingdom
Working experience
and occupation(s)
during the past
10(cid:632)years
Executive Chairman /
Managing Director, Pacific
International Lines (Pte) Ltd
Chairman / Chief Executive
Officer, Singamas Container
Holdings Ltd.
Chartered Accountants
in England & Wales;
Member of the Institute of
Chartered Accountants, India
Bachelor in Property
Administration,
Auckland University;
Presidential Key Executive
MBA, Pepperdine University;
CFA® charterholder
Chairman, Citigroup Asia
Pacific Banking
– 2012 to 2014
Jan 2014 to Present:
Chief Executive Officer,
Keppel Corporation
CEO, Citigroup Asia Pacific
– 2009 to 2011
Date of last
re-appointment
(if applicable)
Age
Country of
principal residence
The Board’s
comments on this
appointment
(including rationale,
selection criteria,
and the search and
nomination process)
Whether the
appointment is
executive, and
if so, the area
of responsibility
Job Title
(e.g. Lead ID,
AC Chairman,
AC Member etc.)
Professional
qualifications
Bachelor of Arts (Honours)
in Economics, University of
Leeds, United Kingdom;
Fellow of the Institute of
Singapore Chartered
Accountants and the Institute
of Chartered Accountants
in England and Wales
Partner, KPMG in Singapore
including the following roles:
Head of Corporate Finance
– 2000 to 2005
Head of Audit
– 2005 to 2010
Managing Partner
– 2010 to 2016
Head of Audit,
KPMG in Asia Pacific
– 2007 to 2010
Chairman,
KPMG in Asia Pacific
– 2013 to 2017
Shareholding interest
in the listed issuer
and its subsidiaries
7,000 (direct interest) and
21,483 (deemed interest) in
Keppel Corporation Limited
162,570 (direct interest) in
Keppel Corporation Limited
Nil
6,014 (deemed interest)
in Keppel REIT
1 Jan 2012 to 31 Dec 2013:
Chief Financial Officer,
Keppel Corporation
19 Sep 2011 to Present:
Chairman, Alpha Investment
Partners Limited
1 May 2003 to 31 Dec 2011:
Managing Director, Alpha
Investment Partners Limited
2,949,667 (direct interest) and
38,500 (deemed interest) in
Keppel Corporation Limited
7,000 (direct interest) and
556,160 (deemed interest)
in Keppel REIT
Annual Report 2021
GOVERNANCE
106
CORPORATE GOVERNANCE
Name of Director
Teo Siong Seng
Tham Sai Choy
Shirish Apte
No
No
No
Loh Chin Hua
No
Any relationship
(including immediate
family relationships)
with any existing director,
existing executive
officer, the issuer and/or
substantial shareholder
of the listed issuer or
of any of its principal
subsidiaries
Conflict of interest
(including any
competing business)
Undertaking
(in the format set out
in Appendix 7.7)
under Rule 720(1)
has been submitted
to the listed issuer
Other Principal
Commitments
including Directorships
– Past
(for the last 5 years)
No
Yes
No
Yes
No
Yes
No
Yes
Enterprise Singapore
(Board member)
Singapore Accountancy
Commission; KPMG Group of
Companies; Singapore Institute
of Directors (Chairman);
Housing & Development Board;
Accounting and Corporate
Regulatory Authority
IHH Healthcare Berhad,
Malaysia; Acibadem
Healthcare, Turkey; Integrated
Hospitals and Healthcare Bhd;
Citi Bank Handlowy, Poland;
CG Power & Industrial Solutions;
Clifford Capital Holdings
Pte Ltd; Clifford Capital Pte Ltd;
Fortis Healthcare Limited, India
Other Principal
Commitments
including Directorships
– Present
Singamas Container
Holdings Ltd.; COSCO Shipping
Holding Co., Ltd.; COSCO
Shipping Energy Transportation
Co., Ltd.; Wilmar International
Limited; Pacific International
Lines (Pte) Ltd; PIL Pte. Ltd.;
Business China (Director);
The United Republic of
Tanzania in Singapore
(Honorary Consul)
DBS Group Holdings
Limited; DBS Bank Ltd.;
DBS Bank (China) Limited;
DBS Foundation Ltd;
EM Services Pte Ltd (Chairman);
Keppel Offshore & Marine Ltd;
Mount Alvernia Hospital;
Singapore International
Arbitration Centre; Nanyang
Polytechnic (Board member)
Commonwealth Bank of
Australia; Pierfront Capital
Mezzanine Fund Pte Ltd
(Chairman); Fullerton India
Credit Company Limited,
India (Chairman); Pierfront
Capital Fund Management
Pte. Ltd. (Chairman); KP
Management (GL) Pte. Ltd.;
KPCF Investments Pte. Ltd.;
Keppel Infrastructure Holdings
Pte. Ltd; Aviva Singlife Holdings
Pte. Ltd.; Aviva Financial
Advisers Pte. Ltd.(Chairman)
Keppel Corporation Limited
Keppel Oil & Gas Pte Ltd;
AIB Alpha Japan Fund Pte Ltd;
Keppel Capital Korea Private
Limited; Keppel Offshore &
Marine Technology Centre
Pte Ltd; Alpha Asia Macro
Trends Fund Private Limited,
Alpha Asia Macro Trends
Fund II Private Limited;
AAMTF III (Ex Secondary)
Private Limited; Keppel Land
Retail Management Pte Ltd;
Alpha Core Plus Real Estate
Fund Private Limited;
Sino-Sing Alpha Partners Ltd;
Keppel Singmarine Pte Ltd;
Singapore Business Federation;
Keppel Capital Japan Limited;
Keppel Capital China Limited.
Keppel Offshore & Marine Ltd
(Chairman); Keppel Land
Limited (Chairman); Keppel
Infrastructure Holdings Pte. Ltd.
(Chairman); Keppel Capital
Holdings Pte. Ltd. (Chairman);
Keppel Telecommunications &
Transportation Ltd (Chairman);
Keppel Care Foundation
Limited; M1 Limited (Chairman);
National University of
Singapore (Member of
Board of Trustees); Singapore
Economic Development
Board (Board Member);
EDB Investments Pte Ltd
(Board Member)
Name of Director
Teo Siong Seng
Tham Sai Choy
Shirish Apte
Loh Chin Hua
107
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
a. Whether at any time during the last 10 years,
No
an application or a petition under any bankruptcy law
of any jurisdiction was filed against him or against
a partnership of which he was a partner at the time
when he was a partner or at any time within 2 years
from the date he ceased to be a partner?
b. Whether at any time during the last 10 years,
No
an application or a petition under any law of any
jurisdiction was filed against an entity (not being
a partnership) of which he was a director or an
equivalent person or a key executive, at the time
when he was a director or an equivalent person or
a key executive of that entity or at any time within
2 years from the date he ceased to be a director or
an equivalent person or a key executive of that entity,
for the winding up or dissolution of that entity or,
where that entity is the trustee of a business trust,
that business trust, on the ground of insolvency?
c. Whether there is any unsatisfied judgment against him?
d. Whether he has ever been convicted of any offence,
in Singapore or elsewhere, involving fraud or dishonesty
which is punishable with imprisonment, or has been
the subject of any criminal proceedings (including any
pending criminal proceedings of which he is aware)
for such purpose?
e. Whether he has ever been convicted of any offence,
in Singapore or elsewhere, involving a breach of any
law or regulatory requirement that relates to the
securities or futures industry in Singapore or
elsewhere, or has been the subject of any criminal
proceedings (including any pending criminal
proceedings of which he is aware) for such breach?
f. Whether at any time during the last 10 years, judgment
has been entered against him in any civil proceedings
in Singapore or elsewhere involving a breach of any law
or regulatory requirement that relates to the securities
or futures industry in Singapore or elsewhere, or
a finding of fraud, misrepresentation or dishonesty
on his part, or he has been the subject of any civil
proceedings (including any pending civil proceedings
of which he is aware) involving an allegation of fraud,
misrepresentation or dishonesty on his part?
No
No
No
g. Whether he has ever been convicted in Singapore or
No
elsewhere of any offence in connection with the formation
or management of any entity or business trust?
h. Whether he has ever been disqualified from acting
as a director or an equivalent person of any entity
(including the trustee of a business trust), or from
taking part directly or indirectly in the management
of any entity or business trust?
No
i. Whether he has ever been the subject of any order,
No
judgment or ruling of any court, tribunal or governmental
body, permanently or temporarily enjoining him from
engaging in any type of business practice or activity?
No
No
No
No
No
No
No
No
No
Annual Report 2021
GOVERNANCE
108
CORPORATE GOVERNANCE
Name of Director
Teo Siong Seng
Tham Sai Choy
Shirish Apte
Loh Chin Hua
j. Whether he has ever, to his knowledge, been
concerned with the management or conduct,
in Singapore or elsewhere, of the affairs of:
i. any corporation which has been investigated for a
No
breach of any law or regulatory requirement
governing corporations in Singapore or elsewhere; or
ii. any entity (not being a corporation) which has been
investigated for a breach of any law or regulatory
requirement governing such entities in Singapore
or elsewhere; or
No
iii. any business trust which has been investigated
No
for a breach of any law or regulatory requirement
governing business trusts in Singapore or
elsewhere; or
iv. any entity or business trust which has been
No
investigated for a breach of any law or regulatory
requirement that relates to the securities or futures
industry in Singapore or elsewhere,
in connection with any matter occurring or arising
during that period when he was so concerned with
the entity or business trust?
No
k. Whether he has been the subject of any current or
No
past investigation or disciplinary proceedings, or has
been reprimanded or issued any warning, by the
Monetary Authority of Singapore or any other regulatory
authority, exchange, professional body or government
agency, whether in Singapore or elsewhere?
Any prior experience as a director of an issuer listed on
the Exchange?
Yes
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Yes
Yes
Yes
If yes, please provide details of prior experience.
Wilmar International
Limited
DBS Group Holdings
Limited
IHH Healthcare
Berhad
Keppel REIT
Management Limited
(as Manager of
Keppel REIT); Keppel
Land Limited; Keppel
Telecommunications
& Transportation Ltd;
KrisEnergy Ltd
If no, please state if the director has attended or will be
attending training on the roles and responsibilities of a
director of a listed issuer as prescribed by the Exchange.
Please provide details of relevant experience and the
nominating committee’s reasons for not requiring the
director to undergo training as prescribed by the
Exchange (if applicable).
N.A.
N.A.
N.A.
N.A.
Keppel Corporation Limited
109
APPENDIX 3
Summary of Disclosures of 2018 CG Code
Rule 710 of the SGX Listing Manual requires Singapore listed companies to describe their corporate governance practices with specific
reference to the 2018 CG Code in their annual reports. This summary of disclosures describes our corporate governance practices with
specific reference to the disclosure requirement under the 2018 CG Code.
Principles
Page Reference in this Report
Page Reference in this Report
BOARD MATTERS
The Board’s Conduct of Affairs
Principle 1
ACCOUNTABILITY AND AUDIT
Risk Management and Internal Controls
Principle 9
Provision 9.1
Provision 9.2
Audit Committee
Principle 10
Provision 10.1
Provision 10.2
Provision 10.3
Provision 10.4
Provision 10.5
SHAREHOLDER RIGHTS AND
RESPONSIBILITIES
Shareholder Rights and Conduct
of General Meetings
Principle 11
Provision 11.1
Provision 11.2
Provision 11.3
Provision 11.4
Provision 11.5
Provision 11.6
Engagement with Shareholders
Principle 12
Provision 12.1
Provision 12.2
Provision 12.3
MANAGING STAKEHOLDER
RELATIONSHIPS
Engagement with Stakeholders
Principle 13
Provision 13.1
Provision 13.2
Provision 13.3
Pages 110 to 113
Page 96
Pages 92 and 100
Page 92
Page 92
Page 92
Page 92
Pages 97 to 99
Pages 97 to 99
Pages 79 and 97 to 99
Page 99
Page 99
Page 99
Pages 97 to 99
Page 98
Page 98
Page 98
Page 97
Page 98
Provision 1.1
Provision 1.2
Provision 1.3
Provision 1.4
Provision 1.5
Provision 1.6
Provision 1.7
Board Composition and Guidance
Principle 2
Provision 2.1
Provision 2.2
Provision 2.3
Provision 2.4
Provision 2.5
Chairman and Chief Executive Officer
Principle 3
Provision 3.1
Provision 3.2
Provision 3.3
Board Membership
Principle 4
Provision 4.1
Provision 4.2
Provision 4.3
Provision 4.4
Provision 4.5
Board Performance
Principle 5
Provision 5.1
Provision 5.2
REMUNERATION MATTERS
Procedures for Developing
Remuneration Policies
Principle 6
Provision 6.1
Provision 6.2
Provision 6.3
Provision 6.4
Level and Mix of Remuneration
Principle 7
Provision 7.1
Provision 7.2
Provision 7.3
Disclosure on Remuneration
Principle 8
Provision 8.1
Provision 8.2
Provision 8.3
Page 78
Page 80
Page 78
Pages 81 to 97 and 100 to 102
Pages 79 and 85
Page 80
Pages 79 and 80
Pages 84 and 85
Pages 84 and 85
Pages 84 and 85
Pages 81 to 83
Page 79
Page 76
Page 76
Page 76
Pages 81 to 85 and 101
Page 81
Page 81
Pages 84 and 85
Pages 80 and 85
Page 85
Page 103
Pages 86 and 102
Page 86
Pages 86 and 102
Page 86
Pages 86 to 92
Pages 86 to 92
Pages 86 to 92
Pages 86 to 92
Page 92
Pages 86 to 92
Annual Report 2021
GOVERNANCE
RISK MANAGEMENT
110
WE UNDERTAKE ONLY APPROPRIATE AND
WELL-CONSIDERED RISKS, CONSIDERING
THEIR IMPACT TO OUR BUSINESS,
STAKEHOLDERS, AND LONG-TERM
CORPORATE SUSTAINABILITY.
Keppel adopts a balanced approach to
risk management to optimise business
returns while considering their holistic
impact on corporate sustainability.
Managing risks is an integral part of the
way in which we develop and execute
our business strategies. It is grounded
in our operating principles and belief that
a balanced and holistic risk-reward
methodology is the best approach.
This applies to all aspects of our business,
and in particular, our commitment to
environmental, social and governance
issues, and our ability to deliver long-term
value for our stakeholders.
Our Risk-Centric Culture and Enterprise Risk
Management (ERM) Framework enable
the Group to not only respond to the
dynamic business environment and shifting
business demands, but also seize new
value-added opportunities.
RISK-CENTRIC CULTURE
Mindsets and attitudes are key to effective
risk management.
ENTERPRISE RISK
MANAGEMENT FRAMEWORK
Relevant and material risk issues are
surfaced for discussion with the Board Risk
Committee (BRC) and the Board to keep
them apprised in a timely manner. Through
the BRC, the Board advises management
in(cid:632)formulating and implementing the
risk(cid:632)management framework, policies
and guidelines.
The terms of reference for the BRC are
disclosed on pages 100 and 101 of this report.
The Board has defined three risk tolerance
guiding principles for the Group which
determines the nature and extent of the
significant risks which the Board is willing
to(cid:632)take in achieving strategic objectives.
These principles are:
1. Risk taken should be carefully evaluated,
commensurate with rewards and be
in line with the Group’s core strengths
and strategic objectives;
2. No risk arising from a single area of
operation, investment or undertaking
should be so huge as to endanger
the entire Group; and
3. The Group does not condone safety
breaches or lapses, non-compliance
with laws and regulations, as well
as acts such as fraud, bribery
and corruption.
allows management and the Board to
determine the adequacy and effectiveness
of the Group’s risk management system.
The Group is cognisant of the dynamic
environment in which it operates. We
constantly enhance the framework and
systems where necessary, to ensure risk
management remains an integral part
of our daily decision-making process
and operations.
Keppel’s ERM framework, a component of
Keppel’s System of Management Controls,
provides the Group with a systematic approach
to identify and manage risks. It outlines the
requirement for each business unit (BU)
to recognise key risk areas affecting its
operations and to classify the impact and
likelihood of these risks in a register for
prioritisation and management. The ERM
framework also establishes the reporting
structure, monitoring mechanisms, processes
and tools used, as well as any policies,
standards or limits to be applied in
managing key risk areas.
Keppel’s ERM framework is also constantly
enhanced to ensure it remains relevant
in our operating environment and where
required, is tailored to the requirements of
each BU. The framework takes reference
from the Singapore Code of Corporate
Governance, the COSO Enterprise Risk
Management – Integrated Framework,
ISO 22301:2019, ISO 31000:2018 and the
Board Risk Committee Guide published
by Singapore Institute of Directors.
Keppel’s risk governance framework, set
out on pages 93 to 97 under Principle 9
(Risk Management and Internal Controls),
Management and risk teams across BUs
drive and coordinate Group-wide activities
and initiatives. These are facilitated by
TRANSPARENCY &
COMPETENCY
We promote transparency
in information sharing
and escalation of
risk-related matters,
incidents, near-misses
or(cid:632)events of interest.
Risk(cid:632)identification
and(cid:632)assessment are
embedded in key control
processes and Group-wide
surveys are conducted
periodically to assess
risk(cid:632)awareness amongst
employees.
TRAINING & COMMUNICATIONS
Training and communications support
competency across all employees and
occur through various(cid:632)forums, in-house
publications and sharing of lessons learnt.
Risk(cid:632)management is regularly reinforced
as a discipline and developed through
awareness and(cid:632)practice.
FRAMEWORK & VALUES
We are guided by the ERM
framework, core values,
mission and vision,
in(cid:632)managing risks.
RISK-CENTRIC CULTURE
LEADERSHIP & GOVERNANCE
Keppel’s Board and management are
fully(cid:632)committed to fostering a strong
risk-centric culture and consistently
partake in reviewing risks in all areas
of(cid:632)business. Key messages encouraging
prudent risk-taking in(cid:632)decision-making
and(cid:632)business processes are interwoven
into major meetings, and decision-making
to enable optimal risk management.
OWNERSHIP &
ACCOUNTABILITY
We advocate ownership and
accountability of risks across all
employees via the performance
evaluation process.
This is evident in(cid:632)our(cid:632)risk
processes which emphasise
having clear owners for(cid:632)major
risk areas.
PROCESS & METHODS
An integral aspect of
strategic(cid:632)and operational
decision-making includes
considering and managing
risks at all levels of business.
A(cid:632)key part of the process
is(cid:632)the(cid:632)identification and
assessment of risks using
the(cid:632)five-step method:
(1)(cid:632)identifying;
(2) assessing;
(3)(cid:632)mitigating;
(4) communicating; and
(5) monitoring.
Underlying the five-step
method is a(cid:632)detailed risk
definition and(cid:632)reporting
framework(cid:632)for(cid:632)risk
oversight(cid:632)by the Board
and(cid:632)management.
Keppel Corporation Limited
regular meetings to cascade risk policies
or standards, and ensure that pertinent
risks are identified, assessed and mitigated
in a timely manner. Beyond operational
activities, we continually improve our
risk processes taking reference from
the latest industry developments
and best practices.
The key risks identified for FY 2021
encapsulate our existing business
activities and the transformation and
growth initiatives under Vision 2030.
We are committed to addressing such
risks in line with our philosophy of
undertaking only appropriate and well-
considered risks to optimise returns
in a balanced and holistic manner,
while consistently delivering sustainable
long-term value to our stakeholders.
STRATEGIC RISKS
MARKET & COMPETITION
A large part of the Group’s strategic risk
includes market-driven forces, evolving
competitive landscapes, changing
customer demands and disruptive
innovation. We remain vulnerable to other
external factors including volatility in the
global economy, implications of geopolitical
developments, intense competition in
core markets and disruptive technology.
For example, the COVID-19 pandemic
continues to impact the Group’s operations
and business activities in nearly all of our
key markets. Despite the many challenges
faced by our businesses due to the
pandemic, the Group has adapted and
continued to operate resiliently in 2021.
We adjusted our strategies and responses,
and took pre-emptive mitigating actions
as required.
During the year, the Board and management
continued to oversee and coordinate the
execution of Vision 2030. As the Group
transforms and grows, we will continually
refine and enhance our risk management
policies and principles to support our
business objectives.
STRATEGIC VENTURES,
INVESTMENTS & DIVESTMENTS
We have an established process for
evaluating investment and divestment
decisions, including strategic ventures.
We ensure that such endeavours
are well monitored and aligned with the
Group’s strategic intent, investment
objectives and desired returns.
Where required, we may recalibrate some
strategies in response to the changing
business environment.
Together with the Board, the Investment
and Major Project Action Committee guides
the Group in this area to ensure that any
risks taken are considered and controlled
in a manner that exercises the spirit of
enterprise and prudence, to earn the best
risk-adjusted returns on invested capital
across our businesses.
The evaluation of risks for strategic
ventures involves rigorous due diligence,
feasibility studies and sensitivity analyses
of key assumptions and variables. Critical
factors considered include alignment with
the Group’s strategy, financial viability,
country-specific political and regulatory
developments, contractual risk implications,
as well as past lessons learnt. The Group’s
investment portfolios are constantly
monitored to ensure that the performance
of any such venture is on track to meet
its strategic intent and returns.
SUSTAINABILITY & CLIMATE CHANGE
Sustainability and climate change
encompass a broad range of key material
issues, many of which have been identified
and managed according to the Group’s
ERM framework. Sustainability and
climate-related risks and opportunities,
both physical and transitional, are
fundamental to the Group. The Group
supports the Task Force on Climate-related
Financial Disclosures and has worked
towards incorporating its recommendations
in our reporting framework. Details on
sustainability-related material issues to
the Group can be found on pages 28 to 33
of(cid:632)this report.
Under Vision 2030, we have placed
sustainability at the core of our strategy.
The Group’s Sustainability Risk Management
Framework is integrated within our ERM
framework (Figure 1) and guides the
Group on the specific processes and
methods applied in identifying, assessing
and managing sustainability-related risks
and opportunities. This covers climate
change and environmental management
considerations, as well as third-party-related
risks from vendors and suppliers. As part
of Sustainability Risk Management,
we continually assess related risks
and opportunities for the Group and
strengthen our organisational capabilities
in response. More details will be provided
in our Sustainability Report 2021, which
will be published in May 2022.
CUSTOMER & STAKEHOLDER EXPERIENCE
The Group operates in numerous
geographies and has multiple customer
touchpoints, including retail consumers in
the telecommunications, retail electricity,
e-commerce and gas businesses. Other
stakeholders include our regulators,
vendors, investors, partners, employees,
111
Figure 1
ERM FRAMEWORK
INCORPORATING SUSTAINABILITY
RISKS AND(cid:632)MATERIAL ISSUES
STRATEGIC
External environment
and(cid:632)execution of
business(cid:632)strategy
OPERATIONAL
People, processes, systems
and Health, Safety and
Environment issues
COMPLIANCE
Compliance with
laws and regulations;
license to operate
FINANCIAL
Internal financial
management and(cid:632)controls
EMERGING
Evolving or emerging
threats that affect(cid:632)business
OPPORTUNITIES
Potential areas of(cid:632)
competitive advantage
arising from various risks
and the communities in which we operate.
We place utmost importance on Customer
and Stakeholder Experience which have
direct bearing on trust and brand reputation.
As such, we consistently monitor our
products and services for safety, quality
and reliability. We respect feedback and
post-sales support, and are committed
to uphold personal data privacy, product
safety and related matters including
our responsiveness to inputs from
various stakeholders.
HUMAN RESOURCES
We place strong emphasis on attracting
and developing a deep talent pool. To ensure
we have the necessary skillsets to enable
Keppel’s next phase of growth, we leverage
both internal and external programmes.
This includes nurturing employees,
maintaining good industrial relations and
fostering a conducive work environment.
We are committed to strengthening
succession planning and bench strength,
as well as building and/or acquiring new
organisational capabilities to drive growth,
whilst maintaining our status as an
employer of choice.
Annual Report 2021
GOVERNANCE
112
RISK MANAGEMENT
We emphasise the importance of having
a risk-centric mindset across our talent
development programmes, to inculcate the
ability to identify and assess risks, develop
and implement mitigating actions, as well
as monitor residual risks in all employees.
Keppel Leadership Institute helps to
inculcate this mindset by embedding risk
management in its key leadership courses.
OPERATIONAL RISKS
PROJECT MANAGEMENT
Risk management is an integral part of
all our projects from the time of initiation
through to completion, to facilitate early
detection and proactive management of
operational risks. We adopt a systematic
assessment and monitoring process
to help manage key project risks. Special
attention is given to technically challenging
and high-value projects, including greenfield
developments, the deployment of
new(cid:632)technology and/or operations in
new geographies.
During the project execution stage, we
conduct reviews and quality assurance
programmes to address issues such as cost,
schedule and quality. Project Key Risk
Indicators are used as early warning signals
to determine if remedial actions are required
and a Project Operational Set-up Guide
detailing the key risk areas is made available
to the BUs. We also conduct knowledge-
sharing workshops to share best practices
and lessons learnt across the Group.
The above processes help to keep project
delivery on time and within budget, without
compromising on safety and quality, as well
as regulatory and contractual obligations.
HEALTH, SAFETY & ENVIRONMENT
Safety is our core value and we are
committed to upholding the highest
standards of safety. This translates into
constant vigilance to foster a strong health
safety and environment (HSE) culture
across the Group, particularly at the ground
level where the risks are greatest.
With the ongoing COVID-19 pandemic,
the Group continues to emphasise the
importance of staff health by implementing
appropriate measures and ensuring
adherence to governmental regulations,
so as to protect employees and other
stakeholders from potential exposure.
Efforts are made across BUs to manage
staff movement and ensure relevant
precautions are taken, such as the use
of personal protective equipment and
regular self-testing.
Our Zero Fatality Strategy aligns High Impact
Risk Activities standards across our global
operations. This is achieved by enhancing
Keppel Corporation Limited
the competency of employees performing
safety-critical tasks, strengthening
operational controls, establishing Root
Cause Analysis investigation standards
across the Group, as well as deploying more
proactive and leading risk indicators/metrices
to monitor HSE performance standards.
In 2021, the Group achieved our zero-fatality
target and saw improvements across our
Total Recordable Injury, Accident Frequency
and Accident Severity Rates. We also
achieved 18 awards at the Workplace Safety
and Health (WSH) Awards during the year
for exemplary safety performance,
implementation of strong WSH management
systems and efforts to create solutions that
improve workplace safety.
Environmental management is also a
critical area of focus for the Group and all
major operating sites globally are closely
monitored for compliance with relevant local
or global environmental standards.
BUSINESS & OPERATIONAL PROCESSES
The Group is connected by common shared
services and platforms which enable us to
better manage our processes and costs,
while enhancing efficiency, productivity,
compliance and controls. We have adopted
ISO standards and certifications in major
business areas to standardise processes
and align with industry best practices.
In addition, procedures relating to defect
management, operations, project control
and supply chain management are
continually refined to improve the quality
of our deliverables.
Using a risk-based approach, we continue
to improve digitalisation and automation,
and take measured steps in optimising our
processes. We also continually evaluate our
procedures, policies and authority limits to
ensure that they remain relevant.
BUSINESS CONTINUITY
We are committed to maintaining operational
resilience with Business Continuity
Management (BCM) standards that equip
us with the capability to respond effectively
to business disruptions. We are cognisant
of major risks including natural disasters,
fire, pandemics, terrorism and cyber attacks,
as well as the failure of critical equipment/
systems and industrial accidents.
The Group Incident Reporting and Crisis
Management operating standard guides
us in management and response, while
our Business Continuity Plans address
post-event mitigation. These are coordinated
by management and the Group BCM Steering
Committee, which provide sponsorship,
direction and guidance to ensure a state
of constant readiness-to-respond.
We continually extend and strengthen our
capabilities in responding to major incidents/
crises with the aim of safeguarding our
people, assets and stakeholders’ interests,
as well as Keppel’s reputation.
With COVID-19 continuing to spread
globally and the emergence of new variants,
safeguarding the health and safety of our
employees, customers and stakeholders
remain a top priority. We continue to
implement robust safe management
measures in accordance with the relevant
government regulations to minimise
the(cid:632)spread of the disease. The measures
implemented include split-team
arrangements, regular inspections to
ensure that safe management measures
are maintained, health monitoring through
Antigen Rapid Testing, regular disinfection
of high-touch points and enhanced
cleaning procedures.
We also track the vaccination status of
our workforce and we strongly encourage
those who are medically eligible to be
vaccinated. By the end of 2021, the vast
majority of Keppel’s workforce globally
had been fully vaccinated.
We also recognise cyber threats as a
significant area of potential business
disruption and maintain a Group Cyber
Incident Response plan, which references
local and international standards,
and details our response and recovery
protocols. Cyber Table Top Exercises are
also conducted regularly to validate the
effectiveness of these protocols.
We continue to monitor key disruptive threats
to our business operations and adapt our
plans to ensure operational resilience.
CYBER SECURITY, DATA PROTECTION
AND TECHNOLOGY
We recognise the importance of cyber
threats globally. Technology and data
security risks, including outsourced
services, are an integral part of the Group’s
business risk. We have established a
technology governance structure and risk
framework to address both general
technology and data security controls,
covering key areas such as cyber security,
business disruption, theft/loss of
confidential data and data integrity.
The Group has a Technology and Data
Risk Management Programme which
continuously monitors these risks.
This involves the identification, assessment
and management of critical technology
and data assets according to leading
industry guidelines such as those by the
Cyber Security Agency of Singapore and
the US National Institute of Standards and
Technology. The Programme seeks to
improve technology and data security
standards, and also to inculcate a culture
of(cid:632)cyber awareness among employees.
In 2021, the Group conducted various
initiatives to continually strengthen our
technology security, governance and
controls through the refinement and
alignment of our policies, processes and
systems, as well as the consolidation of
servers and storage. We worked closely
with industry professionals to define a
cyber security governance structure and
enhance our information technology policies
and practices to ensure alignment with
industry standards. Extensive training and
assessment exercises were conducted
throughout the year to heighten employees’
overall awareness of technology and data
threats. These include the safeguarding of
critical corporate data assets against the
loss of availability of critical systems
to disruptions.
Relating to the integration and usage of
technology, technical teams and experts
from across the Group enable us to keep
abreast of evolving technology. The response
is either calibrated at each BU or managed
strategically at the Group with the assistance
of Keppel Technology and Innovation, which
assists in driving Group-wide adoption of
new technology and innovation. The Keppel
Technology Advisory Panel, comprising
leading academics, researchers, and
advisors from a wide range of related
industries, also regularly advises the
Group in areas of technological innovation.
More information on the Group’s technology
and innovation management can be found
on pages 40 and 41 of this report.
COMPLIANCE RISKS
LAWS, REGULATIONS & COMPLIANCE
We closely monitor developments in
relevant laws and regulations of countries
where the Group operates to ensure
compliance. We recognise that non-
compliance with laws and regulations may
have a detrimental effect on both the
financials and reputation of Keppel. As such,
we are regularly updated on changes to laws
and regulations, to ensure that we can
assess our exposures and risks effectively
and expediently.
Significant risk areas, such as those relating
to potential corruption, are regularly identified,
surfaced to management and where
applicable, further assessed by the Board.
With respect to corruption, significant risk
areas include areas where external agents
are appointed for business development.
We continuously enhance our regulatory
compliance policies and procedures to
ensure that the Group maintains a high level
of compliance and ethical standard in the
way we conduct our business. We have
zero tolerance for fraud, bribery, corruption
and violation of laws and regulations.
In 2021, we continued to refine our
regulatory compliance programme,
update processes, deepen employee
understanding, and ensure that compliance
awareness and principles were well
entrenched in all activities. We also
recognise the importance of sanctions
risks owing to the escalation of trade
and other sanctions in many countries.
More details of our Compliance programme
can be found on pages 114 to 116 of
this report.
FINANCIAL RISKS
FRAUD, MISSTATEMENT OF FINANCIAL
STATEMENTS & DISCLOSURES
We maintain a strong emphasis on ensuring
that financial statements are accurate and
presented fairly in accordance with applicable
financial reporting standards and frameworks.
Regular external and internal audits are
conducted to provide assurance on the
accuracy of financial statements and
adequacy of the internal control framework
supporting the statements. Where required,
we leverage the expertise of external
auditors in the interpretation of financial
reporting standards and changes. We also
conduct regular training and education
programmes to enhance the capabilities
of(cid:632)our finance managers.
Our system of internal controls is outlined
in(cid:632)Keppel’s System of Management
Controls detailed in pages 94 and 95 of
this(cid:632)report.
FINANCIAL MANAGEMENT
Financial risk management relates to our
ability to meet financial obligations and
mitigate credit, liquidity, currency and
interest rate risks. Details can be found on
pages 190 to 201 of this report. In this area,
policies and financial authority limits are
reviewed regularly to incorporate changes in
the operating and control environment.
We are focused on financial discipline and
seek to deploy our capital to earn the best
risk-adjusted returns for shareholders, while
maintaining a strong balance sheet to seize
new opportunities.
In 2021, as global economies continued to
face pressure from the impact of COVID-19,
the Group maintained a proactive approach
to liquidity management.
113
Our procedures include the evaluation of
counterparties and other related risks
against pre-established internal guidelines.
We conduct impact assessments and stress
tests to gauge the Group’s potential financial
exposure to changing market situations.
This enables informed decision making and
the implementation of prompt mitigating
actions. We also regularly monitor our asset
concentration exposure in countries where
we operate, to ensure that our portfolio of
assets, investments and businesses is
diversified against the systemic risks of
operating in a specific geography.
PROACTIVE MANAGEMENT OF
RISKS & OPPORTUNITIES
Effective risk management is dynamic
and encompasses the evaluation of both
risks and opportunities. We recognise the
need to effectively manage risk as an
inherent part of business operations to
optimise returns. We take a business-centric
approach to managing risks, aligning
business activities with risk considerations,
and discussing issues in an open and
transparent manner, enabling us to pursue
optimal risk-return initiatives.
Our risk framework and processes are
continually evolving, to ensure that they
remain effective and relevant. This is
highly dependent on our people and
programmes, and the Group’s ability to
remain connected and vigilant to emerging
risks and opportunities. Across the Group,
we identify and review emerging risks
at all levels throughout the year. Where
necessary, these are further escalated
and discussed at various governance
committees to determine our action and/or
response. We recognise that our systems
and processes provide reasonable but not
absolute assurance, and hence continually
improve to ensure that our ability to manage
and respond to risks and opportunities
remains relevant and effective.
Annual Report 2021
GOVERNANCE
REGULATORY COMPLIANCE
114
THE TONE FOR REGULATORY COMPLIANCE
IS DRIVEN FROM THE TOP AND RESONATES
WITH OUR EMPLOYEES AT EVERY LEVEL.
WE REMAIN VIGILANT AND DETERMINED
TO BUILD A DISCIPLINED AND
SUSTAINABLE COMPANY.
We are guided by our core values and code
of conduct. We will do business the right
way and comply with all applicable laws and
regulations wherever we operate. We strive
to deliver outstanding performance, whilst
maintaining the highest ethical standards.
We are clear with our tone for regulatory
compliance, which is consistently emphasised
from the top and throughout all levels
of(cid:632)the(cid:632)Group. We do not tolerate fraud,
bribery, corruption or any violation of laws
and regulations.
STRATEGIC OBJECTIVES
In 2021, we continued to make significant
progress in embedding a robust compliance
framework and process throughout
the(cid:632)Group. We continued to implement
ISO(cid:632)37001 Anti-Bribery Management
System(cid:632)across all major business units (BU)
to(cid:632)ensure consistency and operational
effectiveness of the compliance
programme. Keppel Offshore & Marine
(Keppel O&M) achieved global certification
in 2019, while the Singapore entities of
Keppel Land and Keppel Data Centres
achieved ISO 37001 certification in 2020.
In(cid:632)2021, the Singapore entities of Keppel
Infrastructure and overseas entities of
Keppel Land, namely Vietnam, China and
Indonesia, also achieved ISO 37001
certification. Separately, the three-year
Deferred Prosecution Agreement (DPA)
with(cid:632)the US Department of Justice was
dismissed in 2021 and Keppel O&M
has(cid:632)complied with all obligations.
Our compliance framework is designed
to(cid:632)reflect the size, role and activity of
each(cid:632)BU, with appropriate compliance
control systems to effectively detect
and(cid:632)remediate potential gaps. We are
committed to forging a sustainable
compliance framework that supports
the(cid:632)Group’s growth and vision.
Compliance
Resources
Culture
Compliance,
Risk Assessment,
Review & Monitoring
REGULATORY
COMPLIANCE
FRAMEWORK
Policies &
Procedures
Key Compliance
Processes
Training &
Communications
Keppel Corporation Limited
GOVERNANCE STRUCTURE
Our Regulatory Compliance Governance
Structure is designed to strengthen
corporate governance. The Board Risk
Committee (BRC) supports the Board
in(cid:632)its(cid:632)oversight of regulatory compliance
and(cid:632)is responsible for driving the Group’s
implementation of compliance and
governance systems. Group Risk &
Compliance serves as a secretariat to
the(cid:632)BRC, assessing and reporting on
compliance risks, controls and mitigation.
The Group Regulatory Compliance
Management Committee (Group RCMC)
is(cid:632)chaired by Keppel Corporation’s CEO
and(cid:632)its members include all BU heads.
The(cid:632)Group RCMC articulates the Group’s
commitment to regulatory compliance,
and(cid:632)directs and supports the development
and implementation of overarching
compliance policies and guidelines.
The Group RCMC is supported by the
Group(cid:632)Regulatory Compliance Working Team
(Group RCWT), which is chaired by the Head
of Group Risk & Compliance. The Group
RCWT oversees the development and review
of pertinent regulatory compliance matters,
over-arching compliance policies and
guidelines for the Group. It also reviews
and(cid:632)conducts compliance training and
communication programmes.
Each BU has a dedicated Compliance Lead.
He/she is supported by the respective risk
and compliance teams and is responsible
for driving and administering the compliance
programme and agenda for the BU. This
includes providing support to BU management
with subject matter expertise, process
excellence and regular reporting to ensure
that compliance risks are effectively
assessed, managed and mitigated.
We(cid:632)continue to strengthen the Group’s
Compliance teams with additional
professional and experienced officers.
Under the direction of Group RCMC and
Group RCWT, BUs are responsible for
implementing the Keppel Group Code of
Conduct, as well as regulatory compliance
policies and procedures. They are also
responsible for ensuring that risk
assessments of material regulatory
compliance risks are conducted, and
that(cid:632)control measures are practical,
adequate and effective.
REGULATORY COMPLIANCE
FRAMEWORK
Our Regulatory Compliance Framework
focuses on critical pillars covering
the areas of culture; policies and
procedures; training and communication;
key compliance processes; compliance
risk(cid:632)assessment, reviews and monitoring,
and compliance resources.
A key aspect of the Framework is the
structure of the compliance organisation.
The Head of Group Risk & Compliance
reports directly to the Chairman of the BRC.
Similarly, the Compliance Leads of the BUs
have direct reporting lines to the respective
BU’s Audit and Risk Committees. In addition,
BU Compliance Leads report directly to the
Head of Group Risk & Compliance. This
reporting structure reinforces independence
of the function and enables management
and the Board to provide continuous, clear
and explicit support. It also lends credence
to the Group’s compliance programme.
CULTURE
Culture and mindset are critical in ensuring
effectiveness and durability of our compliance
programme. Management has a key role in
setting the right tone and walking the talk.
This helps to embed a strong and robust
regulatory compliance programme, as well
as a culture that permeates all levels.
Anti-bribery, anti-corruption and reporting
mechanisms are widely publicised in our
offices globally. We issue Group-wide
bulletins on relevant topical issues to apprise,
inform and reinforce compliance principles
and messages. Key tone-from-the-top
messages are also delivered periodically by
BU heads to employees. Compliance
moments were introduced as part of
the agenda at meetings, where pertinent
compliance topics and learnings are shared.
We continue to work on initiatives to foster
a positive compliance-centric culture.
POLICIES & PROCEDURES
KEPPEL GROUP CODE OF CONDUCT
We have a strict Keppel Group Code of Conduct
(the Code) that applies to all employees,
who are required to acknowledge and
comply with the Code.
The Code sets out important principles to
guide employees in executing their duties
and responsibilities to the highest standards
of business integrity. It encompasses
topics(cid:632)ranging from conduct in the
workplace to business conduct, including
clear provisions on prohibitions against
bribery and corruption, and conflicts of
interests amongst others. The Code is
publicly available on the Group’s and BUs’
websites. We continue to review and
enhance the Code to ensure that it stays
relevant and instructive. Appropriate
disciplinary action, including suspension/
termination of employment, is taken if an
employee is found to have violated the Code.
We have procedures to ensure that
disciplinary actions are carried out
consistently and fairly across all levels
of(cid:632)employees. All third parties who
represent(cid:632)Keppel in business dealings,
including joint venture (JV) partners,
are also required to comply with and
follow the requirements of the Code.
SUPPLIER CODE OF CONDUCT
The acknowledgement to abide by our
Supplier Code of Conduct is mandatory
for(cid:632)all key suppliers across the Group.
The(cid:632)areas covered within the Supplier Code
of Conduct include proper business conduct,
human rights, fair labour practices, stringent
safety and health standards, as well as
responsible environmental management.
WHISTLE-BLOWER POLICY
Keppel’s Whistle-Blower Policy encourages
the reporting of suspected bribery, violations
or misconduct through a clearly defined
process and reporting channel, by which
reports can be made in confidence and
without fear of reprisal. The whistle-blower
reporting channels, found on page 104 of
this report, are widely communicated and
made accessible.
PERSONAL DATA PROTECTION ACT
Guidance is provided to employees on the
Personal Data Protection Commission’s
advisory guidelines to ensure that the
Group(cid:632)complies with the requirements of
the(cid:632)Personal Data Protection Act. When
necessary and appropriate, the Group’s
guidelines are updated in accordance with
changes in privacy laws and regulations.
COMPLIANCE POLICIES
We maintain a comprehensive list of
policies(cid:632)covering compliance-related
matters including anti-bribery, gifts and
hospitality, dealing with third-party
associates (TPA), donations and
sponsorships, solicitation and extortion,
conflict of interest and insider trading,
amongst others. These policies are
reviewed(cid:632)periodically to ensure that
they(cid:632)commensurate with the activities
and(cid:632)business plans in the jurisdictions in
which the Group operates. Group policies
are applicable to all BUs. Unless the
jurisdictional regulatory requirements are
more stringent, these policies represent
the(cid:632)minimum standards for the Group.
We(cid:632)ensure all compliance policies, including
translated versions, are made available and
accessible to all employees globally.
We maintain a Group Sanctions Compliance
policy and BU-specific sanctions programme,
and continually monitor updates on
sanctions requirements.
115
Annual Report 2021
GOVERNANCE
116
REGULATORY COMPLIANCE
TRAINING & COMMUNICATIONS
Training is an essential component of
Keppel’s regulatory compliance framework.
Our programmes are tailored to specific
audiences and we leverage Group-wide
forums to reiterate key messages.
a(cid:632)quarterly news bulletin on compliance,
risk(cid:632)and control matters. In 2021, we enhanced
the news bulletin, through a segment on
lessons learnt, to reinforce awareness and
understanding of ethics and compliance
considerations amongst employees.
We have a comprehensive annual e-learning
training programme which is mandatory
for(cid:632)directors, officers and employees.
The(cid:632)content of the training covers the
Keppel Group Code of Conduct and key
principles underlying our compliance
policies. Directors, officers and employees
are required to undergo assessments
to(cid:632)successfully complete the training.
In(cid:632)addition, directors, officers and employees
are also required to formally acknowledge
their understanding of policies and declare
any potential or actual conflicts of interest.
Training on anti-bribery and the Code in
multiple languages are carried out for
industrial/general workers. Also, e-training
outlining the principles underpinning the
Group’s policies and key areas to note
when representing or acting on Keppel’s
behalf is conducted for high-risk TPAs.
We continue to refine our compliance
training programmes and curriculum.
We(cid:632)are also focused on developing
and(cid:632)tailoring training content to varying
target groups and training requirements.
Such training conducted in 2021 included
Compliance Risks in Projects and Conflict
of(cid:632)Interest.
In addition to policy-related training
programmes, we conduct training focused
on the line managers’ responsibilities in
developing the desired culture and mindset
regarding compliance. These responsibilities
include the need to establish and maintain
effective internal controls to ensure that
processes are robust, and that potential
gaps are identified and mitigated in a
timely(cid:632)manner.
Our training aims to engender positive
compliance mindsets and culture, and we
see this guiding our employees in critical
facets of their work. Training focused on
building risk and compliance competencies
are also organised to ensure that we are
apprised of changes in approaches,
best(cid:632)practices and tools.
We also leverage opportunities at various
management conferences and employee
meetings to emphasise the importance
of(cid:632)compliance.
To drive greater compliance awareness and
knowledge throughout the Group, we issue
KEY PROCESSES
DUE DILIGENCE
We continue to improve our risk-based
due(cid:632)diligence process for all TPAs who
represent the Group in business dealings,
including our JV partners, to assess the
compliance risk of the business partner.
In(cid:632)addition to background checks, the
due(cid:632)diligence process incorporates
requirements for TPAs to acknowledge
understanding and compliance with the
Code. In 2021, we enhanced the TPA policy
to consolidate and streamline compliance
due diligence requirements.
OTHER PROCESSES
As part of our ongoing review of policies
and(cid:632)procedures, we ensure compliance
oversight is embedded in key processes
including areas such as gifts and hospitality,
agent fees, donations and sponsorships,
as(cid:632)well as conflicts of interest. We also
actively seek opportunities for digitisation
and continually explore the use of data
analytics to enhance value and ensure
efficiency of our compliance processes.
RISK ASSESSMENT,
REVIEW & MONITORING
We continually develop compliance
resources and framework. This will enable
the Compliance team to conduct independent
risk assessments to identify and mitigate
key compliance risks. Regular discussions
are held with all BUs, focusing on risk
assessments including specific compliance
risks identified for each BU. Separately,
independent reviews of compliance risks are
executed within the scope of internal audits,
including reviews of the effectiveness of
key(cid:632)aspects of our compliance programmes.
These reviews provide valuable insights
and(cid:632)opportunities for us to improve our
processes and programmes.
ISO 37001 processes also assist in risk
assessment exercises, providing even
more systematic coverage and evaluations.
RESOURCES
We recognise the need for an experienced
compliance team to effectively support
compliance advisory, as well as to ensure
that compliance programmes and controls
are effectively implemented. The Board and
management are committed to ensuring
that we sustain a strong compliance function.
Keppel Corporation Limited
DIRECTORS’ STATEMENT AND FINANCIAL STATEMENTS
117
FINANCIAL REPORT
Directors’ Statement
Independent Auditor’s Report
Balance Sheets
Consolidated Profit and Loss Account
Consolidated Statement of
Comprehensive Income
Consolidated Statements of Changes
in Equity/Statement of Changes
in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Significant Subsidiaries, Associated
Companies and Joint Ventures
OTHER INFORMATION
Interested Person Transactions
Key Executives
Major Properties
Group Five-Year Performance
Value-Added Statements
Share Performance
Shareholding Statistics
Notice of Annual General Meeting
and Closure of Books
Corporate Information
Financial Calendar
118
123
132
133
134
135
138
141
207
215
216
221
227
232
233
234
235
241
242
Annual Report 2021
118
DIRECTORS’ STATEMENT
For the financial year ended 31 December 2021
The Directors present their statement 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 2021.
In the opinion of the directors, the consolidated financial statements of the Group, and the balance sheet and statement of changes in equity
of the Company as set out on pages 132 to 214, are drawn up so as to give a true and fair view of the financial position of the Group and of the
Company as at 31 December 2021, and the financial performance, changes in equity and the 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 when they fall due.
1.
Directors
The Directors of the Company in office at the date of this statement are:
Danny Teoh (Chairman)
Loh Chin Hua (Chief Executive Officer)
Till Bernhard Vestring
Veronica Eng
Jean-François Manzoni
Teo Siong Seng
Tham Sai Choy
Penny Goh
Shirish Moreshwar Apte (appointed on 1 July 2021)
2.
Audit Committee
The Audit Committee of the Board of Directors comprises four independent non-executive Directors. Members of the Committee are:
Tham Sai Choy (Chairman)
Veronica Eng
Penny Goh
Shirish Moreshwar Apte (appointed on 1 July 2021)
The Audit Committee carried out its function in accordance with the Companies Act 1967, including the following:
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Reviewed financial statements and announcements relating to financial performance, and significant financial reporting issues
and judgments contained in them;
Reviewed the adequacy and effectiveness of financial, operational, compliance and information technology controls, as well as
risk management in relation to financial reporting and other financial-related risks;
Reviewed the Board’s comment on the adequacy and effectiveness of the Group’s internal control systems, and state whether it
concurs with the Board’s comments; and if there are material weaknesses identified in the Group’s internal controls, to consider
and recommend the necessary steps to be taken to address them;
Reviewed the assurance from the CEO and CFO on the financial records and financial statements and the assurance and steps
taken by the CEO and other key management personnel who are responsible, regarding the adequacy and effectiveness of the
Group’s internal control systems;
Reviewed audit scopes, plans and reports of the Company’s external and internal auditors and considered effectiveness of
actions taken by management on the recommendations and observations;
Reviewed the adequacy, effectiveness, independence and objectivity of the external auditors and internal auditors annually;
Reviewed the scope and results of the external audit function and internal audit function;
Reviewed the nature and extent of non-audit services performed by external auditors;
Met with external auditors and internal auditors, without the presence of management, at least annually;
Ensured that the internal audit function is adequately resourced and staffed with persons with the relevant qualifications and
experience, and has appropriate standing within the Company, at least annually;
Reviewed the whistle-blower policy and the Company’s procedures for detecting and preventing fraud and other arrangements
for concerns about possible improprieties in financial reporting or other matters to be safely raised, independently investigated
and appropriately followed up on;
Reviewed interested person transactions;
Investigated any matters within the Audit Committee’s terms of reference, whenever it deemed necessary;
Reported to the Board on material matters, findings and recommendations;
Reviewed the Audit Committee’s terms of reference annually and recommended proposed changes to the Board for approval;
and
Ensured the Head of Internal Audit and external auditors have direct and unrestricted access to the Chairman of the Audit
Committee.
The Audit Committee has recommended to the Board of Directors the nomination of PricewaterhouseCoopers LLP for re-appointment
as independent auditors and approved the remuneration and terms of engagement at the forthcoming annual general meeting of the
Company.
Keppel Corporation Limited
FINANCIAL REPORT
119
3.
4.
Arrangements to enable directors to acquire shares or debentures
Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object was
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 Restricted Share Plan, KCL Performance Share Plan, KCL Restricted Share Plan 2020, KCL
Performance Share Plan 2020 and Remuneration Shares to Directors of the Company.
Directors’ interests 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 1967,
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
(No. of ordinary shares)
Danny Teoh
Loh Chin Hua
Loh Chin Hua (deemed interest)
Till Bernhard Vestring
Veronica Eng
Jean-François Manzoni
Tham Sai Choy
Penny Goh
Teo Siong Seng
Teo Siong Seng (deemed interest)
Keppel Corporation Limited
(Unvested restricted shares to be delivered after 2018)
Loh Chin Hua
(Unvested restricted shares to be delivered after 2019)
Loh Chin Hua
(Unvested restricted shares to be delivered after 2020)
Loh Chin Hua
(Contingent award of performance shares issued in 2018 to be
delivered after 2021)¹, ²
Loh Chin Hua
(Contingent award of performance shares issued in 2019 to be
delivered after 2022)¹, ³
Loh Chin Hua
(Contingent award of performance shares issued in 2020 to be
delivered after 2022)¹
Loh Chin Hua
(Contingent award of performance shares issued in 2021 to be
delivered after 2023)¹
Loh Chin Hua
(Contingent award of performance shares – Transformation Incentive Plan
issued in 2016 to be delivered after 2021)¹
Loh Chin Hua
(Contingent award of performance shares – Transformation Incentive Plan
issued in 2021 to be delivered after 2025)¹
Loh Chin Hua
Holdings At
1.1.2021
or date of
appointment,
if later
31.12.2021
21.1.2022
94,825
104,825
104,825
1,860,772
2,135,826
2,135,826
38,500
89,000
38,000
108,000
155,570
30,000
-
-
38,500
96,000
47,000
116,000
162,570
37,000
7,000
21,483
38,500
96,000
47,000
116,000
162,570
37,000
7,000
21,483
87,469
-
-
201,258
100,629
100,629
-
173,914
173,914
320,000
320,000
320,000
365,000
365,000
365,000
365,000
365,000
365,000
-
365,000
365,000
750,000
750,000
750,000
-
970,000
970,000
¹
²
³
Depending on the achievement of pre-determined performance targets, the actual number of shares to be released could range from zero to 150% of the number stated.
The performance period of the KCL PSP award issued in 2018 was extended for 1 more year as the targets of the award were set before the onset of the COVID-19
pandemic. The achievements in Year 2018, 2019 and 2021 will be used to determine the vesting level of the award at the end of the extended performance period.
The performance period of the KCL PSP award issued in 2019 was extended for 1 more year as the targets of the award were set before the onset of the COVID-19
pandemic. The achievements in Year 2019, 2021 and 2022 will be used to determine the vesting level of the award at the end of the extended performance period.
Annual Report 2021
120
DIRECTORS’ STATEMENT
5.
Share plans of the Company
The KCL Performance Share Plan (“KCL PSP”) and KCL Restricted Share Plan (“KCL RSP”) were approved by the Company’s
shareholders at the Extraordinary General Meeting of the Company on 23 April 2010.
At the Annual General Meeting held on 2 June 2020, the Company’s shareholders approved the adoption of the KCL Performance Share
Plan 2020 (“KCL PSP 2020”) and KCL Restricted Share Plan 2020 (“KCL RSP 2020”), replacing the KCL PSP and KCL RSP respectively
with effect from 2 June 2020. The KCL PSP and KCL RSP were terminated on the same day. The termination of the KCL PSP and KCL
RSP will not, however, affect awards granted prior to such termination, whether such awards have been released (whether fully or
partially) or not, which awards will continue to be valid and be subject to the terms and conditions of the KCL PSP and KCL RSP.
Details of share plans awarded under the KCL PSP, KCL PSP-Transformation Incentive Plan (“KCL PSP-TIP”), KCL PSP-M1
Transformation Incentive Plan (“KCL PSP-M1 TIP”), KCL PSP 2020, KCL PSP 2020-Transformation Incentive Plan (“KCL PSP 2020-TIP”),
KCL RSP, KCL RSP-Deferred Shares and KCL RSP 2020-Deferred Shares are disclosed in Note 3 to the financial statements and as
follows:
Contingent awards:
Date of Grant
KCL PSP
30.4.2018
30.4.2019
31.3.2020
KCL PSP-TIP
29.4.2016
28.4.2017
28.2.2020
KCL PSP-M1 TIP
17.2.20204
17.2.2020
KCL PSP 2020
30.4.2021
KCL PSP 2020-TIP
30.7.2021
Awards:
Number of Shares
Contingent
awards
granted
Adjustments
upon
release
Released
Cancelled
Balance at
1.1.2021
1,180,000
1,585,000
1,535,000
4,300,000
3,466,770
1,875,401
1,180,000
6,522,171
127,900
295,600
423,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,490,000
1,490,000
11,380,000
11,380,000
Balance at
31.12.2021
1,180,000
1,542,847
1,449,033
4,171,880
-
(42,153)
(85,967)
(128,120)
(152,153)
(123,312)
(80,000)
(355,465)
3,314,617
1,752,089
1,100,000
6,166,706
-
-
-
-
-
127,900
295,600
423,500
1,490,000
1,490,000
(240,000)
11,140,000
(240,000)
11,140,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Date of Grant
KCL RSP 2020-Deferred Shares
15.2.2021
Balance at
1.1.2021
Contingent
awards
granted
Adjustments
upon
release
Released
Cancelled
Balance at
31.12.2021
Number of Shares
-
-
5,096,700
5,096,700
(7,625)
(7,625)
(5,089,075)
(5,089,075)
-
-
-
-
4
The performance period of the 3-year KCL PSP-M1 TIP issued in 2020 was extended for 1 more year as the targets of the award were set before the onset of
the COVID-19 pandemic. The achievements in Year 2019, 2021 and 2022 will be used to determine the vesting level of the award at the end of the extended
performance period.
Keppel Corporation Limited
FINANCIAL REPORT
121
Awards released but not vested:
Date of Grant
KCL RSP-
Deferred shares
15.2.2019
18.4.2019
17.2.2020
KCL RSP 2020-
Deferred Shares
15.2.2021
Balance at
1.1.2021
1,157,727
101,731
3,409,612
4,669,070
Number of Shares
Released
Vested
Cancelled
Other
adjustments
Balance at
31.12.2021
-
-
-
-
(1,139,966)
(100,160)
(1,715,291)
(2,955,417)
(17,761)
(1,437)
(114,791)
(133,989)
-
(134)
(2,881)
(3,015)
-
-
1,576,649
1,576,649
-
-
5,089,075
5,089,075
(1,712,798)
(1,712,798)
(144,783)
(144,783)
-
-
3,231,494
3,231,494
No Director of the Company received any contingent award of Shares granted under the KCL RSP, KCL PSP, KCL RSP 2020 and KCL
PSP 2020 except for the following:
Contingent awards:
KCL RSP
Executive Director
Loh Chin Hua
KCL PSP
Executive Director
Loh Chin Hua
KCL PSP-TIP
Executive Director
Loh Chin Hua
KCL PSP 2020
Executive Director
Loh Chin Hua
KCL PSP 2020-TIP
Executive Director
Loh Chin Hua
Awards:
KCL RSP-Deferred shares
Executive Director
Loh Chin Hua
KCL RSP 2020-Deferred Shares
Executive Director
Loh Chin Hua
Contingent
awards
granted since
Aggregate Aggregate other
adjustments
since
Aggregate
awards
released since
awards commencement commencement commencement
of plans
granted
to the end of
during the
financial year
financial year
of plans
to the end of
financial year
of plans
to the end of
financial year
Aggregate
awards
not released as
at the end of
financial year
-
644,757
- (644,757)
-
- 2,250,814
(752,714) (448,100) 1,050,000
-
750,000
-
-
750,000
365,000
365,000
-
970,000
970,000
-
-
-
365,000
970,000
awards
granted since
Aggregate Aggregate other
adjustments
since
Aggregate
awards
released since
Awards commencement commencement commencement
of plans
granted
to the end of
during the
financial year
financial year
of plans
to the end of
financial year
of plans
to the end of
financial year
Aggregate
awards
not released as
at the end of
financial year
- 836,642
- (836,642)
-
260,870
260,870
-
(260,870)
-
Annual Report 2021
122
DIRECTORS’ STATEMENT
5.
Share plans of the Company (continued)
Awards released but not vested:
KCL RSP
Executive Director
Loh Chin Hua
KCL RSP-Deferred shares
Executive Director
Loh Chin Hua
KCL RSP 2020-Deferred Shares
Executive Director
Loh Chin Hua
KCL PSP
Executive Director
Loh Chin Hua
Aggregate
awards
released since
commencement
of plans
to the end of
financial year
Aggregate
awards
vested since
commencement
of plans
to the end of
financial year
Aggregate
awards
released but
not vested as
at the end of
financial year
644,757
(644,757)
-
836,642
(736,013)
100,629
260,870
(86,956)
173,914
448,100
(448,100)
-
No Director or employee received 5% or more of the total number of contingent award of Shares granted during the financial year and
aggregated to date, except for the following:
Contingent
shares granted
during the
financial year (%)
Aggregate
contingent
shares granted
to date (%)
Executive Director
Loh Chin Hua
-
-
KCL Restricted Share Plan (“KCL RSP”) and KCL Performance Share Plan (“KCL PSP”)
KCL Restricted Share Plan 2020 (“KCL RSP 2020”) and KCL Performance Share Plan 2020
(“KCL PSP 2020”)
-
8.9%
6.6%
8.9%
There are no contingent award of Shares granted to any of the Company’s controlling shareholders or their associates under the KCL
RSP, KCL RSP 2020, KCL PSP and KCL PSP 2020.
6.
Independent auditor
The independent auditor, PricewaterhouseCoopers LLP, has expressed its willingness to accept re-appointment.
On behalf of the Board
DANNY TEOH
Chairman
Singapore, 25 February 2022
LOH CHIN HUA
Chief Executive Officer
Keppel Corporation Limited
FINANCIAL REPORT
INDEPENDENT AUDITOR’S REPORT
to the Members of Keppel Corporation Limited
For the financial year ended 31 December 2021
Report on the audit of the financial statements
123
Our Opinion
In our opinion, the accompanying consolidated financial statements of Keppel Corporation Limited (“the Company”) and its subsidiaries (“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 Companies Act 1967 (“the Act”), Singapore Financial Reporting Standards (International) (“SFRS(I)s”) and International Financial Reporting
Standards (“IFRSs”) so as to give a true and fair view of the consolidated financial position of the Group and the financial position of the
Company as at 31 December 2021, the consolidated financial performance, consolidated changes in equity and consolidated cash flows of
the Group, and changes in equity of the Company for the financial year ended on that date.
What we have audited
The financial statements of the Company and the Group comprise:
•
•
•
•
•
•
•
the balance sheets of the Group and of the Company as at 31 December 2021;
the consolidated profit and loss account of the Group for the financial year then ended;
the consolidated statement of comprehensive income of the Group for the financial year then ended;
the consolidated statement of changes in equity of the Group for the financial year then ended;
the statement of changes in equity of the Company for the financial year then ended;
the consolidated statement of cash flows of the Group for the financial year then ended; and
the notes to the financial statements, including a summary of significant accounting policies.
Basis for Opinion
We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority Code of Professional Conduct and
Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements that are relevant to our audit of
financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA
Code.
Our Audit Approach
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the accompanying financial
statements. In particular, we considered where management made subjective judgments; for example, in respect of significant accounting
estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also
addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence
of bias that represented a risk of material misstatement due to fraud.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for
the financial year ended 31 December 2021. These matters were addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Annual Report 2021
FINANCIAL REPORT 124
INDEPENDENT AUDITOR’S REPORT
to the Members of Keppel Corporation Limited
Key Audit Matter
How our audit addressed the Key Audit Matter
We reviewed the term sheet with Magni and correspondences
with Sete and its authorised representatives to validate the
assumptions applied by management. We assessed the amount
and timing of gross cash inflows from Magni to the term sheet.
We also assessed the total cost of completing the construction
of the rigs through discussions with project managers and
corroborating the amounts to an approved budget plan. We
obtained management’s calculation of the discount rate used and
evaluated its reasonableness based on our understanding.
Based on our procedures, we found management’s basis of
assessment of the carrying amounts of the assets relating to
the Sete contracts to be reasonable, on the basis of the key
assumptions made by management.
The ongoing negotiations may result in significant changes to
the key assumptions and additional material provision may be
required, including adjustments to the net carrying amounts
relating to the Sete contracts.
We also considered the disclosures in the financial statements
in respect of this matter and found that the disclosures in the
financial statements in respect of this matter to be adequate.
1. Financial exposure in relation to contracts with Sete Brasil
Participacoes S.A. (“Sete”)
(Refer to Notes 2.28 (b)(ii) and 13 to the financial statements)
In October 2019, Sete’s creditors approved the Group’s Settlement
Agreement with Sete as well as a proposal by Magni Partners
(Bermuda) Ltd (“Magni”) to purchase Sete’s four subsidiaries, two
of which are special-purpose entities for two uncompleted rigs
constructed by the Group.
Whilst the implementation of the Settlement Agreement had
progressed in 2021, the construction agreements for the two
uncompleted rigs with Magni were pending as at 31 December
2021. Contract asset balances relating to these uncompleted rigs
(net of loss provision recognised in prior years) as at 31 December
2021 amounted to S$157 million.
Management estimated the net present value of the cash flows
relating to the construction contract for these two rigs with
Magni as at 31 December 2021. Arising from the assessment,
management concluded that loss provisions made in prior years
were adequate.
The assessment is made with the following key assumptions:
• Petrobras will continue to require the rigs for execution of
its business plans and will charter them at the dayrates and
tenure previously agreed with Sete;
• Magni or any other potential investor will be able to secure
financing to complete the purchase of the rigs with Sete and
complete the construction contract with the Group at the
terms previously discussed with Magni; and
The future cost of construction of the rigs are not materially
different from management’s current estimation.
•
Should the conclusion of the negotiation result in significant
changes to the key assumptions above, additional material
provision may be required.
We focused on this area because the assessment of the outcome
of the negotiation and the estimation of the recoverable value of
the assets relating to the Sete contracts requires management
judgment in which several estimates and key assumptions are
applied.
Keppel Corporation Limited
FINANCIAL REPORT
125
Key Audit Matter
How our audit addressed the Key Audit Matter
2. Recoverability of trade receivables, contract assets and
stocks (work-in-progress) in relation to Offshore and Marine
(“O&M”) business unit
(Refer to Notes 2.28(b)(ii), 2.28(b)(ix), 13, 15 and 16 to the
financial statements)
As at 31 December 2021, the Group has:
(i) Stocks under work-in-progress (“WIP”) amounting to $1,138
million;
(ii) Contract assets relating to certain rig building contracts where
the scheduled delivery dates of the rigs had been deferred and
have higher counterparty risks, amounting to $1,707 million;
and
(iii) Trade receivables amounting to $792 million where the rigs
had been delivered but the receipt of construction revenue
deferred under certain financing arrangements.
In 2021, the Group recognised $76 million of expected credit loss
against its unsecured trade receivables.
We reviewed management’s estimation of the NRV of the WIP
and estimation of the expected credit loss on contract assets on
deferred delivery and trade receivables under certain financing
arrangements.
We assessed the most significant inputs to the DCF calculations
of the NRV/VIU of the rigs and engaged our valuation expert to
review the discount rates applied. We also assessed the basis of
estimating the recoverable amounts of the unsecured receivable
adopted by the independent financial advisor. We assessed
the sensitivity of the cash flow projections with respect to the
key assumptions including discount rate and dayrates, on the
estimation of the VIU of the rigs.
We focused on this area because significant judgement and
assumptions are required in:
(i) estimating the NRV of the WIP balance; and
(ii) estimating the expected credit loss of the contract assets and
trade receivables balance.
Based on our procedures, we found management’s key
judgements and basis of estimation over the NRV of the WIP
and the recovery of contract assets on deferred delivery and
trade receivables under certain financing arrangements to be
appropriate.
In respect of the independent professional firm, the industry
expert and the financial advisor, we found that they possessed the
requisite competency and experience to assist management in the
assessment of the valuations.
We also considered the adequacy of the disclosures in the
financial statements in respect of this matter and found the
disclosures in the financial statements in respect of the key
judgements and sources of estimation uncertainty to be adequate.
For the above contract assets and secured trade receivables, in
the event that the customers are unable to fulfil their contractual
obligations, management has considered the most likely outcome
is for the Group to take possession of the rigs delivered or under
construction and charter it out to work with an operator. On this
basis, the value of the rigs delivered or under construction and
the NRV of the WIP balance is their Value-in-use (“VIU”) estimated
using the Discounted Cash Flow (“DCF”) model.
Management assessed the VIU of the rigs with the assistance of
independent professional advisors. In addition to the independent
professional firm responsible for estimating the VIU based on the
DCF model, management has also engaged a separate industry
expert to provide a view of the market outlook, assumptions and
industry parameters used as inputs to the DCF calculations. The
most significant inputs to the DCF calculations include dayrates,
cost assumptions, utilisation rates, discount rates and estimated
commencement of deployment of the assets. The valuation of
the assets based on their estimated VIUs are most sensitive to
discount rates and dayrates.
Management had also appointed an independent financial advisor
to conduct an assessment of the recoverability of unsecured
receivables from a customer and secured receivables from another
customer as at 31 December 2021.
Annual Report 2021
126
INDEPENDENT AUDITOR’S REPORT
to the Members of Keppel Corporation Limited
Key Audit Matter
How our audit addressed the Key Audit Matter
3.
Impairment assessment of exposures in KrisEnergy
(Refer to Notes 2.28(b)(iii) and 11(b) to the financial statements)
As disclosed in Note 11(b), as at 31 December 2021, the Group’s
receivables from KrisEnergy, net of expected credit loss, amounted
to $115 million.
We held discussions with management and the independent
financial advisor to understand the proposed recovery plan,
including the recovery strategy for each of the assets.
For the producing assets, we evaluated the reasonableness of
the estimates and assumptions in the cash flow projections.
We also considered the assumptions applied in estimating the
timing of release of the withheld cash from one of the producing
assets under the security package. We involved our valuation
expert in evaluating the discount rate applied by management in
discounting the expected cash flows from the producing assets.
We assessed the sensitivity of the cash flow projections with
respect to key assumptions including the timing of release of
the withheld cash, discount rate, future oil prices and expected
production volume. For the assets that are to be sold, we
traced the recoverable amounts to the draft sales and purchase
agreements.
In respect of the independent financial advisor for the Group,
we assessed that they possessed the requisite competency
and experience to assist management in the assessment of the
recoverable amount of the receivables from KrisEnergy.
We also considered the adequacy of the disclosures in the
financial statements in respect of this matter.
Based on our procedures, we found the key judgments and basis
of estimating the available cash flows for the Group’s investment
in KrisEnergy to be reasonable. We also found the disclosures
in the financial statements in respect of the key judgments and
sources of estimation uncertainty to be adequate.
We obtained an understanding of the progress of ongoing
discussions that the Group is having with the authorities. We
discussed the reasonableness and the adequacy of the provision
made by management with the external legal counsel appointed
by the Group.
In respect of the external legal counsel engaged by the Group,
we assessed that they possessed the requisite competency and
experience in the assessment of the adequacy of provision made
by management.
KrisEnergy’s ordinary shares were suspended from trading from
the Singapore Exchange in August 2019. Whilst the scheme
of arrangement was approved by different groups of creditors
progressively in early 2021, KrisEnergy announced in April 2021
that consensual restructuring was no longer viable and even if the
restructuring exercise was completed, there remained material
uncertainty over KrisEnergy’s ability to continue as a going concern.
On 13 July 2021, KrisEnergy announced that the Grand Court of
Cayman Islands had granted the approval for the winding-up petition.
The Group has a comprehensive first ranking security package
over the assets of the KrisEnergy group. With KrisEnergy in the
process of winding up, the Group has implemented detailed
recovery plans which were developed in consultation with its
financial advisor and legal advisor to preserve KrisEnergy’s assets
and to maximise recoveries for the Group.
Management performed an impairment assessment to estimate
the recoverable amount of the Group’s receivables from KrisEnergy
as at 31 December 2021 based on the estimated amount of cash
available from producing assets to be held over the remaining lives
of the concession period of 8.5 to 12 years and expected proceeds
from assets to be sold, taking into account the rights to these cash
flows from the secured assets on a receivership basis. The cash
flow estimates from producing assets were based on forecasted
production volumes and oil prices, determined by taking reference
from external information sources, ranging from US$67 to US$73
per barrel for 2022 to 2033. The estimated recoverable amounts
for assets to be sold are based on the binding bids received from
external parties.
Taking into account the rights to the cash flows from the secured
assets on a receivership basis as at 31 December 2021, the Group
recognised a loss of $318 million.
We focused on this area as the assessment of the recoverable
amount involves making projections of cash flows arising from
producing assets, including the estimation of the timing of release
of the withheld cash in one of the producing assets, in which
several estimates and key assumptions were applied.
4. Global resolution with criminal authorities in relation to
corrupt payments
(Refer to Note 2.28(b)(vi) to the financial statements)
In 2017, a wholly-owned subsidiary, Keppel Offshore and Marine
Ltd (“KOM”) reached a global resolution with the Corrupt Practices
Investigation Bureau (“CPIB”) in Singapore, the U.S. Department
of Justice (“DOJ”), and the Public Prosecutor’s Office in Brazil,
Ministério Público Federal (“MPF”) in relation to corrupt payments
made in relation to KOM’s various projects with Petrobras and Sete
Brasil in Brazil.
As part of the applicable fines payable under the global resolution,
a further US$52,777,123 (less any penalties that KOM may pay to
specified Brazilian authorities) is payable to CPIB within three years
from the date of the Conditional Warning issued by CPIB and has
been included in accrued expenses since FY 2017. The discussions
with the specified Brazilian authorities remain ongoing, and CPIB has
agreed to extend this three-year period for a further 12 months until 22
December 2021 and thereafter for a further 6 months to 22 June 2022.
Keppel Corporation Limited
FINANCIAL REPORT
Key Audit Matter
How our audit addressed the Key Audit Matter
127
In 2020, the Office of the Comptroller General of Brazil (“CGU”)
published a notice in the Official Gazette (“Notice”) to the effect
that CGU had initiated an administrative enforcement procedure
(“AEP”) against KOM and certain subsidiaries, in relation to alleged
irregularities under the Brazilian Anti-Corruption Statute. The
Company understands from CGU that the AEP will not affect the
ongoing negotiations with the Brazil authorities, and that the AEP
has been suspended pending these ongoing discussions.
Based on currently available information, including opinion from
the legal advisors, no additional provision was made in relation to
the ongoing discussions with the specified Brazilian authorities.
We focused on this area because of the management judgment
required in determining whether additional provision is required
in view of the ongoing discussions with the specified Brazilian
authorities.
5. Revenue recognition based on measurement of progress
towards performance obligation
(Refer to Notes 2.28(b)(iv) and 25 to the financial statements)
During the financial year, the Group recognised $2,270 million of
revenue relating to its rigbuilding, shipbuilding and repairs, and
long-term engineering contracts (“construction contracts”). The
Group recognises revenue over time by reference to the Group’s
progress towards completing the construction of the contract
work.
The stage of completion was measured by reference to either
the percentage of the physical proportion of the contract work
completed or the proportion of contract costs incurred to date to
the estimated total contract costs.
We focused on this area because of the significant management
judgment required in:
•
the estimation of the physical proportion of the contract work
completed for the contracts; and
the estimation of total costs on the contracts, including
contingencies that could arise from variations to original
contract terms, and claims.
•
Based on our procedures, we found management’s assessment of
the matter, including the on-going discussions with the specified
Brazilian authorities to be appropriate.
We also considered the adequacy of the disclosures in the
financial statements in respect of this matter. We found the
disclosures in the financial statements to be adequate.
In respect of construction contracts where progress was
measured based on the percentage of the physical proportion
of the contract work completed, we sighted certified progress
reports from engineers, performed site visits, and obtained
confirmations from project owners to assess the appropriateness
of management’s estimates of the physical proportion of work
completed.
In respect of construction contracts where progress was
measured based on the proportion of contract costs incurred
to date to the estimated total contract costs, we evaluated the
effectiveness of management’s controls over the estimation of
total costs and assessed the reasonableness of key inputs in the
cost estimation. We tested the appropriateness of estimated costs
by comparing these against actual costs incurred.
We then recomputed the revenues recognised for the current
financial year based on the respective percentage of completion
and traced these to the accounting records.
In relation to total contracts costs, we reviewed the actual costs
incurred by tracing to supplier invoices or sub-contractor progress
billings and reviewed management’s estimates of total project
costs, including costs to complete, by agreeing the costs to
quotations and contracts entered for subcontracting costs and
reviewing the estimation of construction costs with reference to
the remaining activities of the projects. In addition, we reviewed
claims from suppliers and subcontractors and traced to the
recording of the costs.
We assessed the need for provision for liquidated damages
via discussions with management and project managers and
examination of project documentation.
We also considered the adequacy of the Group’s disclosures in
respect of this matter.
Based on our procedures, we found assumptions made in the
measurement of the progress of construction contracts to
be reasonable. We also found the disclosures in the financial
statements to be adequate.
Annual Report 2021
128
INDEPENDENT AUDITOR’S REPORT
to the Members of Keppel Corporation Limited
Key Audit Matter
How our audit addressed the Key Audit Matter
6. Valuation of properties held for sale
(Refer to Notes 2.28(b)(ix) and 15 to the financial statements)
As at 31 December 2021, the Group has residential properties held
for sale of $3,004 million mainly in China, Singapore, Indonesia and
Vietnam.
Properties held for sale are stated at the lower of cost and net
realisable values. The determination of the carrying value and
whether to recognise any foreseeable losses for properties held for
sale is highly dependent on the estimated cost to complete each
development and the estimated selling price.
For certain development projects, fair values based on independent
valuation reports are used to determine the net realisable value of
these properties.
We focused on this area as significant judgment is required in
making estimates of future selling prices and the estimated
cost to complete the development project. In instances where
independent valuation reports are used, the valuation process
involves significant judgment in determining the appropriate
valuation methodology to be used, and in estimating the underlying
assumptions to be applied. The valuations are highly sensitive to
key assumptions applied in deriving the discount rate and price of
comparable plots and properties.
Continued unfavourable market conditions in certain of the
markets in which the Group operates might exert downward
pressure on transaction volumes and residential property prices.
This could lead to future trends in these markets departing from
known trends based on past experience. There is, therefore, a risk
that the estimates of carrying values at the date of these financial
statements exceed future selling prices, resulting in losses when
the properties are sold.
Furthermore, the COVID-19 pandemic has resulted in significant
economic uncertainty in the current and future economic
environment and there is heightened uncertainty inherent in
estimating the impact of the pandemic on future selling prices of
the development properties.
We found that, in making its estimates of future selling prices,
the Group took into account macroeconomic and real estate
price trend information, and the potential financial impact of
the COVID-19 pandemic in the estimates. Management applied
their knowledge of the business in their regular review of these
estimates.
We corroborated the Group’s forecast selling prices by comparing
the forecast selling price to, where available, recently transacted
prices and prices of comparable properties located in the same
vicinity as the properties held for sale.
We compared management’s budgeted total development
costs against underlying contracts with vendors and supporting
documents. We discussed with the project managers to
assess the reasonableness of estimated cost to complete
and corroborated the underlying assumptions made with our
understanding of past completed projects.
For projects where management has used independent valuation
reports as a basis to determine the net realisable value, we
evaluated the qualifications and competence of the external
valuer and considered the valuation methodologies used against
those applied by other valuers for similar property type. We tested
the reliability of inputs used in the valuation and corroborated
key inputs such as the discount rate and price of comparable
plots and properties used in the valuation by comparing them
against historical rates and available industry data, taking into
consideration comparability and market factors. Where the inputs
were outside the expected range, we undertook further procedures
to understand the effect of additional factors and, when necessary,
held further discussions with the valuers.
We focused our work on development projects with slower-than-
expected sales or with low or negative margins. For projects which
are expected to sell below cost, we checked the computations of
the foreseeable losses.
We also considered the adequacy of the disclosures in the
financial statements, in describing the allowance for foreseeable
losses made for properties held for sale.
Based on our procedures, we were satisfied that management’s
estimates and assumptions were reasonable. We also found the
related disclosures in the financial statements to be adequate.
Keppel Corporation Limited
FINANCIAL REPORT
Key Audit Matter
How our audit addressed the Key Audit Matter
129
7. Valuation of investment properties
(Refer to Notes 2.28(b)(viii), 8 and 35 to the financial
statements)
As at 31 December 2021, the Group owns a portfolio of investment
properties of $4,256 million comprising mainly office buildings,
hotels, retail malls and mixed-use development projects, located
primarily in China, Singapore, Indonesia and Vietnam.
Investment properties are stated at their fair values based on
independent external valuations.
We focused on this area as the valuation process involves
significant judgment in determining the appropriate valuation
methodology to be used, and in estimating the underlying
assumptions to be applied. The valuations are highly sensitive to
key assumptions applied such as the capitalisation rate, discount
rate, net initial yield and price of comparable plots and properties.
Furthermore, the valuation reports obtained from independent
property valuers for certain investment properties have highlighted
the heightened uncertainty of the COVID-19 outbreak and material
valuation uncertainty where a higher degree of caution should
be attached to the valuation than would normally be the case.
Accordingly, the valuation of these investment properties may
be subjected to more fluctuation than during normal market
conditions.
We evaluated the qualifications and competence of the external
valuers. We considered the valuation methodologies used against
those applied by other valuers for similar property types, and how
the impact of the COVID-19 pandemic and market uncertainty
has been considered by the independent property valuers in
determining the valuation of investment properties. We also
considered other alternative valuation methods.
We tested the reliability of the projected cash inflows and outflows
used in the valuation against supporting lease agreements,
construction contracts and other documents. We corroborated
other inputs such as the capitalisation rate, net initial yield,
discount rate and price of comparable plots used in the valuation
methodology by comparing them against historical rates and
available industry data, taking into consideration comparability
and market factors. Where the inputs were outside the expected
range, we undertook further procedures to understand the reasons
for these and, where necessary, held further discussions with the
valuers.
We also considered the adequacy of the disclosures in the
financial statements, in describing the inherent degree of
subjectivity and key assumptions used in the estimates and the
impact of COVID-19 on the valuation of investment properties,
as we consider them as likely to be significant to users of the
financial statements given the estimation uncertainty and
sensitivity of the valuations.
The valuers are members of recognised professional bodies for
external valuers. We found the valuation methodologies used to
be in line with generally accepted market practices and the key
assumptions used were within the range of market data. We also
found the disclosures in the financial statements to be adequate.
8.
Impairment assessment of goodwill arising from acquisition
of subsidiary – M1 Limited (“M1”)
(Refer to Notes 2.28(b)(iii) and 14 to the financial statements)
In February 2019, the Group obtained controlling interest in M1
through an 80% owned subsidiary at a purchase consideration
of $1,232 million. A goodwill of $988 million was recognised on
acquisition of M1.
An annual impairment assessment was performed on the goodwill
arising from acquisition of M1 where the recoverable amount
of M1 as a Cash generating unit (“CGU”) is estimated. Where
the recoverable amount of M1 is determined to be less than the
Group’s carrying amount of the M1 CGU (including the goodwill),
an impairment loss will be recognised.
The recoverable value of the M1 CGU as at 31 December 2021 was
determined on a VIU basis using a DCF model.
The assessment of the VIU of M1 CGU required significant
judgment in estimating the underlying assumptions including
the revenue growth rate, long term growth rate and discount
rate. Based on management’s assessment, no impairment loss
was recognised as the recoverable amount was higher than the
carrying value (including goodwill) of the M1 CGU.
We assessed the appropriateness of the underlying assumptions
made by management in their cash flow projections, including
the revenue growth rate, long term growth rate and discount rate
based on the economic and industry conditions relevant to M1
business. We checked whether the cash flow projections were
based on the approved business plan. We involved our valuation
expert in evaluating the valuation methodology and the discount
rate applied by management.
We assessed the sensitivity of the cash flow projections and
other key assumptions including discount rate and long term
growth rate on the impairment assessment and the impact on the
headroom over the carrying value.
Based on our procedures, we were satisfied that management’s
estimates and assumptions used in the impairment assessment
of the goodwill on acquisition of M1 were reasonable.
We also considered the adequacy of the disclosures in the
financial statements in respect of this matter. We found the
disclosures in the financial statements to be adequate.
Annual Report 2021
130
INDEPENDENT AUDITOR’S REPORT
to the Members of Keppel Corporation Limited
Other information
Management is responsible for the other information. The other information comprises the “Directors’ Statement” (but does not include the
financial statements and our auditor’s report thereon) which we obtained prior to the date of this auditor’s report and other sections of the
Keppel Corporation Limited Annual Report 2021 (“Other Sections of the Annual Report”) which are expected to be made available to us after
that date.
Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
When we read the Other Sections of the Annual Report, if we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance and take appropriate actions in accordance with SSAs.
Responsibilities of Management and Directors for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of
the Act, SFRS(I)s and IFRSs, and for 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 financial statements and to maintain accountability of assets.
In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The directors’ responsibilities include overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SSAs, we exercise professional judgment and maintain professional skepticism throughout the audit.
We also:
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group
to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to
express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit.
We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.
Keppel Corporation Limited
FINANCIAL REPORT 131
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and
to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial
statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on Other Legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary corporations
incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
The engagement partner on the audit resulting in this independent auditor’s report is Lam Hock Choon.
PricewaterhouseCoopers LLP
Public Accountants and Chartered Accountants
Singapore, 25 February 2022
Annual Report 2021
132
BALANCE SHEETS
As at 31 December 2021
Note
Group
2021
$’000
Share capital
Treasury shares
Reserves
Share capital & reserves
Perpetual securities
Non-controlling interests
Total equity
Represented by:
Fixed assets
Investment properties
Right-of-use assets
Subsidiaries
Associated companies and joint ventures
Investments
Deferred tax assets
Long term assets
Intangibles
Current assets
Stocks
Contract assets
Amounts due from:
- subsidiaries
- associated companies and joint ventures
Debtors
Derivative assets
Short term investments
Bank balances, deposits & cash
Assets classified as held for sale
Current liabilities
Creditors
Derivative liabilities
Contract liabilities
Provisions for warranties
Amounts due to:
- subsidiaries
- associated companies and joint ventures
Term loans
Lease liabilities
Taxation
Liabilities directly associated with assets classified as held for sale
Net current assets
Non-current liabilities
Term loans
Lease liabilities
Deferred tax liabilities
Other non-current liabilities
Net assets
The accompanying notes form an integral part of these financial statements.
Keppel Corporation Limited
3
3
4
6
5
7
8
9
10
11
12
24
13
14
15
16
17
17
18
19
20
37
21
16
22
17
17
23
9
29
37
23
9
24
21
2020
$’000
1,305,668
(13,690)
9,436,480
10,728,458
-
427,446
Company
2021
$’000
1,305,668
(4,624)
8,495,816
9,796,860
401,521
-
2020
$’000
1,305,668
(13,690)
8,185,085
9,477,063
-
-
1,305,668
(4,624)
10,354,096
11,655,140
401,521
384,700
12,441,361
11,155,904
10,198,381
9,477,063
2,044,374
4,256,428
529,216
-
6,050,258
1,447,664
212,679
1,347,354
1,589,272
17,477,245
2,715,753
3,674,075
582,706
-
5,990,613
1,229,492
159,427
1,756,399
1,608,824
17,717,289
8,462
-
15,231
7,993,786
-
24,100
9,313
122,507
-
8,173,399
5,764
-
11,204
7,962,538
-
22,196
5,096
39,828
-
8,046,626
4,603,985
3,169,694
4,959,427
2,657,231
-
-
-
-
-
591,744
2,168,612
140,031
27,103
3,616,633
14,317,802
527,880
14,845,682
5,098,788
249,690
1,002,024
28,932
-
286,085
4,659,308
89,677
505,479
11,919,983
38,330
11,958,313
-
493,269
2,531,075
124,547
134,634
2,479,715
13,379,898
1,008,692
14,388,590
4,603,677
59,143
2,072,303
39,449
-
335,908
4,432,602
69,377
358,802
11,971,261
115,220
12,086,481
9,852,909
22,110
9,971
39,153
-
810
9,924,953
-
9,924,953
92,523
31,284
-
-
175,802
882
3,326,730
4,175
39,651
3,671,047
-
3,671,047
9,804,710
152
12,273
38,206
-
574
9,855,915
-
9,855,915
63,808
30,614
-
-
201,959
-
3,406,552
4,198
29,155
3,736,286
-
3,736,286
2,887,369
2,302,109
6,253,906
6,119,629
6,795,912
472,042
426,891
228,408
7,923,253
7,606,594
494,527
443,547
318,826
8,863,494
4,113,695
12,265
-
102,964
4,228,924
4,529,017
7,725
-
152,450
4,689,192
12,441,361
11,155,904
10,198,381
9,477,063
FINANCIAL REPORT
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the financial year ended 31 December 2021
133
Revenue
Materials and subcontract costs
Staff costs
Depreciation and amortisation
Expected credit loss on financial assets, contract assets and
financial guarantee
Other operating income - net
Operating profit
Investment income
Interest income
Interest expenses
Share of results of associated companies and joint ventures
Profit/(loss) before tax
Taxation
Profit/(loss) for the year
Attributable to:
Shareholders of the Company
Perpetual securities holders
Non-controlling interests
Earnings per ordinary share
- basic
- diluted
Note
2021
$’000
2020
$’000
25
26
27
27
28
28
28
11
29
5
30
8,624,713
(6,603,496)
(1,115,650)
(406,402)
6,574,342
(4,591,235)
(1,120,128)
(413,506)
(364,436)
763,062
897,791
110,952
110,374
(251,021)
466,900
1,334,996
(324,984)
(651,082)
210,010
8,401
29,346
162,053
(292,266)
(162,221)
(254,687)
(253,407)
1,010,012
(508,094)
1,022,651
3,401
(16,040)
(505,860)
-
(2,234)
1,010,012
(508,094)
56.2 cts
55.9 cts
(27.8) cts
(27.7) cts
The accompanying notes form an integral part of these financial statements.
Annual Report 2021
FINANCIAL REPORT
134
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the financial year ended 31 December 2021
Profit/(loss) for the year
Items that may be reclassified subsequently to profit and loss account:
Cash flow hedges
- Fair value changes arising during the year, net of tax
- Realised and transferred to profit and loss account
Foreign exchange translation
- Exchange difference arising during the year
- Realised and transferred to profit and loss account
Share of other comprehensive income of associated companies and joint ventures
- Cash flow hedges
- Foreign exchange translation
Items that will not be reclassified subsequently to profit and loss account:
Financial assets, at FVOCI
- Fair value changes arising during the year
Foreign exchange translation
- Exchange difference arising during the year
Share of other comprehensive income of associated companies and joint ventures
- Financial assets, at FVOCI
Other comprehensive income for the year, net of tax
Total comprehensive income/(loss) for the year
Attributable to:
Shareholders of the Company
Perpetual securities holders
Non-controlling interests
2021
$’000
2020
$’000
1,010,012
(508,094)
(70,678)
74,573
(100,148)
125,112
187,852
17,595
135,212
17,247
34,251
96,000
339,593
(27,370)
69,751
219,804
(96,015)
65,246
4,217
1,882
194
(91,604)
(429)
66,699
247,989
286,503
1,258,001
(221,591)
1,263,678
3,401
(9,078)
1,258,001
(221,151)
-
(440)
(221,591)
The accompanying notes form an integral part of these financial statements.
Keppel Corporation Limited
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the financial year ended 31 December 2021
135
Attributable to owners of the Company
Share
Capital
$’000
Treasury
Shares
$’000
Capital
Reserves
$’000
Foreign
Exchange
Revenue Translation
Account
Reserves
$’000
$’000
Share
Capital &
Reserves
$’000
Perpetual
Securities
$’000
Non-
controlling
Interests
$’000
Total
Equity
$’000
Group
2021
As at 1 January 2021
1,305,668
(13,690)
175,731 9,703,452
(442,703) 10,728,458
-
427,446 11,155,904
- 1,022,651
- 1,022,651
3,401
(16,040) 1,010,012
(60,420)
-
301,447
241,027
-
6,962
247,989
(60,420) 1,022,651
301,447 1,263,678
3,401
(9,078) 1,258,001
Total comprehensive
income for the year
Profit for the year
Other comprehensive income*
Total comprehensive
income for the year
Transactions with owners,
recognised directly in equity
Contributions by and
distributions to owners
Dividends paid (Note 31)
Share-based payment
Dividend paid to non-controlling
shareholders
Purchase of treasury shares
Treasury shares reissued
pursuant to share plans
Transfer of statutory, capital and
other reserves from
revenue reserves
Contribution by non-controlling
shareholders
Issue of perpetual securities,
net of transaction costs
Contributions to defined
benefits plans
Total contributions by and
distributions to owners
Changes in ownership interests
in subsidiaries
Acquisition of additional interest
in subsidiaries
Disposal of interest in subsidiaries
Total change in ownership
interests in subsidiaries
Total transactions with owners
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(13,048)
-
(345,752)
34,346
-
-
-
-
-
-
22,114
(22,114)
-
-
-
-
14,618
(14,618)
-
-
(620)
-
-
-
9,066
26,230
(360,370)
-
-
-
(11,922)
-
(11,922)
-
-
-
9,066
14,308
(360,370)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(345,752)
34,346
-
(13,048)
-
-
-
-
-
-
-
-
-
-
-
398,120
(620)
-
-
-
(345,752)
34,346
(11,251)
(11,251)
-
-
-
(13,048)
-
-
1,295
1,295
-
-
398,120
(620)
(325,074)
398,120
(9,956)
63,090
(11,922)
-
(11,922)
-
-
-
(19,385)
(31,307)
(4,327)
(4,327)
(23,712)
(35,634)
(336,996)
398,120
(33,668)
27,456
As at 31 December 2021
1,305,668
(4,624)
129,619 10,365,733
(141,256) 11,655,140
401,521
384,700 12,441,361
*
Details of other comprehensive income have been included in the consolidated statement of comprehensive income.
The accompanying notes form an integral part of these financial statements.
Annual Report 2021
FINANCIAL REPORT
136
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the Company
Share
Capital
$’000
Treasury
Shares
$’000
Capital
Reserves
$’000
Revenue
Reserves
$’000
Foreign
Exchange
Translation
Account
$’000
Share
Capital &
Reserves
$’000
Non-
controlling
Interests
$’000
Total
Equity
$’000
1,291,722
(14,009)
126,099
10,470,627
(663,586) 11,210,853
435,178
11,646,031
-
(505,860)
-
(505,860)
(2,234)
(508,094)
62,499
-
222,210
284,709
1,794
286,503
62,499
(505,860)
222,210
(221,151)
(440)
(221,591)
-
-
-
-
-
-
(19,040)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(273,078)
(273,078)
36,302
-
-
(273,078)
36,302
36,302
-
-
-
19,359
(33,305)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(10,436)
11,763
(1,327)
-
(1,474)
(960)
-
-
-
-
-
-
-
(24,325)
(24,325)
(19,040)
13,946
(13,946)
-
-
-
-
-
(19,040)
13,946
(13,946)
-
-
16,888
16,888
(1,474)
(960)
6
-
(1,468)
(960)
13,946
319
(9,873)
(261,315)
(1,327)
(258,250)
(7,431)
(265,681)
-
-
-
-
-
-
(2,994)
-
(2,994)
-
-
-
-
-
-
(2,994)
-
2,334
(2,195)
(660)
(2,195)
(2,994)
139
(2,855)
13,946
319
(12,867)
(261,315)
(1,327)
(261,244)
(7,292)
(268,536)
Group
2020
As at 1 January 2020
Total comprehensive
income for the year
Loss for the year
Other comprehensive income*
Total comprehensive income
for the year
Transactions with owners,
recognised directly in equity
Contributions by and
distributions to owners
Dividends paid (Note 31)
Share-based payment
Dividend paid to non-controlling
shareholders
Purchase of treasury shares
Treasury shares reissued
pursuant to share plans
Transfer of statutory, capital
and other reserves from
revenue reserves
Contribution by non-controlling
shareholders
Contributions to defined
benefits plans
Other adjustments
Total contributions by and
distributions to owners
Changes in ownership interests
in subsidiaries
Acquisition of additional interest
in subsidiaries
Disposal of interest in subsidiaries
Total change in ownership
interests in subsidiaries
Total transactions with owners
Shares issued
13,946
As at 31 December 2020
1,305,668
(13,690)
175,731
9,703,452
(442,703) 10,728,458
427,446
11,155,904
*
Details of other comprehensive income have been included in the consolidated statement of comprehensive income.
The accompanying notes form an integral part of these financial statements.
Keppel Corporation Limited
FINANCIAL REPORT
137
Attributable to owners of the Company
Share
Capital
$’000
Treasury
Shares
$’000
Capital
Reserves
$’000
Revenue
Reserves
$’000
Share
Capital &
Reserves
$’000
Perpetual
Securities
$’000
Total
Equity
$’000
Company
2021
As at 1 January 2021
1,305,668
(13,690)
209,164
7,975,921
9,477,063
-
9,477,063
Total comprehensive income for the year
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners,
recognised directly in equity
Dividends paid
Share-based payment
Purchase of treasury shares
Treasury shares reissued pursuant
to share plans
Issue of perpetual securities,
net of transaction costs
Total transactions with owners
-
-
-
-
-
-
-
-
-
-
-
-
-
(13,048)
-
640,888
640,888
3,401
644,289
3,363
3,363
-
3,363
-
3,363
640,888
644,251
3,401
647,652
-
(345,752)
(345,752)
34,346
-
22,114
(22,114)
-
-
-
-
-
-
34,346
(13,048)
-
-
9,066
12,232
(345,752)
(324,454)
-
-
-
-
(345,752)
34,346
(13,048)
-
398,120
398,120
398,120
73,666
As at 31 December 2021
1,305,668
(4,624)
224,759
8,271,057
9,796,860
401,521 10,198,381
Company
2020
As at 1 January 2020
Total comprehensive income for the year
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Transactions with owners,
recognised directly in equity
Dividends paid
Share-based payment
Purchase of treasury shares
Shares issued
Treasury shares reissued pursuant to
share plans
1,291,722
(14,009)
205,112
6,567,206
8,050,031
-
8,050,031
-
-
-
-
-
-
13,946
-
-
-
-
-
(19,040)
-
-
1,681,793
1,681,793
1,055
1,055
-
1,055
1,681,793
1,682,848
-
(273,078)
(273,078)
36,302
-
-
-
-
-
-
36,302
(19,040)
13,946
(13,946)
-
-
-
-
-
-
-
-
-
-
1,681,793
1,055
1,682,848
(273,078)
36,302
(19,040)
13,946
(13,946)
(255,816)
9,477,063
Total transactions with owners
13,946
319
2,997
(273,078)
(255,816)
As at 31 December 2020
1,305,668
(13,690)
209,164
7,975,921
9,477,063
-
19,359
(33,305)
The accompanying notes form an integral part of these financial statements.
Annual Report 2021
138
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 December 2021
Operating activities
Operating profit
Adjustments:
Depreciation and amortisation
Share-based payment expenses
(Gain)/Loss on sale of fixed assets
Gain on disposal of subsidiaries
Gain on disposal of associated companies and joint ventures
Gain from sale of units in associated companies
Impairment/write-off of fixed and intangible assets
Impairment of associated companies
Fair value gain on investment properties
(Gain)/Loss from change in interest in associated companies
Fair value (gain)/loss on investments
Gain from reclassification of associated companies to fair value
through other comprehensive income investments
Fair value gain on remeasurement of remaining interest in a
joint venture/associated company
Unrealised foreign exchange differences
Operational cash flow before changes in working capital
Working capital changes:
Stocks
Contract assets
Debtors
Creditors
Contract liabilities
Investments
Intangibles
Amount due to/from associated companies and joint ventures
Interest received
Interest paid
Net income taxes paid
Net cash (used in)/from operating activities
Investing activities
Acquisition and further investment in associated companies and joint ventures
Acquisition of fixed assets and investment properties
Disposal of subsidiaries
Proceeds from disposal of associated companies and joint ventures
and return of capital
Proceeds from disposal of fixed assets
Repayment from associated companies and joint ventures
Dividends received from investments, associated companies and joint ventures
Net cash from/(used in) investing activities
Financing activities
Acquisition of additional interest in subsidiaries
Proceeds from non-controlling shareholders of subsidiaries
Proceeds from term loans
Repayment of term loans
Principal element of lease payments
Proceeds from issuance of perpetual securities, net of transaction cost
Purchase of treasury shares
Dividend paid to shareholders of the Company
Dividend paid to non-controlling shareholders of subsidiaries
Net cash (used in)/from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents as at beginning of year
Effects of exchange rate changes on the balance of cash
held in foreign currencies
Cash and cash equivalents as at end of year
The accompanying notes form an integral part of these financial statements.
Keppel Corporation Limited
Note
2021
$’000
2020
$’000
897,791
8,401
406,402
37,369
(9,550)
(241,054)
(208,635)
-
53,550
35,082
(238,458)
(8,516)
(315,540)
413,506
39,882
1,667
(63,995)
(34,419)
(48,010)
62,075
48,686
(265,230)
1,615
61,023
-
(124,769)
(69,469)
(10,841)
328,131
58,278
(520,205)
412,841
865,176
(1,072,727)
120,342
(33,087)
(17,217)
141,532
93,950
(251,077)
(259,964)
(275,559)
(156,783)
(538,366)
1,146,299
668,040
592,656
2,438
311,177
2,025,461
(28,385)
-
1,709,321
(2,308,566)
(68,573)
398,120
(13,048)
(345,752)
(11,251)
(668,134)
(26,034)
24,990
99,388
(349,684)
872,481
(427,146)
352,164
272,478
(135,398)
(1,859)
(49,486)
632,938
132,046
(385,248)
(177,284)
202,452
(743,600)
(487,640)
331,761
318,141
3,187
58,778
245,270
(274,103)
(450)
1,881
2,240,500
(1,159,414)
(53,413)
-
(19,040)
(273,078)
(24,325)
712,661
A
1,081,768
641,010
2,408,473
1,777,244
53,401
(9,781)
B
3,543,642
2,408,473
FINANCIAL REPORT
Reconciliation of liabilities arising from financing activities
2021
Term loans
Lease
liabilities
2020
1 January 2021
$’000
Net payment
of principal
$’000
12,039,196
(599,245)
563,904
(68,573)
1 January 2020
$’000
Net proceeds/
(payment) of
principal
$’000
Reclassified
as liabilities
directly
associated
with assets
classified as
held for sale
$’000
-
-
Reclassified
as liabilities
directly
associated
with assets
classified as
held for sale
$’000
139
Non-cash changes
Addition during
the year
$’000
Remeasure-
ment of
lease liabitities
$’000
Disposal of
subsidiaries
$’000
-
-
76,427
(4,536)
-
-
Foreign
exchange
movement
$’000
15,269
(5,503)
31 December
2021
$’000
11,455,220
561,719
Non-cash changes
Addition during
the year
$’000
Remeasure-
ment of
lease liabitities
$’000
Disposal of
subsidiaries
$’000
Term loans
Lease
liabilities
11,059,631
1,081,086
(91,967)
-
-
597,439
(53,413)
-
25,668
22,385
-
-
Notes to Consolidated Statement of Cash Flows
A.
Disposal of subsidiary
During the financial year, the book values of net assets of subsidiaries disposed were as follows:
Fixed assets and investment properties
Stocks
Debtors and other assets
Associated companies
Bank balances and cash
Assets classified as held for sale*
Amount due from associated companies and joint ventures
Creditors and other liabilities
Liabilities directly associated with assets classified as held for sale*
Current and deferred taxation
Non-controlling interests deconsolidated
Net assets disposed of
Net gain on disposal
Amount accounted for as an associated company
Realisation of foreign currency translation reserve
Sale proceeds
Less: Bank balances and cash disposed
Less: Deferred proceeds received
Cash inflow on disposal
Foreign
exchange
movement
$’000
(9,554)
31 December
2020
$’000
12,039,196
(28,175)
563,904
2021
$’000
(22)
(311,921)
(10,741)
(1,208)
(3,145)
(875,971)
(4,731)
110,586
156,412
6,201
2,228
(932,312)
(241,054)
18,980
1,395
(1,152,991)
6,692
-
(1,146,299)
2020
$’000
(192)
(293,591)
(10,377)
(158,670)
(5,352)
-
-
251,693
-
-
2,195
(214,294)
(63,995)
59,927
(2,950)
(221,312)
5,352
(115,801)
(331,761)
The accompanying notes form an integral part of these financial statements.
Annual Report 2021
140
CONSOLIDATED STATEMENT OF CASH FLOWS
A.
Disposal of subsidiary (continued)
* Breakdown of assets classified as held for sale and liabilities directly associated with assets classified as held for sale disposed
during the year:
Assets classified as held for sale
Fixed assets
Investment properties
Right-of-use assets
Associated companies
Debtors
Bank balances, deposits & cash
Liabilities directly associated with assets classified as held for sale
Creditors
Term loans
Current and deferred taxation
2021
$’000
(53,358)
(648,430)
(153,602)
(9,399)
(7,635)
(3,547)
(875,971)
56,063
91,327
9,022
156,412
During the year, significant disposal of subsidiaries relates to Keppel Bay Tower Pte. Ltd., First King Properties Limited, Chengdu
Shengshi Jingwei Real Estate Co., Ltd. and the disposal of 51% equity stake in Tianjin Fushi Property Development Co., Ltd. Keppel Bay
Tower Pte. Ltd. was disposed to an associated company of the Group.
Disposal during the prior year relates to the First FLNG Holdings Pte Ltd, First FLNG Sub-Fund Holdings Pte Ltd, Jiangyin Evergro
Properties Co., Ltd and Chengdu Hilltop Development Co Ltd. During the prior year, the Group also received deferred proceeds from
FY2019 sale of 70% interest in Dong Nai Waterfront City LLC.
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 statement
of cash flows comprise the following balance sheet amounts:
Bank balances, deposits and cash
Amounts held under escrow accounts for overseas acquisition of land,
payment of construction cost, claims and other liabilities
2021
$’000
2020
$’000
3,616,633
2,479,715
(72,991)
(71,242)
3,543,642
2,408,473
The accompanying notes form an integral part of these financial statements.
Keppel Corporation Limited
FINANCIAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2021
141
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 production facilities and drilling rigs design, construction, fabrication and repair, ship conversions and repair and
specialised shipbuilding;
power generation, renewables, environmental engineering and infrastructure operation and maintenance;
property development and investment, as well as master development;
provision of telecommunications services, retail sales of telecommunications equipment and accessories, development and
operation of data centres, and provision of logistics solutions; and
management of private funds and listed real estate investment and business trusts.
The financial statements of the Group for the financial year ended 31 December 2021 and the balance sheet and statement of changes
in equity of the Company at 31 December 2021 were authorised for issue in accordance with a resolution of the Board of Directors on
25 February 2022.
2.
Significant accounting policies
2.1 Basis of Preparation
The financial statements have been prepared in accordance with the provisions of the Companies Act 1967, Singapore Financial
Reporting Standards (International) (“SFRS(I)s”) and International Financial Reporting Standards (“IFRSs”). All references to SFRS(I)s and
IFRSs are referred to collectively as SFRS(I)s in these financial statements, unless specified otherwise. The financial statements have
been prepared under the historical cost convention, except as disclosed in the accounting policies below.
2.2 Adoption of New and Revised Standards
The Group adopted the new/revised SFRS(I)s, SFRS(I) Interpretations and amendments to SFRS(I)s that are effective for annual periods
beginning on or after 1 January 2021. Changes to the Group’s accounting policies have been made as required, in accordance with the
transitional provisions in the respective SFRS(I)s, SFRS (I) Interpretations and amendments to SFRS(I)s.
The following are the new or amended SFRS(I)s, SFRS(I) Interpretations and amendments to SFRS(I)s, that are relevant to the Group:
•
•
Amendments to SFRS(I) 9, SFRS(I) 1-39, SFRS(I) 7, SFRS(I) 4 and SFRS(I) 16: Interest Rate Benchmark Reform - Phase 2
Amendment to SFRS(I) 16 Leases - Covid-19-Related Rent Concessions beyond 30 June 2021
The adoption of the above new or amended SFRS(I)s, SFRS(I) Interpretations and amendments to SFRS(I)s did not have any significant
impact on the financial statements of the Group.
Interest Rate Benchmark Reform – Phase 2
The Group has adopted the amendments to SFRS(I) 9, SFRS(I) 7 and SFRS(I) 16 Interest Rate Benchmark Reform – Phase 2 effective
1 January 2021. In accordance with the transition provisions, the amendments shall be applied retrospectively to hedging relationships
and financial instruments. Comparative amounts have not been restated, and there was no impact on the current year opening reserves
amounts on adoption.
Hedge relationships
The Phase 2 amendments address issues arising during interest rate benchmark reform (“IBOR reform”), including specifying when
hedge designations and documentation should be updated, and when amounts accumulated in cash flow hedge reserve should be
recognised in profit or loss.
Note 35 provides further information about the reliefs applied by the Group and the hedging relationships for which the Group has
applied the reliefs. No changes were required to any of the amounts recognised in the current or prior year as a result of these
amendments. In the current year, the Group has adopted the following hedge accounting reliefs provided by the ‘Phase 2’ amendments
to existing cash flow hedges (refer to Note 35 for the notional amount) that have transitioned to alternative benchmark rates required by
IBOR reform:
-
-
Hedge designation: When the ‘Phase 1’ amendments cease to apply, the Group will amend its hedge designation to reflect
changes which are required by IBOR reform. These amendments to the hedge documentation do not require the Group to
discontinue its hedge relationship.
Amounts accumulated in the cash flow hedge reserve: When the interest rate benchmark on which the hedged future cash flows
were based is changed as required by IBOR reform, the accumulated amount outstanding in the cash flow hedge reserve is
deemed to be based on the alternative benchmark rate.
Annual Report 2021
FINANCIAL REPORT
142
NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
Financial instruments measured at amortised cost and lease liabilities
Phase 2 of the amendments requires that, for financial instruments measured using amortised cost measurement, changes to the basis
for determining the contractual cash flows required by IBOR reform are reflected by adjusting their effective interest rate. No immediate
gain or loss is recognised. A similar practical expedient exists for lease liabilities.
These expedients are only applicable to changes that are required by IBOR reform, which is the case if, and only if, the change is
necessary as a direct consequence of IBOR reform and the new basis for determining the contractual cash flows is economically
equivalent to the previous basis immediately preceding the change.
For lease liabilities where there is a change to the basis for determining the contractual cash flows, as a practical expedient the lease
liability is remeasured by discounting the revised lease payments using a discount rate that reflects the change in the interest rate
where the change is required by IBOR reform. If lease modifications are made in addition to those required by IBOR reform, the Group
applies the relevant SFRS(I) 16 requirements to account for the entire lease modification, including those changes required by IBOR
reform.
For the year ended 31 December 2021, the Group has applied the practical expedients provided under Phase 2 to amendments to
S$200 million of its long-term debt, as disclosed in Note 35.
Effect of IBOR reform
The Group’s risk exposure that is directly affected by the IBOR reform predominantly comprises its variable rate borrowings that are
linked to the Singapore Swap Offer Rate (“SOR”) or the United States Dollar London Interbank Offered Rate (“USD LIBOR”). A significant
portion of these floating rate borrowings are hedged using interest rate swaps, which have been designated as cash flow hedges.
SOR will cease publication after 30 June 2023, and it is expected to be replaced by the Singapore Overnight Rate Average (“SORA”). The
Group has S$700 million of variable-rate SGD borrowings which references to SOR, with interest rate fixing dates falling after 30 June
2023. The Group hedges the variability in cash flows using SOR-linked interest rate swaps. While most swaps have been restructured
in view of IBOR reform, the Group’s communication with its swap and debt counterparties is still ongoing, as specific changes required
by IBOR reform for most of its debt and some of its swaps have not yet been agreed. The Group also has S$35,604,000 variable-rate
SGD receivables which references to SOR, with interest rate fixing dates falling after 30 June 2023. The Group’s communication with
its receivables counterparties is ongoing, but specific changes required by IBOR reform have not yet been agreed. As IBOR uncertainty
is still present, the Group continues to apply the Phase 1 temporary amendments for hedge accounting on cash flow hedges relating to
SOR risk, and further information on the hedging relationship has been disclosed in Note 35. The expected transition from SOR to SORA
had no effect on the amounts reported for the current and prior financial years.
USD LIBOR will cease publication after 30 June 2023, and it is expected to be replaced by the Secured Overnight Financing Rate
(“SOFR”). The Group has US$625 million (or S$854 million equivalent) of variable-rate USD borrowings which references to USD LIBOR,
with interest rate fixing dates falling after 30 June 2023. The Group hedges the variability in cash flows using USD LIBOR-linked interest
rate swaps. While some swaps have been restructured in view of IBOR reform, the Group’s communication with its swap and debt
counterparties is still ongoing, as specific changes required by IBOR reform for most of its debt and swaps have not yet been agreed.
The Group also has S$377,660,000 variable-rate USD receivables which references to USD LIBOR, with interest rate fixing dates falling
after 30 June 2023. The Group’s communication with its receivables counterparties is ongoing, but specific changes required by IBOR
reform have not yet been agreed. As IBOR uncertainty is still present, the Group continues to apply the Phase 1 temporary amendments
for hedge accounting on cash flow hedges relating to USD LIBOR risk, and further information on the hedging relationship has been
disclosed in Note 35. The expected transition from USD LIBOR to SOFR had no effect on the amounts reported for the current and prior
financial years.
Affected financial instruments are SOR or USD LIBOR-linked instruments, with interest rate fixing dates falling after 30 June 2023. The
following table contains details of all the affected financial instruments that the Group and Company holds at 31 December 2021 which
are referenced to SOR and have not yet transitioned to new benchmark rates:
Group
Company
SOR
Of which:
Not yet
transitioned to
an alternative
benchmark rate
$’000
Carrying Amount
$’000
Of which:
Not yet
transitioned to
an alternative
benchmark rate
$’000
Carrying Amount
$’000
6,457
22,500
13,104
-
22,500
13,104
6,457
-
-
699,510
45,878
499,510
36,418
200,000
9,460
-
-
-
-
-
31 December 2021
Assets
- Derivative financial instruments
- Amounts due from an associated company
- Loan to a joint venture
Liabilities
- Borrowings
- Derivative financial instruments
Keppel Corporation Limited
FINANCIAL REPORT
143
The following table contains details of all the affected financial instruments that the Group and Company holds at 31 December 2021
which are referenced to USD LIBOR and have not yet transitioned to new benchmark rates:
31 December 2021
Assets
- Derivative financial instruments
- Trade Receivables
Liabilities
- Borrowings
- Derivative financial instruments
Group
Company
USD LIBOR
Of which:
Not yet
transitioned to
an alternative
benchmark rate
$’000
Carrying Amount
$’000
Of which:
Not yet
transitioned to
an alternative
benchmark rate
$’000
Carrying Amount
$’000
16,566
377,660
16,566
377,660
16,566
-
16,566
-
854,063
8,036
854,063
55
854,063
8,036
854,063
55
The above table excludes receivables from KrisEnergy of S$109,513,000 which are referenced to USD LIBOR as the carrying amount of
these receivables are primarily measured based on the expected recoveries for the Group. Refer to Note 11(b) for more details on the
Group’s investments in KrisEnergy and related exposures.
2.3 Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities)
controlled by the Company and its subsidiaries.
The financial statements of subsidiaries acquired or disposed of during the financial year are included or excluded from the
consolidated financial statements from their respective dates of obtaining control or ceasing control. 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.
Acquisition of subsidiaries is accounted for using the acquisition method. The cost of an acquisition is measured at the aggregate of
the fair value of the assets transferred, equity instruments issued, liabilities incurred or assumed at the date of exchange and the fair
values of any contingent consideration arrangement and any pre-existing equity interest in the subsidiary. Acquisition-related costs are
recognised in the profit and loss account as incurred. 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 non-controlling
interests, except for deferred tax assets/liabilities, share-based related accounts and assets held for sale.
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.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The
carrying amounts of the Group’s interests and the non-controlling interests are adjusted and the difference between the change in the
carrying amounts of the non-controlling interests and the fair value of the consideration paid or received is recognised directly in equity
and attributed to owners of the Company.
When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Group derecognises all assets
(including any goodwill), liabilities and non-controlling interests at their carrying amounts. Amounts previously recognised in other
comprehensive income in respect of that former subsidiary are reclassified to the profit and loss account or transferred directly to
revenue reserves if required by a specific Standard. Any retained interest in the former subsidiary is recognised at its fair value at the
date control is lost, with the gain or loss arising recognised in the profit and loss account.
On a transaction-by-transaction basis, the measurement of non-controlling interests is either at fair value or at the non-controlling
interests’ share of the fair value of the identifiable net assets of the acquiree.
Contingent consideration is measured at fair value at the acquisition date; subsequent adjustments to the consideration are recognised
against goodwill only to the extent that they arise from better information about the fair value at the acquisition date, and they
occur within the ‘measurement period’ (a maximum of 12 months from the acquisition date). All other subsequent adjustments are
recognised in the profit and loss account.
Non-controlling interests are that part of the net results of operations and of net assets of a subsidiary attributable to the interests
which are not owned directly or indirectly by the owners of the Company. They are shown separately in the consolidated statement
of comprehensive income, statement of changes in equity and balance sheet. Total comprehensive income is attributed to the non-
controlling interests in a subsidiary based on their respective interests in a subsidiary, even if this results in the non-controlling interests
having a deficit balance.
Annual Report 2021
144
NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
2.4 Fixed Assets
Fixed assets are initially stated at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment
loss, if any. The cost initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the manner intended by management. Subsequent expenditure is
added to the carrying amount only when it is probable that future economic benefits will flow to the entity and the cost can be measured
reliably. 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:
Buildings on freehold land
Buildings on leasehold land
Vessels & floating docks
Plant, machinery & equipment
Networks and related application systems
Furniture, fittings & office equipment
Cranes
20 to 50 years
Over period of lease (ranging from 10 to 50 years)
10 to 30 years
3 to 30 years
5 to 25 years
2 to 15 years
5 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.
2.5
Investment Properties
Investment properties comprise completed properties and properties under construction or re-development held to earn rental and/or
for capital appreciation and right-of-use assets relating to leasehold land that is held for long term capital appreciation or for a currently
indeterminate use. Investment properties are initially recognised at cost and subsequently measured at fair value, determined annually
based on valuations by independent professional valuers, except for significant investment properties which are revalued on a half-
yearly basis. Changes in fair value are recognised in the profit and loss account.
The cost of major renovations or improvements is capitalised and the carrying amounts of the replaced components 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.
2.6 Subsidiaries
A subsidiary is an entity (including structured entities) over which the Group has control. The Group controls an entity when the Group
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are
sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant
facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including:
-
-
-
-
The size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
Potential voting rights held by the Company, other vote holders or other parties;
Rights arising from other contractual arrangements; and
Any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the
relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.
Investments in subsidiaries are stated in the financial statements of the Company at cost less accumulated impairment losses. On
disposal of a subsidiary, the difference between net disposal proceeds and carrying amount of the investment is taken to profit or loss.
2.7 Associated Companies and Joint Ventures
An associated company is an entity, not being a subsidiary, over which the Group has significant influence, but not control.
A joint venture is an entity, not being a subsidiary, over which the Group has joint control as a result of contractual arrangements, and
rights to the net assets of the entities.
Investments in associated companies and joint ventures are stated in the Company’s financial statements at cost less any impairment
losses. On disposal of an associated company or a joint venture, the difference between net disposal proceeds and the carrying amount
of the investment is taken to the profit and loss account.
Keppel Corporation Limited
FINANCIAL REPORT
145
Investments in associated companies and joint ventures are accounted for in the consolidated financial statements using the
equity method of accounting less impairment loss, if any. The Group’s share of profit or loss and other comprehensive income
of the associated company or joint venture is included in the consolidated profit and loss account and consolidated statement of
comprehensive income respectively. The Group’s share of net assets of the associated company or joint venture is included in the
consolidated balance sheet.
When the Group’s investment in an associated company or a joint venture is held by, or is held indirectly through, a subsidiary that is
a venture capital organisation, or a mutual fund, unit trust and similar entities, the Group may elect to measure that investment at fair
value through profit or loss. This election is made separately for each associated company or joint venture, at initial recognition of the
associated company or joint venture.
Any excess of the cost of acquisition over the Group’s share of net identifiable assets, liabilities and contingent liabilities of the
associated company or joint venture recognised at the date of acquisition measured at their fair values 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 identifiable assets, liabilities and contingent liabilities measured at their fair values over the cost of
acquisition, after reassessment, is recognised immediately in the profit and loss account as a bargain purchase gain.
2.8
Intangibles
Goodwill
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the fair value of the acquirer’s previously held equity interest (if any) in the entity over the net identifiable assets acquired
and the liabilities assumed measured at their fair values at acquisition date. Goodwill is initially recognised as an asset at cost and is
subsequently measured at cost less any impairment losses. If the Group’s interest in the fair value of the acquiree’s identifiable net
assets exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value
of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately in the profit and loss
account as a bargain purchase gain.
Spectrum Rights
These comprise expenditure relating to one-time charges paid to acquire spectrum rights and telecommunications licenses or access
codes. These intangible assets are measured initially at cost and subsequently carried at cost less any accumulated amortisation and
any accumulated impairment losses. Spectrum rights are amortised on a straight-line basis over the estimated economic useful life of 4
to 16 years.
Brand
The brand was acquired as part of a business combination completed in the prior financial year. The brand value will be amortised over
the useful life which is estimated to be 30 years.
Customer Contracts and Customer Relationships
Customer contracts and customer relationships are identified and recognised separately from goodwill. The cost of customer contracts
and relationships is at their fair value at the acquisition date and subsequently carried at cost less accumulated amortisation and
accumulated impairment losses. 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 1 to 20 years.
Other Intangible Assets
Other intangible assets include development expenditure and internet protocol (IP) address, initially recognised at cost and
subsequently carried at cost less accumulated amortisation. 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 3 to 20 years.
Other intangible assets also include management rights which is initially recognised at cost upon acquisition and subsequently carried
at cost less accumulated impairment losses, if any. The useful life of the management rights is estimated to be indefinite because
management believes there is no foreseeable limit to the period over which the management rights is expected to generate net cash
inflows for the Group.
2.9 Service Concession Arrangement
The Group has an existing service concession arrangement with a governing agency (the grantor) to design, build, own and operate a
desalination plant in Singapore. Under the service concession arrangement, the Group will operate the plant for 25 years. At the end of
the concession period, the grantor may require the plant to be handed over in a specified condition or to be demolished at reasonable
costs borne by the grantor. Such service concession arrangement falls within the scope of SFRS(I) INT 12 Service Concession
Arrangements.
The Group constructs the plant (construction services) used to provide public services and operates and maintains the plant (operation
services) for the concession period as specified in the contract. The Group recognises and measures revenue in accordance with
SFRS(I) 15 for the services it performs.
The Group recognises a financial asset arising from the provision of the construction services when it has a contractual right to receive
fixed and determinable amounts of payments irrespective of the output produced. The consideration receivable is measured initially at
fair value and subsequently measured at amortised amount using the effective interest method.
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NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
2.10 Financial Assets
The Group classifies its financial assets in the following measurement categories:
-
-
-
Amortised cost;
Fair value through other comprehensive income (“FVOCI”); and
Fair value through profit or loss (“FVPL”).
The classification depends on the Group’s business model for managing the financial assets as well as the contractual terms of the
cash flows of the financial asset. Financial assets with embedded derivatives are considered in their entirety when determining whether
their cash flows are solely payment of principal and interest. The Group reclassifies debt instruments when and only when its business
model for managing those assets changes.
Purchases and sale of financial assets are recognised on the trade date when the Group commits to purchase or sell the assets.
At initial recognition, the Group measures a financial asset at its fair value including, in the case of a financial asset not at fair value
through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of
financial assets carried at fair value through profit or loss are expensed in the profit and loss account.
(i)
Debt instruments
Debt instruments mainly comprise of cash and bank balances, trade, intercompany and other receivables (excluding
prepayments) and investments. Trade, intercompany and other receivables are stated initially at fair value and subsequently at
amortised cost as reduced by appropriate allowances for estimated irrecoverable amounts.
Debt instruments that are held for collection of contractual cash flows where those cash flows represent solely payments
of principal and interest are measured at amortised cost. A gain or loss on a debt instrument that is subsequently measured
at amortised cost and is not part of a hedging relationship is recognised in the profit and loss account when the asset is
derecognised or impaired. Interest income from these financial assets is recognised in the profit and loss account using the
effective interest rate method.
Debt instruments that are held for trading as well as those that do not meet the criteria for classification as amortised cost or
FVOCI are classified as FVPL. Movement in fair values and interest income is recognised in the profit and loss account in the
period in which it arises.
Debt instruments that are held for collection of contractual cash flows and for sale, and where the assets’ cash flows represent
solely payments of principal and interest, are classified as FVOCI. Movements in fair values are recognised in other comprehensive
income (“OCI”) and accumulated in fair value reserve, except for the recognition of impairment gains or losses, interest income
and foreign exchange gains and losses, which are recognised in the profit and loss account. When the financial asset is
derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to the profit and loss account.
Interest income from these financial assets is recognised in the profit and loss account using the effective interest rate method.
(ii) Equity investments
The Group subsequently measures all its equity investments at their fair values. Equity investments are classified as FVPL with
movements in their fair values recognised in the profit and loss account in the period in which the changes arise. For equity
investments where the Group has elected to recognise changes in fair value in OCI, movements in fair values are presented as
“fair value changes” in OCI. Dividends from equity investments are recognised in the profit and loss account.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been
transferred and the Group has transferred substantially all risks and rewards of ownership.
On disposal of a debt instrument, the difference between the carrying amount and the sale proceeds is recognised in the profit
and loss account. Any amount previously recognised in other comprehensive income relating to that asset is reclassified to the
profit and loss account.
On disposal of an equity investment, the difference between the carrying amount and sales proceed is recognised in the profit
and loss account if there was no election made to recognise fair value changes in other comprehensive income. If there was
an election made, any difference between the carrying amount and sale proceeds would be recognised in other comprehensive
income and transferred to retained profits along with the amount previously recognised in other comprehensive income relating
to that asset.
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand and bank deposits
which are subject to an insignificant risk of change in value. For cash subjected to restriction, assessment is made on the economic
substance of the restriction and whether they meet the definition of cash and cash equivalents.
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when the Company and the Group
has a legally enforceable right to set off the recognised amounts; and intends either to settle on a net basis, or to realise the asset and
settle the liability simultaneously. A right to set-off must be available today rather than being contingent on a future event and must be
exercisable by any of the counterparties, both in the normal course of business and in the event of default, insolvency or bankruptcy.
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2.11 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 other
comprehensive income and accumulated in the hedging reserve, while the ineffective portion is recognised in the profit and loss
account. Amounts taken to other comprehensive income are reclassified to the profit and loss account when the hedged transaction
affects the profit and loss account.
For fair value hedges, changes in the fair value of the designated hedging instruments are recognised in the profit and loss account. The
hedged item is adjusted to reflect change in its fair value in respect of the risk hedged, with any gain or loss recognised in the profit and
loss account.
The Group documents at the inception of the transaction the relationship between the hedging instruments and hedged items, as well
as its risk management objectives and strategies for undertaking various transactions. The Group also documents its assessment,
both at hedge inception and on an ongoing basis, of whether the derivatives designated as hedging instruments are highly effective in
offsetting changes in fair value or cash flows of the hedged items.
2.12 Investments
Investments include equity investments classified as FVPL and FVOCI and debt investments classified as FVPL. See further in
Note 2.10.
The fair value of investments that are traded in active markets is based on quoted market prices at the balance sheet date. The quoted
market prices are the current bid prices. The fair value of investments that are not traded in an active market 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.
2.13 Stocks
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. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
costs of completion and applicable variable selling expenses.
Properties held for sale are stated at the lower of cost and net realisable value. Cost includes cost of land and construction, related
overheads expenditure, and financing charges incurred during the period of development. Net realisable value represents the estimated
selling price less costs to be incurred in selling the property.
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.
2.14 Contract Assets and Contract Liabilities
For contract where the customer is invoiced on a milestone payment schedule or over the period of the contract, a contract asset is
recognised if the value of the contract work transferred by the Group exceed the receipts from the customer, and a contract liability is
recognised if the receipts from the customer exceed the value of the contract work transferred by the Group.
2.15 Impairment of Assets
Financial Assets
The Group assesses on a forward looking basis the expected credit losses associated with its debt financial assets carried at amortised
cost and fair value through other comprehensive income. The impairment methodology applied depends on whether there has been a
significant increase in credit risk. Note 35 details how the Group determines whether there has been a significant increase in credit risk.
For trade receivables and contract assets, the Group applies the simplified approach permitted by the SFRS(I) 9, which requires
expected lifetime losses to be recognised from initial recognition of the receivables.
Goodwill
Goodwill is tested for impairment annually and whenever there is an indication that the goodwill may be impaired. Goodwill included in
the carrying amount of an associated company or joint venture is tested for impairment as part of the investment.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (“CGU”s) expected to benefit
from the synergies of the combination. An impairment loss is recognised in the profit and loss account when the carrying amount of
the CGU, including goodwill, exceeds the recoverable amount of the CGU. The recoverable amount of a CGU is the higher of the CGU’s
fair value less cost to sell and value-in-use. The impairment loss is allocated first to reduce the carrying amount of goodwill allocated to
the CGU 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.
Annual Report 2021
148
NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
Other Non-Financial Assets
Tangible and intangible assets are tested for impairment whenever there is any indication that these assets may be impaired.
Management rights are tested for impairment annually and whenever there is an indication that the management rights may be
impaired.
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) 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, the recoverable amount is determined for CGU to which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or
CGU) is reduced to its recoverable amount. The difference between the carrying amount and recoverable amount is recognised as
impairment loss 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.
2.16 Financial Liabilities and Equity Instruments
Financial liabilities include trade, intercompany and other payables, bank loans and overdrafts. Trade, intercompany and other payables
are stated initially at fair value and subsequently carried at amortised cost. Interest-bearing bank loans and overdrafts are initially
measured at fair value and are subsequently measured at amortised cost. Interest expense calculated using the effective interest
method is recognised over the term of the borrowings in accordance with the Group’s accounting policy for borrowing costs (see
Note 2.22).
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.
2.17 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. Provisions are not
recognised for future operating losses.
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.
2.18 Leases
When a Group company is the lessee
At the inception of the contract, the Group assesses if the contract contains a lease. A contract contains a lease if the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration. Reassessment is only required when
the terms and conditions of the contract are changed.
Right-of-use assets
The Group recognises a right-of-use asset and lease liability at the date which the underlying asset is available for use. Right-of-use
assets are measured at cost which comprises the initial measurement of lease liabilities adjusted for any lease payments made at or
before the commencement date and lease incentive received. Any initial direct costs that would not have been incurred if the lease had
not been obtained are added to the carrying amount of the right-of-use assets. The right-of-use asset is subsequently depreciated using
the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of
the lease term.
Right-of-use assets (except for those which meets the definition of an investment property) are presented as a separate line on the
balance sheets. Right-of-use assets which meets the definition of an investment property is presented within “Investment Properties”
and accounted for in accordance with Note 2.5.
Lease liabilities
The initial measurement of lease liability is measured at the present value of the lease payments discounted using the implicit rate in
the lease, if the rate can be readily determined. If that rate cannot be readily determined, the Group uses its incremental borrowing rate.
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FINANCIAL REPORT
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Lease payments include the following:
-
-
Fixed payment (including in-substance fixed payments), less any lease incentives receivables;
Variable lease payment that are based on an index or rate, initially measured using the index or rate as at the commencement
date;
Amount expected to be payable under residual value guarantees;
The exercise price of a purchase option, if is reasonably certain to exercise the option; and
Payment of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
-
-
-
For contract that contain both lease and non-lease components, the Group allocates the consideration to each lease component on the
basis of the relative stand-alone price of the lease and non-lease component.
Lease liabilities are presented as a separate line on the balance sheets.
Lease liability is measured at amortised cost using the effective interest method. Lease liability shall be remeasured when:
-
-
-
There is a change in future lease payments arising from changes in an index or rate;
There is a change in the Group’s assessment of whether it will exercise an extension option; or
There is a modification in the scope or the consideration of the lease that was not part of the original term.
Lease liability is remeasured with a corresponding adjustment to the right-of-use asset, or is recorded in profit or loss if the carrying
amount of the right-of-use asset has been reduced to zero.
Short term and low value leases
The Group has elected to not recognise right-of-use assets and lease liabilities for short-term leases that have lease terms of 12 months
or less and low value leases. Lease payments relating to these leases are expensed to profit or loss on a straight-line basis over the
lease term.
Variable lease payments
Variable lease payments that are not based on an index or a rate are not included as part of the measurement and initial recognition of
the lease liability. The Group recognises these lease payments in profit or loss in the periods that triggered such lease payments. Details
of the variable lease payments are disclosed in Note 9.
Rent concessions
The Group has elected to apply the optional practical expedient under Amendments to SFRS(I) 16 Leases (Covid-19-Related Rent
Concessions beyond 30 June 2021).
Under the practical expedient, the Group, as a lessee, has elected not to assess whether a rent concession is a lease modification, if all
the following conditions are met:
-
The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the
consideration for the lease immediately preceding the change;
Any reduction in lease payments affects only payments originally due on or before 30 June 2022; and
There is no substantive change to other terms and conditions of the lease.
-
-
When a Group company is the lessor
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.
2.19 Assets classified as Held for Sale
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a
sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the
asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which
should be expected to qualify for recognition as a completed sale within one year from the date of classification.
When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary
are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling
interest in its former subsidiary after the sale.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and
fair value less costs to sell.
2.20 Revenue
Revenue consists of:
-
-
-
-
Revenue recognised on rigbuilding, shipbuilding and repairs, property construction and long term engineering contracts;
Sale of goods;
Rendering of services; and
Rental income from investment properties.
Annual Report 2021
150
NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
Revenue recognition
The Group enters into rigbuilding, shipbuilding and repairs, property construction and long term engineering contracts with customers.
These contracts are fixed in prices. Revenue is recognised when the control over the contract work is transferred to the customer.
At contract inception, the Group assesses whether the Group transfers control of the contract work over time or at a point in time by
determining if (a) its performance does not create an asset with an alternative use to the Group; and (b) the Group has an enforceable
right to payment for performance completed to-date.
The contract work, except for overseas property construction contracts, has no alternative use for the Group due to contractual
restriction, and the Group has enforceable rights to payment arising from the contractual terms. For these contracts, revenue is
recognised over time by reference to the Group’s progress towards completing the construction of the contract work. For overseas
property construction contracts, the Group does not have enforceable rights to payment arising from the contractual terms. Revenue
from overseas property construction contracts is recognised at a point in time when the rights to payment become enforceable.
The measure of progress for rigbuilding contracts, and shipbuilding and repair contracts, is determined based on the estimation of the
physical proportion of the contract work completed for the contracts with reference to engineers’ estimates. The measure of progress
for property construction and long term engineering contracts is determined based on the proportion of contract costs incurred to-date
to the estimated total contract costs. Costs incurred that are not related to the contract or that do not contribute towards satisfying a
performance obligation are excluded from the measure of progress.
An impairment loss is recognised in the profit or loss to the extent that the carrying amount of capitalised contract costs exceeds the
expected remaining consideration less any directly related costs not yet recognised as expenses.
Revenue from sale of goods is recognised when the Group satisfies a performance obligation by transferring control of a promised
good or service to the customer. The amount of revenue recognised is the amount of the transaction price allocated to the satisfied
performance obligation.
Revenue from the rendering of services including electricity supply, logistic services, operations and maintenance under service
concession arrangements, asset management fees, and telecommunication 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 or in accordance with terms of the service agreements.
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.
Rental income from operating leases on investment properties is recognised on a straight-line basis over the lease term.
2.21 Government Grants
Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance that the grant will be
received and the Group will comply with all the attached conditions.
Government grants receivable are recognised as income over the periods necessary to match them with the related costs which they
are intended to compensate, on a systematic basis. Government grants relating to expenses are shown separately as other income.
2.22 Borrowing Costs
Borrowing costs incurred to finance the development of properties and acquisition of fixed assets 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.
For Singapore trading properties which the Group recognises revenue over time, borrowing costs on the portion of the property
not ready for transfer of control to the purchasers are capitalised until the time when control is capable of being transferred to the
purchasers.
2.23 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.
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Share Plans Scheme
The Group operates share-based compensation plans. The fair value of the employee services received in exchange for the grant of
restricted shares and performance shares is recognised as an expense in the profit and loss account with a corresponding increase in
the share plan reserve over the vesting period. The total amount to be recognised over the vesting period is determined by reference to
the fair values of the restricted shares and performance shares granted on the respective dates of grant.
At each balance sheet date, the Group revises its estimates of the number of share plan awards that are expected to vest on the vesting
dates, and recognises the impact of the revision of the estimates in the profit and loss account, with a corresponding adjustment to the
share plan reserve over the remaining vesting period.
No expense is recognised for share plan awards that do not ultimately vest, except for share plan awards where vesting is conditional
upon a market condition, which are treated as vested irrespective of whether or not the market condition is satisfied, provided that all
other performance and/or service conditions are satisfied.
When share plan awards are released, the share plan reserve is transferred to share capital if new shares are issued, or to the treasury
shares account when treasury shares are re-issued to the employee.
2.24 Income Taxes
Current income tax is 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.
Deferred income tax is measured at the tax rates that are expected to apply when the related deferred income tax asset/liability is
realised/settled, based on the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date, and
based on the tax consequence that will follow from the manner in which the Group expects, at the balance sheet date, to recover or
settle the carrying amounts of its assets and liabilities.
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.
2.25 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. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on
the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are
not retranslated.
Foreign Currency Translation
For inclusion in the Group’s financial statements, the assets and liabilities of foreign subsidiaries, associated companies and joint
ventures that are in functional currencies other than Singapore Dollars are translated into Singapore Dollars at the exchange rates ruling
at the balance sheet date. Profit or loss of foreign subsidiaries, associated companies and joint ventures are translated into Singapore
Dollars using the average exchange rates for the financial year. Goodwill and fair value adjustments arising on acquisition of a foreign
entity are treated as assets and liabilities of the foreign subsidiaries, associated companies and joint ventures. Exchange differences
due to such currency translation are recognised in other comprehensive income and accumulated in Foreign Exchange Translation
Account until disposal.
Annual Report 2021
152
NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
Disposal or partial disposal of a foreign operation
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss
of control over a subsidiary that includes a foreign operation, loss of joint control over a jointly controlled entity that includes a foreign
operation, or loss of significant influence over an associated company that includes a foreign operation), all of the accumulated
exchange differences in respect of that operation attributable to the Group are reclassified from equity to profit or loss. Any exchange
differences that have previously been attributed to non-controlling interests are derecognised, but they are not reclassified to profit or
loss.
In the case of a partial disposal (i.e. no loss of control) of a subsidiary that includes a foreign operation, the proportionate share of
accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other
partial disposals (i.e. of associated companies or jointly controlled entities that do not result in the Group losing significant influence or
joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.
2.26 Share Capital and Perpetual Securities
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted
against the share capital account.
When shares are reacquired by the Company, the amount of consideration paid and any directly attributable transaction cost is
recognised directly in equity. Reacquired shares are classified as treasury shares and presented as a deduction from total equity. When
treasury shares are subsequently sold or reissued, the cost of treasury shares is reversed from the treasury shares account and the
realised gain or loss on sale or reissue, net of any directly attributable incremental transaction costs, is recognised in non-distributable
capital reserve. Voting rights related to treasury shares are nullified for the Group and no dividends are allocated to them respectively.
Perpetual securities which do not result in the Group having a contractual obligation to deliver cash or another financial asset, or to
exchange financial assets or financial liabilities with the holder under conditions that are potentially unfavourable to the Group, are
classified as equity. Distributions arising from such instruments are recognised in equity as there is no contractual obligation to pay
distributions on these instruments. Incremental external costs directly attributable to the issuance of such instruments are accounted
for as a deduction from equity.
2.27 Segment Reporting
The Group has five main segments, of which there are six reportable operating segments, namely Offshore & Marine, Infrastructure &
Others, Urban Development, Connectivity, Asset Management and Corporate & Others. Management monitors the results of each of the
main segments for the purpose of making decisions on resource allocation and performance assessment.
2.28 Critical Accounting Judgments and Estimates
(a)
Critical judgments in applying the Group’s accounting policies
In the process of applying the Group’s accounting policies, there is no instance of application of judgments which is expected to
have a significant effect on the amounts recognised in the financial statements, apart from those involving estimations and as
follows:
(i)
Control over Keppel REIT
The Group has approximately 47% (2020: approximately 49%) gross ownership interest of units in Keppel REIT as at 31
December 2021. Keppel REIT is managed by Keppel REIT Management Limited (“KRML”), a wholly-owned subsidiary of
the Group. The Group has provided an undertaking to the trustee of Keppel REIT to grant the other unitholders the right
to endorse or re-endorse the appointment of directors of KRML at the annual general meetings of Keppel REIT. The
Group has determined that it does not have control over Keppel REIT but continues to have significant influence over the
investment.
(ii)
Interest Rate Benchmark Reform – Phase 1
SOR
In calculating the change in fair value attributable to the hedged SGD borrowings, the Group assumes that:
-
-
-
The existing floating-rate borrowings will move to SORA at the same time as the interest rate swaps (hedging
instruments) with similar adjustment spreads;
No other material changes to the terms of the borrowings and interest rate swaps are anticipated; and
The interest rate swaps will not be derecognised.
Given that the critical terms are assumed to continue to match, the change in fair value of the hedged risk is the same as
the change in fair value of the hedging instrument. Therefore, no hedge ineffectiveness is recognised as a result of the
expected transition of the cash flow hedges from SOR to SORA.
Keppel Corporation Limited
FINANCIAL REPORT
153
USD LIBOR
In calculating the change in fair value attributable to the hedged USD borrowings, the Group assumes that:
-
-
-
The existing floating-rate borrowings will move to SOFR at the same time as the interest rate swaps (hedging
instruments) with similar adjustment spreads;
No other material changes to the terms of the borrowings and interest rate swaps are anticipated; and
The interest rate swaps will not be derecognised.
Given that the critical terms are assumed to continue to match, the change in fair value of the hedged risk is the same as
the change in fair value of the hedging instrument. Therefore, no hedge ineffectiveness is recognised as a result of the
expected transition of the cash flow hedges from USD LIBOR to SOFR.
(b)
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:
(i)
(ii)
Coronavirus Disease 2019 (“COVID-19”) and volatility in oil prices
The evolving situation of the COVID-19 pandemic, including emergence of new variants of the virus, and volatility in oil
prices could impact the assessment of the carrying amounts of the Group’s assets and liabilities. In the assessment for the
current period, management has carried out a review to assess the assumptions used in the assessment of the carrying
values of certain assets of the Group. Management has exercised judgment in determining the significant assumptions
used and has relied on information currently available in the assessment of the appropriateness of the carrying values of
the Group’s assets as at 31 December 2021.
Should the COVID-19 situation take a longer than expected period to recover and/or the recovery of the dayrates or
utilisation rates take a longer period or to a lower level than expected, the assessment of the carrying amounts of the
assets of the Group could be impacted, and material provisions may be made and additional liabilities may arise in the
subsequent financial years.
Recoverability of contract asset and receivable balances in relation to offshore & marine construction contracts
Contracts with Sete Brasil (“Sete”)
The Group had previously entered into contracts with Sete for the construction of six rigs for which progress payments
from Sete had ceased since November 2014. In April 2016, Sete filed for bankruptcy protection and its authorised
representatives had been in discussion with the Group on the eventual completion and delivery of some of the rigs. In
October 2019, the Settlement Agreement as well as the winning bid proposal for Magni Partners (Bermuda) Ltd (“Magni”)
to purchase four Sete subsidiaries, two of which are special-purpose entities (“SPEs”) for uncompleted rigs constructed
by the Group, was approved by the creditors. As part of the Settlement Agreement, which is subject to fulfilment of certain
conditions precedent, the Group will take over ownership of remaining four uncompleted rigs and will be able to explore
various options to extract the best value from these assets.
On 12 October 2021, the Group entered into a 2nd Supplemental Agreement to the Settlement Agreement in relation to the
two SPEs and together with the Supplemental Agreement signed on 31 May 2021 for the four uncompleted rigs, essentially
terminated all the EPC contracts and related agreements entered into in relation to the six rigs with no penalties, refunds
and/or any additional amounts being due to any party, and the parties will waive all rights to any claims. The Group had
obtained full title to the four uncompleted rigs, albeit two of which are still encumbered. Sete is to procure the release
of the mortgage on the two encumbered rigs placed with the ship registry. The receivables the Group has with Sete of
approximately US$260,000,000 shall be recognised as an undisputed debt and be recognised as part of the debt under the
Judicial Reorganisation Plan. The outstanding amount will be paid to the Group proportionally and pari passu with other
creditors of Sete as part of, and out of proceeds of, its Judicial Reorganisation Plan.
Management estimated the net present value of the cashflows relating to the construction contract for two rigs with
Magni. In addition, management performed an assessment to estimate the cost of discontinuance of related agreements
of the EPC contracts with Sete, offset by possible options in extracting value from the uncompleted rigs and possible
payout from the Judicial Reorganisation Plan.
Arising from the above assessment, the loss allowance for trade debtors of $183,000,000 (2020: $183,000,000) and the
provision for related contract costs of $245,000,000 (2020: $245,000,000) made in prior years remain adequate to address
the cost of discontinuance, salvage cost and unpaid progress billings relating to EPC contracts with Sete.
Annual Report 2021
154
NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
Taking into consideration cost of completion, cost of discontinuance, salvage cost and unpaid progress billings with
regards to these rigs, the total cumulative loss recognised in relation to these rig contracts amounted to $476,000,000 as
at 31 December 2021 (2020: $476,000,000).
The above assessment had been made with the following key assumptions:
(i)
Petrobras will continue to require the rigs for execution of its business plans and will charter them at the dayrates
and tenure previously agreed with Sete;
(ii) Magni or any other potential investor will be able to secure financing to complete the purchase of the rigs with Sete
and complete the construction contract with the Group at the terms previously discussed with Magni; and
The future cost of construction of the rigs are not materially different from management’s current estimation.
(iii)
At the date of these financial statements, the Group continues to be in active discussion with relevant stakeholders as Sete
negotiates with Petrobras. Should the conclusion of the negotiation result in significant changes to the key assumptions as
disclosed above, additional material provision may be required, including adjustments to the net carrying amounts (net of
total cumulative losses as described above) relating to the Sete contracts amounting to $157,449,000 as at 31 December
2021 (2020: $113,645,000).
Other contracts
As at 31 December 2021, the Group had several rigs that were under construction for customers where customers
had requested for deferral of delivery dates of the rigs in prior years and have higher counterparty risks, amounting to
$1,707,190,000 (2020: $1,653,547,000). In the event that the customers are unable to fulfill their contractual obligations,
the Group can exercise the right to retain payments received to date and retain title to the rigs.
The Group had also delivered rigs to customers where receipt of the construction revenue have been deferred under
certain financing arrangements, amounting to $791,952,000 as at 31 December 2021 (2020: $848,117,000) of which
$791,952,000 (2020: $772,443,000) is secured on the rigs and $nil (2020: $75,674,000) is unsecured but the Group has
obtained parental guarantee from the customers.
Management has assessed each deferred construction project individually to make judgment as to whether the customers
will be able to fulfil their contractual obligations and take delivery of the rigs at the revised delivery dates. Management has
also performed an assessment of the expected credit loss on contract assets and trade receivables of deferred projects
and of rigs delivered on financing arrangements to determine if a provision for expected loss is necessary.
Whilst there are indicators of improvement during the year, the global economic environment continues to be significantly
affected by COVID-19 and the oil and gas industry, in particular, has experienced an unprecedented and very difficult period
as a result of lower expected demands. Management expects the full recovery for the industry to take some time. The
Group remains cognizant of these developments and have been closely monitoring the market and industry developments
relating to utilisation rates, dayrates, oil price outlook and other relevant information.
For the above contract assets and secured trade receivables, in the event that the customers are unable to fulfil their
contractual obligations, management has considered the most likely outcome for the rigs delivered or under construction
is for the Group to take possession of the asset and charter it out to work with an operator. The value of the rig on this
basis would be based on an estimation of the value-in-use (“VIU”) of the rig, i.e. through estimating the net present value of
cash flows from operating the rig over the useful life of the asset.
Management has engaged independent professional firms to assist in their assessment on whether the VIU of the rigs
exceed the carrying values of contract assets and trade receivables as at 31 December 2021. The VIU model used by the
independent firm is consistent with prior years and is based on Discounted Cash Flow (“DCF”) calculations that cover each
class of rig. In addition to the independent firm responsible for the valuation based on DCF calculations, management
has also engaged a separate industry expert to independently provide a view of the market outlook, assumptions and
parameters which are used in the valuation based on estimation of VIU. Key inputs into the estimation of the VIU include
dayrates, cost assumptions, utilisation rates, discount rates and estimated commencement of deployment of the assets.
The valuation of the rigs would decrease if the expected income from operating the rigs decline, or discount rates were
higher, or the estimated commencement of deployment were delayed.
Management has also appointed an independent financial advisor to conduct an assessment of the recoverability of
unsecured receivables from a customer and secured receivables from another customer as at 31 December 2021.
Keppel Corporation Limited
FINANCIAL REPORT
155
Based on the results of the assessments, the Group did not recognise any (2020: $430,842,000) expected credit loss on
contract assets, but recognised an expected credit loss allowance of $75,952,000 (2020: $169,611,000) on receivables
during the financial year ended 31 December 2021 as follows:
As at 31 December 2021
Gross balance
Less: Expected credit loss
Balance, 1 January
Currency alignment
Impairment charged
Balance, 31 December
Net balance
As at 31 December 2020
Gross balance
Less: Expected credit loss
Balance, 1 January
Currency alignment
Impairment charged
Reclassification (Note 16)
Balance, 31 December
Net balance
Contract assets
$’000
Financing to customers
Secured
$’000
Unsecured
$’000
Total
$’000
3,393,984
892,407
141,654
4,428,045
432,541
-
-
432,541
2,961,443
99,162
1,293
-
100,455
791,952
62,921
2,781
75,952
141,654
-
594,624
4,074
75,952
674,650
3,753,395
2,933,715
871,605
138,595
3,943,915
21,000
-
430,842
(19,301)
432,541
2,501,174
-
(4,634)
103,796
-
99,162
772,443
-
(2,894)
65,815
-
62,921
75,674
21,000
(7,528)
600,453
(19,301)
594,624
3,349,291
The valuations of the rigs based on estimated VIU were most sensitive to discount rates and dayrates.
•
•
A discount rate of 7.6% has been used in the valuation as at 31 December 2021 (2020: 7%). An increase of 1%
of the discount rate would increase the expected credit loss by approximately S$7,000,000 for the year (2020:
S$7,000,000).
A decrease in dayrates of US$5,000 per day across the entire asset useful life of 25 years would not increase the
expected credit loss (2020: $nil).
(iii)
Impairment of non-financial assets
Determining whether the carrying value of a non-financial asset is impaired requires an estimation of the value in use of
the cash-generating units (“CGU”s). This requires the Group to estimate the future cash flows expected from the CGUs
and an appropriate discount rate in order to calculate the present value of the future cash flows. Management performed
impairment tests on fixed assets (Note 7), investments in subsidiaries (Note 10), investments in associated companies
and joint ventures (Note 11), and intangibles (Note 14) as at 31 December 2021.
Management has performed the impairment assessment of its investments and related exposures in KrisEnergy Limited
(“KrisEnergy”). Refer to Note 11(b) for more details on the impairment assessment of Group’s investments in KrisEnergy.
Management has also performed an impairment assessment of the goodwill arising from acquisition of M1 Limited.
Details of the impairment testing is disclosed in Note 14.
(iv) Revenue recognition and contract cost
The Group recognises contract revenue over time for rigbuilding contracts, and shipbuilding and repair contracts by
reference to the estimation of the physical proportion of the contract work completed for the contracts with reference
to engineers’ estimates. The Group also recognises contract revenue over time for long term engineering contracts
by reference to the proportion of contract costs incurred to-date to the estimated total contract costs. The stage of
completion is measured in accordance with the accounting policy stated in Note 2.20. When it is probable that the
total contract costs will exceed the total contract revenue, the expected loss is recognised as an expense immediately.
Significant assumptions are required in determining the stage of completion and significant judgment is required in the
estimation of the physical proportion of the contract work completed for the contracts; and the estimation of total costs
on the contracts, including contingencies that could arise from variations to original contract terms and claims. 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 25.
Annual Report 2021
156
NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
(v)
Income taxes
The Group has exposure to income taxes in numerous jurisdictions. Significant assumptions are 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 amounts of taxation and deferred taxation are disclosed in the
balance sheet.
(vi) 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, latent defects 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 judgment 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.
EIG Energy Fund XIV, L.P., et al. v. Keppel Offshore & Marine Ltd., (United States District Court, Southern District of New York)
In February 2018, the Group was served a summons by eight investment funds (“Plaintiffs”) managed by EIG Management
Company, LLC (“EIG”) where a civil action was commenced by the Plaintiffs pursuant to the Racketeer Influenced and
Corrupt Organizations Act (“RICO”) in the United States District Court, Southern District of New York. In April 2018, the
Plaintiffs added, among other things, a state law claim for aiding and abetting fraud. In May 2020, the Court dismissed the
Plaintiffs’ civil RICO conspiracy claim but denied the Group’s motion to dismiss the Plaintiff’s claim on aiding and abetting
fraud under New York state law. Consequently, the Plaintiffs currently seek US$221 million plus punitive damages, interest,
attorney’s fees, costs and disbursements, based on the remaining claim for aiding and abetting fraud.
Following completion of factual depositions, in late September 2021, the Plaintiffs and the Group have each served a
motion for summary judgment, seeking judgment on the abovementioned claim which the Plaintiffs have presently
quantified at approximately US$820 million in aggregate, including US$442 million in punitive damages and US$157
million as pre-judgment interest. Each party’s opening brief, opposition brief and reply brief were filed with the Court on 2
November 2021. There currently is no scheduled hearing date for the summary judgment motions.
Based on the advice obtained from an external legal counsel, the remaining claim for aiding and abetting fraud is without
merit and the Group will vigorously defend itself. As at the date of these financial statements, based on advice obtained
from external legal counsel, it is premature to predict or determine the eventual outcome of this remaining claim and
hence, the potential amount of loss cannot currently be assessed.
Termination of Two Mid-Water Semisubmersible Drilling Rig Contracts
A subsidiary of Keppel Offshore & Marine Ltd (“KOM subsidiary”) terminated two contracts with subsidiaries of a customer
for the construction of two mid-water semisubmersible drilling rig for harsh environment use:
(i)
In June 2020, the buyer under the first of these contracts (“First Contract”) alleged a breach of contract by the KOM
subsidiary and purportedly terminated the First Contract and sought recovery of the payments already made to
the KOM subsidiary with interest. The allegations by the buyer were refuted and the purported termination of the
contract was rejected by the KOM subsidiary. The buyer subsequently failed to pay an instalment due under the First
Contract. Non-payment of any instalment by the customer is a default in accordance with the First Contract, entitling
the KOM subsidiary to terminate the First Contract, retain all payments received to date (approximately US$54
million), and seek compensation for the work done to date and claim ownership of the rig. The KOM subsidiary had
therefore issued a notice of termination of the First Contract to the buyer and commenced arbitration to enforce its
rights under the First Contract against the buyer.
(ii)
In December 2020, the KOM subsidiary issued a notice of termination of the second of these contracts (“Second
Contract”) and commenced arbitration to enforce its rights under the Second Contract against the buyer, which
rights include the right to retain the amounts already paid by the buyer to date of approximately US$43 million and to
seek reimbursement of the KOM subsidiary’s costs of the project to the date of termination.
Subsequent to the issuance of this notice of termination, the KOM subsidiary has received a notice from the buyer
purporting to terminate the Second Contract, alleging breaches under the Second Contract. As it had already
terminated the Second Contract, the KOM subsidiary’s position is that the notice of termination can have no effect.
In any event, the KOM subsidiary refutes the abovementioned allegations by the buyer in the notice.
The Group is working with legal advisors to enforce its rights and will continue to evaluate the potential financial impact
in consultation with its advisors. Based on currently available information, including opinion from the legal advisors, no
provision was made in respect of the recovery of the payments already made to the Group by the two buyers.
Keppel Corporation Limited
FINANCIAL REPORT
157
Global resolution with criminal authorities in relation to corrupt payments
In 2017, KOM reached a global resolution with the criminal authorities in the United States of America, Brazil and Singapore
in relation to corrupt payments made in relation to KOM’s various projects with Petrobras and Sete Brasil in Brazil, which
were made with knowledge or approval of former KOM executives. Fines in an aggregate amount of US$422,216,980, or
equivalent to approximately S$570 million, paid/payable had been allocated between the three jurisdictions.
As part of the global resolution, KOM accepted a Conditional Warning from the Corrupt Practices Investigation Bureau
(“CPIB”) in Singapore, and entered into a Deferred Prosecution Agreement (“DPA”) with the U.S. Department of Justice
(“DOJ”), while Keppel FELS Brasil S.A., a wholly-owned subsidiary of KOM, entered into a Leniency Agreement with the
Public Prosecutor’s Office in Brazil, the Ministerio Publico Federal (“MPF”) which became effective following the approval
of the Fifth Chamber for Coordination and Review of the MPF in April 2018. In addition, Keppel Offshore & Marine USA, Inc
(“KOM USA”), also a wholly-owned subsidiary of KOM, pleaded guilty to one count of conspiracy to violate the U.S. Foreign
Corrupt Practices Act and entered into a Plea Agreement with the DOJ.
KOM has successfully complied with its obligations under the DPA and the DPA has accordingly concluded on 22
December 2020. KOM has also been in compliance with its obligations under the Conditional Warning issued by the CPIB
and the Leniency Agreement entered into with the MPF. As part of the applicable fines payable under the global resolution,
a sum of US$52,777,122.50 (less any penalties that KOM may pay to specified Brazilian authorities) was payable to CPIB
within three years from the date of the Conditional Warning and has been included in accrued expenses since FY 2017. The
discussions with the specified Brazilian authorities remain ongoing, and CPIB has agreed to extend this three-year period
for a further 12 months to 22 December 2021 and thereafter for a further 6 months to 22 June 2022.
In June 2020, the Office of the Comptroller General of Brazil (“CGU”) published a notice in the Official Gazette (“Notice”) to
the effect that CGU has initiated an administrative enforcement procedure (“AEP”) against KOM, Prismatic Services Ltd.,
Keppel FELS Ltd., Keppel FELS Brasil S.A., and BrasFELS S.A., in relation to alleged irregularities under the Brazilian Anti-
Corruption Statute. Neither the Notice nor any summons has been served on any of the foregoing entities to date.
The Notice does not provide any factual particulars and the Company is therefore currently unable to assess the matter or
its impact, if any. The Company understands from CGU that the AEP will not affect the ongoing negotiations with the Brazil
authorities, and that the AEP has been suspended pending these ongoing discussions.
Based on currently available information, including opinion from the legal advisors, no additional provision was made in
relation to the ongoing discussions with the specified Brazilian authorities.
Arbitration in relation to two Floating Production Storage and Offloading Units
Two of the Company’s wholly-owned subsidiaries have received a request for arbitration from the customer (“Claimant”)
to two engineering, procurement and construction contracts relating to Floating Production Storage and Offloading units
(“EPC Contracts”). The Claimant has withheld a total of approximately US$11.3 million due to the subsidiaries and has
claimed a further amount of approximately US$38.2 million on the basis that the Claimant is allegedly entitled to a price
reduction and remediation costs associated with defective equipment supplied under the EPC contracts (the “Claim”).
The subsidiaries, in consultation with legal advisors, deny the Claimant’s alleged right to such price reductions and the
defective equipment and vehemently challenge the Claimant’s right to withhold payments due to the subsidiaries and its
supposed right to claim such price reductions. The subsidiaries intend to vigorously defend the claim and in addition, seek
remedies, including counterclaims for the sums unduly withheld by the Claimant.
Based on currently available information, including opinion from the legal advisors, no provision was made in respect of the
Claim as at 31 December 2021.
(vii) Useful lives of network and related application systems
The cost of network and related application systems is depreciated on a straight-line basis over the assets’ estimated
economic useful lives. Management estimated the useful lives of these fixed assets to be within 5 to 25 years. These
are common life expectancies applied in the telecommunications industry. Changes in the expected level of usage and
technological developments could impact the economic useful life and the residual values of these assets, therefore, future
depreciation charges could be revised. The carrying amounts of the Group’s network and related application systems at
the end of the reporting period are disclosed in Note 7 to the financial statements.
Annual Report 2021
158
NOTES TO THE FINANCIAL STATEMENTS
2.
Significant accounting policies (continued)
(viii) Revaluation of investment properties
The Group carries its investment properties at fair value with changes in fair value being recognised in the profit and loss
account, determined annually by independent professional valuers on the highest and best use basis except for significant
investment properties which are revalued on a half-yearly basis.
For the purpose of the financial statements for the year ended 31 December 2021, valuations were obtained from the valuers
for the Group’s investment properties, and the resultant fair value changes were recognised in the profit and loss account.
In determining the fair values, the valuers have used valuation techniques which involve certain estimates. The key
assumptions to determine the fair value of investment properties include market-corroborated capitalisation rate,
price of comparable plots and properties, estimated construction costs to complete, net initial yield and discount rate.
The valuation reports obtained from independent valuers for certain properties have highlighted the uncertainty of
the COVID-19 outbreak and material valuation uncertainty where a higher degree of caution should be attached to the
valuation than would normally be the case. Accordingly, the valuation of these investment properties may be subjected to
more fluctuation than during normal market conditions.
In relying on the valuation reports, management has exercised its judgment to ensure that the valuation methods
and estimates are reflective of current market conditions. The carrying amount of investment properties and the key
assumptions used to determine the fair value of the investment properties are disclosed in Notes 8 and 35.
(ix)
Estimating net realisable value of stocks
The net realisable value of stocks represent the estimated selling price for these stocks less all estimated cost of
completion and costs necessary to make the sale.
As at 31 December 2021, stocks under work-in-progress amounted to $1,289,838,000 (Note 15). The assessment of
the carrying value of these stocks amounting to $1,137,665,000 were performed in conjunction with the recoverability
assessment of contract assets based on a VIU approach as described in Note 2.28(b)(ii).
Based on the results of the VIU assessments, the Group did not recognise further impairment on stocks under work-in-
progress for the financial year ended 31 December 2021 (2020: $41,508,000 and $50,000,000 in years prior to 2020).
The valuations of these stocks under work-in-progress based on estimated VIU were most sensitive to discount rates,
dayrates and delay in charter start date.
•
•
•
An increase of 1% of the discount rate would result in an impairment of approximately $46,500,000
(2020: $158,000,000).
A decrease in dayrates of US$5,000 per day across the entire asset life of 25 years would not result in an impairment
(2020: $21,000,000).
A delay in charter start date of 12 months would result in an impairment of approximately $24,200,000
(2020: $85,000,000).
For properties held for sale, the allowance for foreseeable losses is estimated taking into account the net realisable values
and estimated total construction costs. The net realisable values are based on recent selling prices for the development
project or comparable projects or independent valuation and the prevailing market conditions less costs to be incurred
in selling the property. The estimates and assumptions used are subject to risk and uncertainty in view of the economic
uncertainty brought about by the COVID-19 pandemic. The estimated total construction costs include contracted amounts
plus estimated costs to be incurred taking into consideration relevant data and trend. The allowance is progressively
reversed for those residential units sold above their carrying amounts.
(x)
Fair value measurement of unquoted investment funds
In determining the fair value of unquoted investment funds, the Group relies on the net asset values as reported in the
latest available capital account statements provided by third-party fund managers.
The fund managers measure the fair value of underlying investments of the funds based on:
(i)
(ii)
Last quoted bid price for all quoted investments;
Valuation technique for unquoted investments where there is no active market.
Valuation techniques used by the third-party fund managers include using recent arm’s length transactions between
knowledgeable, willing parties (if available), reference to the current fair value of other instruments that are substantially
the same, comparable company approach, discounted cash flow analyses, option pricing models, and latest round of fund
raising.
The availability of observable inputs can vary from investment to investment. For certain investments classified
under Level 3 of the fair value hierarchy, the valuation could be based on models or inputs that are less observable or
unobservable in the market and the determination of the fair values require significant judgement. Those estimated values
do not necessarily represent the amounts that may be ultimately realised due to the occurrence of future events which
could not be reasonably determined as at the balance sheet date.
These unobservable inputs that require significant judgement have been disclosed in Note 35.
Keppel Corporation Limited
FINANCIAL REPORT
159
3.
Share capital
Balance at 1 January
Issue of shares under share plans
Treasury shares transferred pursuant to share plans
Treasury shares purchased
Balance at 31 December
Balance at 1 January
Issue of shares under share plans
Treasury shares transferred pursuant to share plans
Treasury shares purchased
Balance at 31 December
Group and Company
Number of Ordinary Shares (“Shares”)
Issued Share Capital
Treasury Shares
2021
2020
2021
2020
1,820,557,767
-
-
-
1,820,557,767
1,818,394,180
2,163,587
-
-
1,820,557,767
(3,051,474)
-
4,668,215
(2,560,000)
(943,259)
(2,014,736)
-
2,829,890
(3,866,628)
(3,051,474)
Issued Share Capital
Treasury Shares
Amount ($’000)
2021
2020
1,305,668
-
-
-
1,305,668
1,291,722
13,946
-
-
1,305,668
2021
(13,690)
-
22,114
(13,048)
(4,624)
2020
(14,009)
-
19,359
(19,040)
(13,690)
Fully paid ordinary shares, which have no par value, carry one vote per share and carry a right to dividends declared by the Company.
During the financial year, the Company transferred 4,668,215 (2020: 2,829,890) treasury shares to employees under vesting of Shares
released under the KCL Share Plans. The Company also purchased 2,560,000 (2020: 3,866,628) treasury shares in the Company in the
open market during the financial year. The total amount paid was $13,048,000 (2020: $19,040,000). Except for the transfer, there was no
other sale, disposal, cancellation and/or use of treasury shares during the financial year.
KCL Share Plans
The KCL Performance Share Plan (“KCL PSP”) and KCL Restricted Share Plan (“KCL RSP”) were approved by the Company’s
shareholders at the Extraordinary General Meeting of the Company on 23 April 2010. The KCL Performance Share Plan 2020 (“KCL PSP
2020”) and KCL Restricted Share Plan 2020 (“KCL RSP 2020”) were approved by the Company’s shareholders at the Annual General
Meeting held on 2 June 2020, replacing the KCL PSP and KCL RSP respectively with effect from 2 June 2020. The KCL PSP and KCL
RSP were terminated on the same day.
The share plans are administered by the Remuneration Committee whose members are:
Till Bernhard Vestring (Chairman)
Danny Teoh
Jean-François Manzoni
During the financial year, nil (2020: 25,641) Shares under the KCL Restricted Share Plan (“KCL RSP”), 2,955,417 (2020: 4,315,136)
Shares under the KCL Restricted Share Plan – Deferred Shares (“KCL RSP-Deferred Shares”), 1,712,798 (2020: nil) Shares under the
KCL Restricted Share Plan 2020 – Deferred Shares (“KCL RSP 2020-Deferred Shares”) and nil (2020: 652,700) Shares under the KCL
Performance Share Plan (“KCL PSP”) were vested.
Annual Report 2021
160
NOTES TO THE FINANCIAL STATEMENTS
3.
Share capital (continued)
Details of the KCL RSP, KCL RSP-Deferred Shares, KCL RSP 2020-Deferred Shares, KCL PSP, KCL PSP 2020, KCL PSP - Transformation
Incentive Plan (“KCL PSP-TIP”), KCL PSP – M1 Transformation Incentive Plan (“KCL PSP-M1 TIP”) and the KCL PSP 2020 -
Transformation Incentive Plan (“KCL PSP 2020-TIP”) are as follows:
Plan Description
KCL RSP
Award of fully-paid ordinary shares
of the Company, conditional on
achievement of pre-determined
targets at the end of a one-year
performance period
KCL RSP-Deferred Shares
& KCL RSP 2020-Deferred Shares
Award of fully-paid ordinary shares
of the Company
Performance Conditions
Return on Equity
-
KCL PSP & KCL PSP 2020
Award of fully-paid ordinary shares
of the Company, conditional on
achievement of pre-determined
targets over a three-year
performance period
(a) Absolute Total Shareholder’s
Return
(b) Return on Capital Employed
(c) Net Profit
0% to 150% of the contingent award
granted, depending on achievement
of pre-determined targets
If pre-determined targets are
achieved, awards will vest at the
end of the three-year performance
period subject to fulfilment of
service requirements
0% to 100% of the contingent award
granted, depending on achievement
of pre-determined targets
If pre-determined targets are
achieved, awards will vest equally
over three years subject to
fulfilment of service requirements
100% of the awards granted
Awards will vest equally over three
years subject to fulfilment of service
requirements
Final Award
Vesting Condition
and Schedule
Plan Description
KCL PSP-TIP
KCL PSP-M1 TIP
KCL PSP 2020-TIP
Award of fully-paid ordinary shares
of the Company, conditional on
achievement of pre-determined
targets over a six-year performance
period
Performance Conditions
(a) Absolute Total Shareholder’s
Return
(b) Corporate Scorecard
Achievement comprising pre-
determined stretched financial
and non-financial targets for the
Group
(c) Individual Performance
Achievement
Two separate awards of fully-paid
ordinary shares of the Company,
conditional on achievement of pre-
determined targets over a three-year
and six-year performance period
respectively
(a) Net Profit
(b) Corporate Scorecard
Achievement comprising pre-
determined stretched financial
and non-financial targets for the
Group
(c) Net Promoter Score
(d) Individual Performance
Achievement
Award of fully-paid ordinary shares
of the Company, conditional on
achievement of pre-determined
targets over a five-year performance
period
(a) Absolute Total Shareholder’s
Return
(b) Corporate Scorecard
Achievement comprising pre-
determined stretched financial
and non-financial targets for the
Group
(c) Individual Performance
Achievement
(d) Asset Monetisation and Cross-
BU Revenue targets
Final Award
Vesting Condition
and Schedule
0% to 150% of the contingent award
granted, depending on achievement
of pre-determined targets
0% to 150% of the contingent award
granted, depending on achievement
of pre-determined targets
0% to 150% of the contingent award
granted, depending on achievement
of pre-determined targets
If pre-determined targets are
achieved, awards will vest at the
end of the six-year performance
period subject to fulfilment of
service requirements. Performance
conditions may be subject to re-
testing at the end of the six-year
performance period
If pre-determined targets are
achieved, the two separate awards
will vest at the end of the three-year
and six-year performance period
subject to fulfilment of service
requirements
If pre-determined targets are
achieved, awards will vest at the
end of the five-year performance
period subject to fulfilment of
service requirements. Performance
conditions may be subject to re-
testing at the end of the five-year
performance period
Keppel Corporation Limited
FINANCIAL REPORT
161
Movements in the number of shares under the KCL RSP, KCL RSP-Deferred Shares, KCL RSP 2020-Deferred Shares, KCL PSP, KCL PSP-
TIP, KCL PSP-M1 TIP, KCL PSP 2020 and the KCL PSP 2020-TIP are as follows:
KCL RSP 2020-
Deferred
Shares
KCL PSP
KCL PSP-TIP
KCL
PSP-M1 TIP
KCL
PSP 2020
KCL PSP
2020-TIP
2021
Contingent awards/
Awards (KCL RSP-
Deferred Shares &
KCL RSP 2020-
Deferred Shares)
Balance at 1 January
Granted
Adjustments upon released
Released
Cancelled
Balance at 31 December
-
4,300,000
6,522,171
423,500
-
-
5,096,700
(7,625)
(5,089,075)
-
-
-
-
-
-
-
-
(128,120)
(355,465)
-
-
-
-
1,490,000
11,380,000
-
-
-
-
-
(240,000)
4,171,880
6,166,706
423,500
1,490,000
11,140,000
Contingent awards / Awards (KCL RSP-Deferred Shares)
Balance at 1 January
Granted
Adjustments upon released
Released
Cancelled
Balance at 31 December
Awards released but not vested:
Balance at 1 January
Released
Vested
Cancelled
Other adjustments
Balance at 31 December
2020
KCL PSP
KCL PSP-TIP
KCL
PSP-M1 TIP
3,885,000
1,585,000
(417,300)
(652,700)
(100,000)
4,300,000
5,585,967
1,280,000
-
423,500
-
-
(343,796)
6,522,171
-
-
-
423,500
KCL RSP-
Deferred
Shares
-
5,318,164
(1,709)
(5,316,455)
-
-
2021
KCL RSP-
Deferred
Shares
4,669,070
-
(2,955,417)
(133,989)
(3,015)
1,576,649
KCL RSP-
2020
Deferred
Shares
-
5,089,075
(1,712,798)
(144,783)
-
3,231,494
2020
KCL RSP
KCL RSP-
Deferred
Shares
26,241
-
3,912,564
5,316,455
(25,641)
(4,315,136)
(600)
(244,813)
-
-
-
4,669,070
Executive Directors who are eligible for the KCL Share Plans are required to hold a minimum number of Shares under the share
ownership guideline which requires them to maintain a beneficial ownership stake in the Company, thus further aligning their interests
with shareholders.
As at 31 December 2021, there were no awards released but not vested (2020: nil) under the KCL RSP, 1,576,649 (2020: 4,669,070)
Shares under the KCL RSP-Deferred Shares that were released but not vested and 3,231,494 Shares released but not vested under the
KCL RSP 2020-Deferred Shares. At the end of the financial year, the number of contingent award of Shares granted but not released
was 4,171,880 (2020: 4,300,000) under the KCL PSP, 6,166,706 (2020: 6,522,171) under the KCL PSP-TIP, 423,500 (2020: 423,500) under
the KCL PSP-M1 TIP, out of which 127,900 (2020: 127,900) is to be vested in three years and 295,600 (2020: 295,600) is to be vested in
six years, 1,490,000 (2020: nil) under the KCL PSP 2020 and 11,140,000 (2020: nil) under the KCL PSP 2020-TIP.
Depending on the achievement of pre-determined performance targets, the actual number of Shares to be released could range from
zero to a maximum of 6,257,820 under the KCL PSP, zero to a maximum of 9,250,059 under the KCL PSP-TIP, zero to a maximum of
635,250 under the KCL PSP-M1 TIP, zero to a maximum of 2,235,000 under the KCL PSP 2020, and zero to a maximum of 16,710,000
under the KCL PSP 2020-TIP.
The fair values of the contingent award of Shares under the KCL RSP-Deferred Shares, KCL RSP 2020-Deferred Shares, KCL PSP, KCL
PSP-TIP, KCL PSP-M1 TIP, KCL PSP 2020 and the KCL PSP 2020-TIP are determined at the grant date using Monte Carlo simulation
method which involves projection of future outcomes using statistical distributions of key random variables including share price and
volatility.
Annual Report 2021
162
NOTES TO THE FINANCIAL STATEMENTS
3.
Share capital (continued)
On 15 February 2021, the Company granted awards of 5,096,700 Shares under the KCL RSP 2020-Deferred Shares and the estimated
fair value of the Shares granted were $4.98. On 30 April 2021, the Company granted contingent awards of 1,490,000 Shares under the
KCL PSP 2020 and the estimated fair value of the Shares granted was $4.18. On 30 July 2021, the Company granted contingent awards
of 11,380,000 Shares under the KCL PSP 2020-TIP and the estimated fair value of the Shares granted was $1.95.
In the prior year, on 17 February 2020, the Company granted awards of 5,318,164 Shares under the KCL RSP-Deferred Shares and the
estimated fair value of the Shares granted were $6.48. On 31 March 2020, the Company granted contingent awards of 1,585,000 Shares
under the KCL PSP, on 28 February 2020, 1,280,000 Shares under the KCL PSP-TIP and on 17 February 2020, 423,500 Shares under the
KCL PSP-M1 TIP. The estimated fair value of the Shares granted was $3.69 under the KCL PSP, $1.92 under the KCL PSP-TIP, $6.31 and
$5.72 respectively under the KCL PSP-M1 TIP.
The significant inputs into the model are as follows:
Date of grant
Prevailing share price at date of grant
Expected volatility of the Company
Expected term
Risk free rate
Expected dividend yield
2021
KCL RSP 2020-
Deferred Shares
KCL PSP 2020
KCL PSP 2020-TIP
15.02.2021
30.04.2021
30.07.2021
$5.15
27.39%
$5.42
27.18%
$5.49
26.77%
0.00 - 2.00 years
2.83 years
4.58 years
0.30% - 0.34%
*
2020
0.56%
*
0.77%
*
Date of grant
Prevailing share price at date of grant
Expected volatility of the Company
Expected term
Risk free rate
Expected dividend yield
*
Expected dividend yield is based on management’s forecast.
KCL RSP-
Deferred Shares
KCL PSP
KCL PSP-TIP
KCL PSP-M1 TIP
17.02.2020
31.03.2020
28.02.2020
17.02.2020
$6.72
23.89%
$5.29
26.02%
$6.34
24.07%
$6.72
23.89%
0.00 - 2.00 years
2.92 years
1.99 years 2.00 and 5.00 years
1.48% - 1.50%
*
0.87%
*
1.28%
1.50% and 1.53%
*
*
The expected volatilities are based on the historical volatilities of the Company’s share price over the previous 36 months immediately
preceding the grant date. The expected term used in the model is based on the grant date and the end of the performance period.
Group
2021
$’000
2020
$’000
Company
2021
$’000
2020
$’000
198,151
(49,653)
(180,398)
40,000
121,519
129,619
10,365,733
(141,256)
10,354,096
190,711
47,470
(218,544)
40,000
116,094
175,731
9,703,452
(442,703)
9,436,480
198,151
24,100
(452)
-
2,960
224,759
8,271,057
-
8,495,816
190,711
22,196
(1,911)
-
(1,832)
209,164
7,975,921
-
8,185,085
4.
Reserves
Capital reserves
Share option and share plans reserve
Fair value reserve
Hedging reserve
Bonus issue by subsidiaries
Others
Revenue reserves
Foreign exchange translation account
Keppel Corporation Limited
FINANCIAL REPORT
Movements in the Group’s and the Company’s reserves are set out in the Consolidated Statements of Changes in Equity. Movements in
hedging reserve by risk categories are as follows:
163
Group
2021
As at 1 January
Fair value changes arising during the year, net of tax
Realised and transferred to profit and loss account
- Materials and subcontract costs
- Other operating income – net
- Interest expenses
- Other gains and losses
Share of associated companies and joint ventures’
fair value changes
As at 31 December
2020
As at 1 January
Transfer of hedging reserve from revenue reserve
Fair value changes arising during the year, net of tax
Realised and transferred to profit and loss account
- Materials and subcontract costs
- Other operating income – net
- Interest expenses
- Exchange difference
Share of associated companies and joint ventures’
fair value changes
As at 31 December
Foreign
exchange risk
$’000
Interest
rate risk
$’000
Price risk
$’000
Total
$’000
(48,621)
(24,319)
(205,610)
35,687
85,466
(131,825)
(218,544)
(70,678)
16,021
57,601
-
(86)
1,800
2,396
-
-
31,155
22,595
32,451
(33,943)
(52,713)
(36,692)
-
-
-
-
57,601
31,155
22,509
34,251
(148,851)
(180,398)
(10,425)
(109)
(89,236)
-
(50,212)
(119,894)
5,411
15,319
(319)
848
-
26,424
(4,668)
-
(3,937)
(48,621)
(23,433)
(205,610)
(93,203)
(23,165)
69,958
82,097
-
-
-
-
35,687
(192,864)
(23,274)
(100,148)
87,189
16,167
26,424
(4,668)
(27,370)
(218,544)
The changes in fair value of the hedging instruments approximate the changes in fair value of the hedged items, which resulted in
minimal hedge ineffectiveness recognised in profit or loss except for additional information disclosed elsewhere in the financial
statements.
5.
Non-controlling interests
The Group’s subsidiaries that have material non-controlling interests (“NCI”) are as follows:
Konnectivity Pte. Ltd.
Other subsidiaries with immaterial NCI
NCI percentage of
ownership interest and
voting interest
2021
$’000
20%
2020
$’000
20%
Carrying amount of NCI
2021
$’000
304,313
80,387
2020
$’000
306,897
120,549
Profit after tax
allocated to NCI
2021
$’000
6,999
(23,039)
2020
$’000
9,182
(11,416)
Total
384,700
427,446
(16,040)
(2,234)
Annual Report 2021
164
NOTES TO THE FINANCIAL STATEMENTS
5.
Non-controlling interests (continued)
Summarised financial information before inter-group elimination
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Less: NCI
Revenue
Profit for the year
Total comprehensive income
Net cash generated from operations
Net cash from/(used in) investing activities
Net cash used in financing activities
Total comprehensive income allocated to NCI
Dividends paid to NCI
Konnectivity Pte. Ltd.
2021
$’000
1,865,149
641,450
135,917
485,153
1,885,529
(363,965)
1,521,564
1,096,177
40,979
45,841
273,921
360,092
(423,465)
2020
$’000
2,396,955
413,821
331,564
577,638
1,901,574
(367,088)
1,534,486
1,074,090
51,544
51,339
292,801
(139,592)
(191,737)
7,396
9,149
9,980
13,110
During the financial year, the Group acquired additional interest in certain subsidiaries of the Company from its non-controlling interests.
The following summarises the effect of the change in the Group’s ownership interest on the equity attributable to owners of the
Company:
Amounts paid/payable on changes in ownership interest in subsidiaries
Non-controlling interest acquired
Total amount recognised in equity reserves
6.
Perpetual Securities
2021
$’000
(31,307)
19,385
2020
$’000
(660)
(2,334)
(11,922)
(2,994)
On 16 September 2021, the Company issued subordinated perpetual securities with an aggregate principal amount of $400,000,000 and
an initial distribution rate of 2.9% per annum. The distribution will be payable semi-annually in arrear unless deferred at the discretion of
the Company and will be cumulative in accordance with the terms and conditions of the perpetual securities. The perpetual securities
have no fixed redemption date and are redeemable in whole at the Company’s option on 16 September 2024 or any subsequent semi-
annual distribution payment dates thereafter, at their principal amount, together with any accrued, unpaid or deferred distributions.
Subject to the relevant terms and conditions of the perpetual securities, the Company can elect to defer distributions on these perpetual
securities and is not subject to any limits as to the number of times a distribution can be deferred, unless it has:
(i)
(ii)
paid or declared discretionary dividends, distributions or other discretionary payment in respect of its ordinary shares; or
redeemed, cancelled, bought back or otherwise acquired ordinary shares (except in connection with any share scheme shares/
options), during the six months ending on the day before the relevant distribution payment date.
If on any distribution payment date, payment of all distribution payments is not made in full, the Company shall not (i) pay or declare any
dividends, distributions or other discretionary payment on its ordinary shares or (ii) redeem, reduce, cancel, buy-back or acquire ordinary
shares (except in connection with any share scheme shares/options) until the Company has satisfied in full all outstanding arrears
of distribution on these perpetual securities or is permitted to do so by an extraordinary resolution by the holders of the perpetual
securities.
As the perpetual securities have no fixed redemption date and the payment of distributions is at the discretion of the Company,
the perpetual securities do not meet the definition for classification as a financial liability under SFRS(I) 1-32 Financial Instruments:
Presentation. The whole instrument is presented within equity, and distributions are treated as dividends.
The Company recognised $398,120,000 of perpetual securities, net of transaction costs, after the issuance. As at 31 December 2021,
the perpetual securities of $401,521,000 recognised within equity included accrued distributions for the perpetual securities.
Keppel Corporation Limited
FINANCIAL REPORT
165
7.
Fixed assets
Group
2021
Cost
At 1 January
Additions
Disposals
Write-off
Subsidiaries disposed
Reclassification
- ROU asset
- Stocks
- Other fixed assets categories
- Asset held for sale (Note 37)
Exchange differences
Freehold
Land &
Buildings
$’000
Buildings on
Leasehold
Land
$’000
Vessels &
Floating
Docks
$’000
Networks
and Related
Application
Systems
$’000
Plant,
Machinery,
Equipment
& Others(1)
$’000
Capital
Work-in-
Progress
$’000
Total
$’000
118,113
1,913,994
526,939
724,319
2,208,740
179,257
5,671,362
1,621
(1,581)
-
-
-
-
(32,292)
6,262
(2,787)
(11,775)
-
36,406
(19,642)
81,434
(69)
(142,955)
(1,876)
22,602
144
106,519
90,816
103,423
308,785
(2,774)
(749,377)
(21,258)
(32,157)
(809,934)
-
-
-
-
-
-
-
-
(2,696)
(208)
-
-
(20,578)
(55,340)
6,795
(636)
-
-
26,658
(79,558)
8,866
(9,978)
(24,449)
-
-
(19,999)
(54,586)
(4,303)
(1,313)
(208)
36,406
(39,641)
-
(282,225)
35,074
At 31 December
83,916
1,883,539
455,186
80,825
2,231,360
160,344
4,895,170
Accumulated depreciation and
impairment losses
At 1 January
Depreciation charge
Disposals
Impairment
Write-off
Subsidiaries disposed
Reclassification
- ROU asset
- Stocks
- Other fixed assets categories
- Asset held for sale (Note 37)
Exchange differences
At 31 December
Net Book Value
968,237
176,300
155,070
1,544,970
40,646
2,955,609
70,386
2,380
(1,356)
-
-
-
-
-
(13,506)
49,898
(2,326)
35,969
(6,002)
-
12,124
(10,094)
21,845
(30)
(118,729)
(835)
5,306
22,201
82,447
126,413
(2,066)
(200,350)
(20,730)
-
-
-
-
-
-
-
-
-
-
-
(1,732)
(186)
-
-
(12,138)
(16,834)
3,652
(84)
-
-
3,883
(71,867)
5,917
-
-
866
-
-
-
-
-
-
283,339
(226,828)
36,835
(7,734)
(186)
12,124
(10,094)
-
(207,460)
1,151
15,191
57,039
956,228
171,115
37,083
1,586,668
42,663
2,850,796
26,877
927,311
284,071
43,742
644,692
117,681
2,044,374
Included in freehold land & buildings are freehold land amounting to $6,264,000 (2020: $6,427,000).
Certain fixed assets with carrying amount of $116,755,000 (2020: $119,016,000) are mortgaged to banks for loan facilities (Note 23).
Interest capitalised during the financial year amounted to $nil (2020: $nil).
Each rigbuilding, shipbuilding and repair facilities in the Energy & Environment segment has been identified as individual CGUs. The
recoverable amounts of these CGUs were determined using value-in-use models and valuation performed by independent professional
firm. The value incorporated cash flow projections based on financial forecasts approved by management. Management had
determined the forecasted cash flows based on past performance and its current expectations of market development. These cash
flows were discounted at discount rates ranging from 6% to 20% (2020: 6% to 14%) per annum, depending on the location of the
facilities.
In 2020, the recoverable amounts of the impaired assets amounted to a total of $146,304,000. The Group recognised an impairment
loss of $19,694,000 on buildings on leasehold land in the Energy & Environment segment, which was based on the difference between
the recoverable amount and the carrying value of the fixed assets.
During the year, the Group recognised an impairment loss of $35,969,000 (2020: $6,919,000) on buildings on leasehold land in the Urban
Development segment, which was based on the difference between the recoverable amount and the carrying value of a fixed asset. The
recoverable amount of $67,273,000 (2020: $106,960,000) was based on an independent external valuation, which was determined using
value-in-use model. Cashflows used to determine the recoverable amount were discounted at a discount rate of 14.5% (2020: 14.0%)
per annum.
Annual Report 2021
166
NOTES TO THE FINANCIAL STATEMENTS
7.
Fixed assets (continued)
In 2020, the Group recognised an impairment loss of $9,555,000 on certain buildings and equipment in the Connectivity segment, due
to lower recoverable amounts subsequent to sustained losses generated from these assets, as a result of weaker economic outlook
which adversely affected fair values and expected returns of these assets. The recoverable amounts were assessed to be fair value
less costs of disposal. The recoverable amounts of $65,543,000 was determined using a combination of cost replacement method,
income capitalisation method and market comparison. The significant assumptions are capitalisation rate of 5.5% to 6.0% and price of
comparable land at $35 per square metre. This is a Level 3 fair value measurement.
On 22 December 2021, the Group completed the sale of certain mobile, fixed and fibre assets (comprising passive infrastructure
and network equipment) (“Network Assets”) to M1 Network Private Limited (“M1NPL”), a jointly controlled entity of the Group, for a
consideration of $580,000,000, an amount equivalent to the carrying amount of the Network Assets. On the same date, the Network
Services Agreement (“NSA”) between the Group and M1NPL became effective where M1NPL will provide the Group and its mobile
virtual network operators (“MVNO”) access to and use of the network capacity generated by the Network Assets for an initial period of
15 years. In addition, the Group will undertake the operations and maintenance of the Network Assets on behalf of M1NPL.
This Group had evaluated the economic and accounting implications of the agreements and concluded that:
(i)
(ii)
the Network Assets could be derecognised from the Group’s financial statements as a sale to M1NPL in accordance with
SFRS(I)1-16 Property, Plant and Equipment whereby M1NPL obtained control of the Network Assets as the Group’s performance
obligation under the agreement had been satisfied against the requirements under SFRS(I) 15 Revenue from Contracts with
Customers; and
the NSA contract does not contain a lease in accordance with SFRS(I) 16 Leases. Accordingly, the NSA has been accounted for
as a service contract.
Freehold
Land &
Buildings
$’000
Buildings on
Leasehold
Land
$’000
Vessels &
Floating
Docks
$’000
Networks
and Related
Application
Systems
$’000
Plant,
Machinery,
Equipment
& Others(1)
$’000
Capital
Work-in-
Progress
$’000
Total
$’000
Group
2020
Cost
At 1 January
Additions
Disposals
Write-off
Subsidiaries acquired
Subsidiaries disposed
Reclassification
- ROU asset
- Stocks
- Other fixed assets categories
- Asset held for sale (Note 37)
Exchange differences
114,791
374
-
-
-
-
1,968,811
3,263
(1,341)
-
-
-
-
-
859
-
2,089
(6,281)
-
10,379
(58,764)
(2,073)
533,604
14,585
(1,876)
-
-
-
-
-
(11,384)
-
(7,990)
645,963
72,296
(2,360)
-
-
-
2,162,118
86,801
(22,867)
(3,029)
-
(621)
-
-
8,420
-
-
(142)
-
2,352
(623)
(15,249)
137,572
44,102
(627)
(11)
-
-
-
7,778
(10,626)
-
1,069
5,562,859
221,421
(29,071)
(3,040)
-
(621)
(6,423)
7,778
-
(59,387)
(22,154)
At 31 December
118,113
1,913,994
526,939
724,319
2,208,740
179,257
5,671,362
Accumulated depreciation and
impairment losses
At 1 January
Depreciation charge:
Disposals
Impairment:
Write-off
Subsidiaries disposed
Reclassification
- ROU asset
- Stocks
- Other fixed assets categories
- Asset held for sale (Note 37)
Exchange differences
At 31 December
Net Book Value
66,035
2,869
-
-
-
-
-
-
(4)
-
1,486
884,340
50,002
(1,214)
34,573
-
-
6,849
-
456
(4,701)
(2,068)
159,877
15,582
(1,876)
-
-
-
-
-
6,592
-
(3,875)
63,476
91,823
(226)
-
-
-
1,440,840
134,710
(20,901)
1,595
(2,070)
(429)
-
-
-
-
(3)
(42)
-
(326)
(526)
(7,881)
46,446
-
-
-
-
-
-
-
(6,718)
-
918
2,661,014
294,986
(24,217)
36,168
(2,070)
(429)
6,807
-
-
(5,227)
(11,423)
70,386
968,237
176,300
155,070
1,544,970
40,646
2,955,609
47,727
945,757
350,639
569,249
663,770
138,611
2,715,753
(1) Others comprise furniture, fittings and office equipment and cranes.
Keppel Corporation Limited
FINANCIAL REPORT
Company
2021
Cost
At 1 January
Additions
Disposals
At 31 December
Accumulated depreciation and
impairment losses
At 1 January
Depreciation charge
Disposals
At 31 December
Net Book Value
2020
Cost
At 1 January
Additions
Disposals
Write-off
At 31 December
Accumulated depreciation and
impairment losses
At 1 January
Depreciation charge
Disposals
Write-off
At 31 December
Net Book Value
(2) Others comprise furniture, fittings and office equipment.
8.
Investment properties
At 1 January
Development expenditure
Fair value gain (Note 27)
Reclassification
- Assets held for sale (Note 37)
- Stocks (Note 15)
Exchange differences
At 31 December
167
Freehold
Land &
Buildings
$’000
Plant,
Machinery,
Equipment
& Others(2)
$’000
Total
$’000
1,233
-
-
18,039
6,520
(898)
19,272
6,520
(898)
1,233
23,661
24,894
1,233
-
-
12,275
2,956
(32)
13,508
2,956
(32)
1,233
15,199
16,432
-
8,462
8,462
1,233
17,538
18,771
-
-
-
552
(29)
(22)
552
(29)
(22)
1,233
18,039
19,272
1,233
-
-
-
10,265
2,047
(29)
(8)
11,498
2,047
(29)
(8)
1,233
12,275
13,508
-
5,764
5,764
Group
2021
$’000
3,674,075
229,581
238,458
-
3,544
110,770
2020
$’000
3,022,091
266,219
268,430
(650,062)
714,733
52,664
4,256,428
3,674,075
The Group revalues its investment property portfolio on an annual basis except for significant investment properties which are revalued
on a half-yearly basis. The fair value of investment properties is determined by external, independent professional valuers which have
appropriate recognised professional qualifications and experience in the location and category of property being valued. Management
reviews the appropriateness of the valuation methodologies and assumptions adopted, and the reliability of the inputs used in the
valuations.
Annual Report 2021
168
NOTES TO THE FINANCIAL STATEMENTS
8.
Investment properties (continued)
The Group’s investment properties (including integral plant and machinery) are stated at management’s assessments based on the
following valuations (open market value basis) by independent firms of professional valuers as at 31 December 2021:
-
-
-
-
-
-
Cushman & Wakefield VHS Pte Ltd and Knight Frank Pte Ltd for properties in Singapore;
Cushman & Wakefield Shenzhen Valuation Company Limited and Beijing Colliers International Real Estate Valuation Co., Ltd for
properties in China;
KJPP Willson dan Rekan (an affiliate of Knight Frank) for properties in Indonesia;
D&P Real Estate Services Company Limited (an affiliate of Colliers) for properties in Vietnam;
Cushman & Wakefield India Pvt Ltd for a property in India; and
Cushman & Wakefield V.O.F. for a property in the Netherlands.
Based on valuations performed by the independent valuers, management has analysed the appropriateness of the fair value changes.
Interest capitalised within development expenditure during the financial year amounted to $42,027,000 (2020: $24,526,000).
The Group has mortgaged certain investment properties of carrying value amounting to $1,875,368,000 as at 31 December 2021
(2020: $1,815,790,000) to banks for loan facilities (Note 23).
During the year, the Group reclassified $3,544,000 (2020: $714,733,000) from properties held for sale to investment properties upon
change of use of the asset from property trading to holding for capital gain and/or rental yield.
9.
Right-of-use assets (leases)
Leases
The Group as lessee
Leasehold land & buildings
The Group leases several lands, offices, retail stores and shipyards for use in its operations.
Plant, machinery, equipment & others
The Group leases equipment and vehicles for office and operation use, mainly in the Energy & Environment segment.
Base station sites
The Group leases base station sites to facilitate transmission of telecommunication services.
There are no externally imposed covenants on these lease arrangements.
Right-of-use assets
Leasehold
Land &
Buildings
$’000
Plant,
Machinery,
Equipment
& Others(1)
$’000
Base
Station
Sites
$’000
553,983
70,558
(63,928)
(271)
(5,452)
(24,282)
(32,192)
(27)
3,567
5,048
2,910
(2,666)
23,675
2,353
(3,584)
-
(43)
-
-
27
(46)
-
-
-
-
-
(414)
Total
$’000
582,706
75,821
(70,178)
(271)
(5,495)
(24,282)
(32,192)
-
3,107
501,956
5,230
22,030
529,216
Group
2021
Net Book Value
At 1 January
Additions
Depreciation
Write-off
Remeasurement
Reclassification
- Fixed assets (Note 7)
- Assets held for sale (Note 37)
- Other right-of-use assets categories
Exchange differences
At 31 December
Keppel Corporation Limited
FINANCIAL REPORT
169
Leasehold
Land &
Buildings
$’000
Plant,
Machinery,
Equipment
& Others(1)
$’000
735,348
12,752
(56,373)
(2,879)
-
(570)
22,637
13,230
(154,281)
(15,881)
9,376
1,103
(3,620)
-
(27)
(1,342)
-
-
-
(442)
Base
Station
Sites
$’000
15,205
14,100
(5,378)
-
-
-
(252)
-
-
-
Total
$’000
759,929
27,955
(65,371)
(2,879)
(27)
(1,912)
22,385
13,230
(154,281)
(16,323)
Group
2020
Net Book Value
At 1 January
Additions
Depreciation
Impairment loss
Disposal
Write-off
Remeasurement
Reclassification
- Fixed assets (Note 7)
- Assets held for sale (Note 37)
Exchange differences
At 31 December
553,983
5,048
23,675
582,706
(1) Others comprise furniture, fittings, office equipment and motor vehicles.
The right-of-use asset relating to the leasehold land presented under investment properties (Note 8) is stated at fair value and has a
carrying amount at balance sheet date of $4,742,000 (2020: $7,916,000).
Total cash outflow for all the leases was $99,894,000 (2020: $85,747,000), comprising repayment of principal of $68,573,000
(2020: $53,413,000) and interest payment of $31,321,000 (2020: $32,334,000).
Certain right-of-use assets with carrying amount of $10,520,000 (2020: $11,105,000) are mortgaged to banks for loan facilities (Note 23).
Company
2021
Net Book Value
At 1 January
Depreciation
Additions
Remeasurement
At 31 December
2020
Net Book Value
At 1 January
Depreciation
Additions
At 31 December
Leasehold
Land &
Buildings
$’000
Plant,
Machinery,
Equipment
& Others(2)
$’000
11,031
(3,727)
338
7,460
15,102
12,620
(3,807)
2,218
11,031
173
(72)
28
-
129
213
(68)
28
173
Total
$’000
11,204
(3,799)
366
7,460
15,231
12,833
(3,875)
2,246
11,204
(2) Others comprise office equipment.
Total cash outflow for all the leases was $4,211,000 (2020: $4,201,000), comprising repayment of principal of $3,885,000 (2020:
$3,916,000) and $326,000 interest payment (2020: $285,000).
Lease expense not capitalised in lease liabilities
Short-term leases
Low-value leases
Variable lease payments which do not depend on an index or rate
Group
2021
$’000
14,429
588
666
2020
$’000
22,582
892
317
As at 31 December 2021, future cash outflows to which the Group is potentially exposed that are not reflected in the measurement
of lease liabilities include variable lease payments, $609,797,000 (2020: $496,808,000) for extension options and $57,086,000 (2020:
$55,678,000) for committed leases which have yet to commence.
Annual Report 2021
170
NOTES TO THE FINANCIAL STATEMENTS
9.
Right-of-use assets (leases) (continued)
The following table details the liquidity analysis for lease liabilities of the Group and the Company based on contractual undiscounted
cash flows.
Within one year
Within one to two years
Within two to five years
After five years
Total
Group
Company
2021
$’000
99,073
89,339
205,076
365,741
2020
$’000
96,104
86,291
193,279
478,179
2021
$’000
4,181
4,137
8,941
-
2020
$’000
4,127
4,052
4,016
-
759,229
853,853
17,259
12,195
The Group as lessor
The Group leases out properties, pipe service corridor racks and wayleaves facilities to non-related parties under non-cancellable
operating leases. At the end of the reporting period, the Group’s undiscounted future minimum lease receivables under non-cancellable
operating leases contracted for at the end of the reporting period but not recognised as receivables are as follows:
Within one year
In the second year
In the third year
In the fourth year
In the fifth year
After the fifth year
Total
10. Subsidiaries
Quoted shares, at cost
Market value: $5,750,000 (2020: $5,800,000)
Unquoted shares, at cost
Provision for impairment
Movements in the provision for impairment of subsidiaries are as follows:
At 1 January
Charge to profit and loss
Reversal
At 31 December
Group
2021
$’000
75,639
68,126
54,012
30,662
20,886
62,346
2020
$’000
64,501
43,041
38,305
36,316
21,869
59,601
311,671
263,633
Company
2021
$’000
2020
$’000
493
8,442,349
8,442,842
(449,056)
493
8,442,614
8,443,107
(480,569)
7,993,786
7,962,538
Company
2021
$’000
480,569
18,487
(50,000)
2020
$’000
480,569
-
-
449,056
480,569
Impairment of $18,487,000 (2020: $nil) made during the year mainly relates to an investment holding subsidiary that holds the loan
receivable from KrisEnergy Limited. Based on the expected credit loss assessment as detailed in Note 11(b), an impairment provision
on the loan receivable was recognised, resulting in the estimated recoverable amount of the subsidiary to be below the Company’s cost
of investment. The recoverable amount of $28,000 is based on fair value less costs of disposal which was determined using the net
asset value of the subsidiaries. This is a Level 3 fair value measurement.
During the year, provision of impairment amounting to $50,000,000 (2020: $nil) was written-back as a result of increase in the estimated
recoverable amount of subsidiaries mainly attributable to fair value gains from investments. The recoverable amount of $194,354,000 is
based on fair value less costs of disposal which was determined using the net asset value of the subsidiaries. This is a Level 3 fair value
measurement.
Information relating to significant subsidiaries consolidated in the financial statements is given in Note 40.
Keppel Corporation Limited
FINANCIAL REPORT
11. Associated companies and joint ventures
Quoted shares, at cost
Market value: $2,981,536,000 (2020: $2,945,022,000)
Unquoted shares, at cost
Loan receivable from associated company
Provision for impairment
Share of reserves post acquisition
Carrying amount
Unquoted shares, at fair value through profit or loss
Notes issued by associated companies (net of provision for impairment)
Advances to associated companies and joint ventures
171
Group
2021
$’000
2020
$’000
2,277,137
3,006,644
-
5,283,781
(144,005)
5,139,776
393,681
5,533,457
142,238
245,000
129,563
2,703,470
2,601,982
156,553
5,462,005
(152,509)
5,309,496
6,719
5,316,215
148,529
280,084
245,785
6,050,258
5,990,613
Notes issued by an associated company of $245,000,000 are unsecured and will mature in 2040. Interest is charged at 17.5% (2020:
17.5%) per annum. During the year, an impairment of $35,084,000 was recognised for notes issued by another associated company
KrisEnergy Limited (Note 11(b)).
Advances to associated companies and joint ventures are unsecured and are not repayable within the next 12 months. Interest is
charged at 3.0% (2020: 1.1% to 3.0%) per annum on interest-bearing advances.
Movements in the provision for impairment of associated companies and joint ventures are as follows:
At 1 January
Impairment loss
Disposal
Reclassification to Investments
Exchange differences
At 31 December
Group
2021
$’000
152,509
-
(674)
(7,830)
-
2020
$’000
197,392
9,486
(18,733)
(35,640)
4
144,005
152,509
Impairment loss made during the prior year mainly relates to the shortfall between the carrying amount of the costs of investment and
the recoverable amount of certain associated companies.
The carrying amount of the Group’s material associated companies and joint ventures, all of which are equity accounted for, are as
follows:
Keppel REIT
KrisEnergy Limited
Keppel DC REIT
Sino-Singapore Tianjin Eco-City Investment and Development Co., Limited
Floatel International Limited
Other associated companies and joint ventures
(a)
(b)
(c)
(d)
(e)
2021
$’000
1,953,614
-
470,649
673,007
262,146
2,690,842
2020
$’000
1,898,249
35,084
420,124
636,366
95,668
2,905,122
6,050,258
5,990,613
Annual Report 2021
172
NOTES TO THE FINANCIAL STATEMENTS
11. Associated companies and joint ventures (continued)
The summarised financial information of the material associated companies, not adjusted for the Group’s proportionate share, based
on its SFRS(I) financial statements and a reconciliation with the carrying amount of the investment in the consolidated financial
statements are as follows:
(a) Keppel REIT
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Less: Non-controlling interests
Proportion of the Group’s ownership
Group’s share of net assets
Other adjustments
Carrying amount of equity interest
Revenue
Profit after tax
Other comprehensive income
Total comprehensive income
Fair value of ownership interest (if listed)**
Dividends received
** Based on the quoted market price at 31 December (Level 1 in the fair value hierarchy)
(b) KrisEnergy Limited
Investments in KrisEnergy Limited and related exposure
Equity interest
Zero-coupon notes
Total carrying amount of investment4
Trade receivable for production barge¹
Loan receivable under CBA loan facility
Loan receivable under the revolving credit facility (“RCF”)²
Advances for receivership funding³
Contract assets¹
Total carrying amount of other related exposures
Other related exposure:
Guarantee²
Non-current (excluding carrying amount of investment)
2021
$’000
225,934
8,261,750
8,487,684
273,276
2,624,424
2,897,700
5,589,984
(723,796)
4,866,188
47%
2,264,724
(311,110)
1,953,614
216,606
255,856
23,459
279,315
2020
$’000
175,433
7,588,935
7,764,368
223,179
2,321,056
2,544,235
5,220,133
(721,783)
4,498,350
49%
2,206,891
(308,642)
1,898,249
170,223
279
24,911
25,190
1,943,429
98,865
1,872,365
69,808
2021
$’000
-
-
-
-
-
109,513
5,876
-
115,389
2020
$’000
-
35,084
35,084
-
77,193
-
-
29,225
106,418
-
247,340
93,311
77,193
¹
²
³
4
In relation to a construction contract for a production barge for KrisEnergy. The exposure was reclassified from contract assets to receivable in June 2021
as a result of the Group exercising its rights to the production barge.
Guarantee was in relation to a bilateral agreement between the Group and a bank, on a revolving credit facility (RCF) granted to KrisEnergy. KrisEnergy
defaulted on the repayment of the RCF on 30 June 2021, on which the Group had made payment to the bank and recorded a loan receivable (net of
impairment provision) from KrisEnergy.
In relation to a short term interest free bridging facility extended to KrisEnergy (in receivership) for the purpose of its working capital requirements and
receivership expenses.
The summarised financial information in relation to KrisEnergy is not included as the carrying amount of the investment has been written down to $nil
Keppel Corporation Limited
FINANCIAL REPORT
173
KrisEnergy’s ordinary shares were suspended from trading from the Singapore Exchange in August 2019. Whilst the scheme of
arrangement was approved by different groups of creditors progressively in early 2021, KrisEnergy announced in April 2021 that
consensual restructuring was no longer viable and even if the restructuring exercise was completed, there remained material
uncertainty over KrisEnergy’s ability to continue as a going concern. On 13 July 2021, KrisEnergy announced that the Grand Court
of Cayman Islands had granted the approval for its winding-up petition.
The Group has a comprehensive first ranking security package over the assets of the KrisEnergy group through the RCF and
CBA Loan Facility. With KrisEnergy in the process of winding up, the Group has implemented detailed recovery plans which were
developed in consultation with its financial advisor, Borrelli Walsh (trading as “Kroll”), and legal advisor to preserve KrisEnergy’s
assets and to maximise recoveries for the Group. Amongst other things, the Group has appointed Borrelli Walsh as receiver over
the assets of a number of members of the KrisEnergy group under the security package.
In assessing expected credit losses, management had reviewed the cash flow projections prepared by Borrelli Walsh, based on
the estimated amount of cash available from producing assets to be held over the remaining lives of the concession period of 8.5
to 12 years and expected proceeds from assets to be sold, taking into account the rights to these cash flows from the secured
assets on a receivership basis. The cash flow estimates from producing assets were based on forecasted production volumes
and oil prices, determined by taking reference from external information sources, ranging from US$67 to US$73 per barrel for
2022 to 2033 (December 2020: US$50 to US$62 from 2021 to 2029). The estimated recoverable amounts for assets to be sold
are based on the binding bids received from external parties.
The timing of the cash flows, estimated production volumes, expected proceeds from assets to be sold and discount rates used
in assessing recoverable amounts are subject to risk and uncertainty.
Based on the assessment, an additional impairment provision of $317,999,000 was recognised for the year ended 31 December
2021. Taking into account the rights to the cash flows from the secured assets on a receivership basis as at 31 December 2021,
the loss comprised expected credit loss of $282,915,000 on financial guarantee in relation to the bilateral agreement with the
bank, receivables for production barge and CBA loan facility and the full impairment of the Group’s investment in the zero-coupon
notes of $35,084,000.
In the financial year ended 31 December 2020, management had performed an assessment which had taken into consideration
the terms of restructuring and with KrisEnergy continuing as a going concern, and recognised an impairment charge of
$39,200,000 on the investment in zero-coupon notes.
Management had also reviewed the cash flow projections prepared by Borelli Walsh and determined that the cash flow
projections are most sensitive to the timing of withheld cash (December 2020: most sensitive to oil prices).
The existing cash from one of the producing assets under the security package have been withheld as the operator of this asset
is performing a study on the estimated costs to decommission the asset at the end of field life in 2031. The study is expected to
be completed in the first quarter of 2022 and a further assessment of the release of withheld cash is expected to be carried out in
the same year. If the release of the withheld cash were delayed by an additional year, this would lead to a decrease in estimated
recoverable amount of $3,000,000 but not result in additional impairment for the financial year ended 31 December 2021.
Based on the assessment performed for the financial year ended 31 December 2020, the estimated cash available from
producing assets and forecasted production from assets under development would decrease if the oil prices were to decrease by
2% across the forecasted period of 2021 to 2029, and this would result in an additional impairment of $34,400,000.
(c) Keppel DC REIT
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Less: Non-controlling interests
Proportion of the Group’s ownership
Group’s share of net assets
Other adjustments
Carrying amount of equity interest
Revenue
Profit after tax
Other comprehensive income
Total comprehensive income
Fair value of ownership interest (if listed)**
Dividends received
** Based on the quoted market price at 31 December (Level 1 in the fair value hierarchy)
2021
$’000
262,188
3,517,962
3,780,150
220,609
1,223,865
1,444,474
2,335,676
(42,429)
2,293,247
20%
458,649
12,000
470,649
271,065
321,573
11,251
332,824
847,490
35,928
2020
$’000
304,561
3,045,267
3,349,828
233,618
1,133,968
1,367,586
1,982,242
(37,590)
1,944,652
21%
407,405
12,719
420,124
265,571
171,728
7,491
179,219
961,363
22,367
Annual Report 2021
174
NOTES TO THE FINANCIAL STATEMENTS
11. Associated companies and joint ventures (continued)
(d) Sino-Singapore Tianjin Eco-City Investment and Development Co., Limited
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Proportion of the Group’s ownership
Group’s share of net assets
Other adjustments
Carrying amount of equity interest
Revenue
Profit after tax
Other comprehensive income
Total comprehensive income
Dividends received
(e)
Floatel International Limited
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Proportion of the Group’s ownership
Group’s share of net assets
Carrying amount of equity interest
Loan receivable
Revenue
Profit/(Loss) after tax
Other comprehensive loss
Total comprehensive income/(loss)
Dividends received
Investments in Floatel International Limited and related exposure
Equity interest
Loan receivable
Total carrying amount
Other related exposure:
Guarantee¹
2021
$’000
1,317,280
539,024
1,856,304
384,913
67,848
452,761
1,403,543
50%
701,772
(28,765)
673,007
369,357
43,447
-
43,447
2020
$’000
1,173,770
490,242
1,664,012
308,518
26,475
334,993
1,329,019
50%
664,510
(28,144)
636,366
575,559
147,871
-
147,871
21,162
38,471
2021
$’000
88,287
878,785
967,072
52,381
389,559
441,940
525,132
50%
262,146
262,146
-
262,146
127,016
322,163
(3)
322,160
2020
$’000
109,865
1,017,819
1,127,684
883,371
366,279
1,249,650
(121,966)
50%
(60,885)
(60,885)
156,553
95,668
112,384
(730,863)
(19,419)
(750,282)
-
-
2021
$’000
262,146
-
262,146
2020
$’000
-
95,668
95,668
119,386
-
¹
In relation to a bilateral agreement between the Group and financial institutions, on the US$100 million revolving credit facility granted to Floatel.
Keppel Corporation Limited
FINANCIAL REPORT
175
On 24 March 2021, Floatel successfully completed its debt restructuring where Floatel retained its existing fleet of five operating
vessels, substantially reduced its debt by approximately US$610 million and secured a new super senior US$100 million
Revolving Credit Facility (“RCF”) from financial institutions. Keppel Offshore & Marine Ltd (“KOM”), a wholly owned subsidiary of
the Company, entered into participation agreements with these financiers that would require KOM to make whole for any loss the
financiers suffer under this RCF.
Following the restructuring, KOM retains its equity interest of 49.92% in Floatel but forgave the loan receivable from Floatel
amounting to notional amount of approximately US$244 million. The Group continues to equity account for Floatel’s results and
during the financial year ended 31 December 2021, the Group equity accounted for Floatel’s profits amounting to $160,824,000.
This comprised $269,125,000 gain from debt restructuring, $53,842,000 loss from vessel impairment and $54,459,000 losses
from operations.
The significantly improved capital structure post debt restructuring has provided a runway for Floatel to recover and emerge
financially stronger. Since completion of the restructuring, Floatel had also successfully won multiple charter contracts and
extension option for its vessels. Accordingly, no further impairment loss was recognised on the Group’s investment in Floatel for
the financial year ended 31 December 2021.
(f) Other associated companies and joint ventures
Aggregate information about the Group’s investments in other associated companies and joint ventures are as follows:
Share of results
Share of other comprehensive income
Share of total comprehensive income
2021
$’000
108,411
72,324
180,735
2020
$’000
42,459
17,903
60,362
Information relating to significant associated companies and joint ventures, including information on principal activities, country of
operation/incorporation and proportion of ownership interest, and whose results are included in the financial statements is given in
Note 40.
12.
Investments
Investments at fair value through other comprehensive income (“OCI”):
- Quoted equity units in a public infrastructure trust managed
by a related company
- Quoted equity shares in oil and gas industry
- Quoted equity shares in other industries
- Unquoted equity shares in real estate industry
- Unquoted equity shares and funds in oil and gas industry
- Unquoted equity shares and funds in other industries
- Unquoted property funds managed by a related company
Total investments at fair value through OCI
Investments at fair value through profit or loss:
- Quoted equity shares
- Unquoted equity shares and funds
- Unquoted bonds and debentures
Total investments at fair value through profit or loss
Group
2021
$’000
2020
$’000
Company
2021
$’000
2020
$’000
495,432
5,418
1,460
70,871
28,134
27,018
100,029
728,362
71,314
552,849
95,139
719,302
495,432
7,819
1,361
76,693
24,320
111,596
105,070
822,291
66,014
246,848
94,339
407,201
-
-
-
24,100
-
-
-
24,100
-
-
-
-
-
-
-
22,196
-
-
-
22,196
-
-
-
-
Total investments
1,447,664
1,229,492
24,100
22,196
Quoted equity units in a public infrastructure trust refers to the Group’s investment in Keppel Infrastructure Trust which was reclassified
from associated company to an investment carried at fair value through other comprehensive income arising from loss of significant
influence in the previous financial year.
Unquoted investments at fair value through profit or loss included a bond amounting to $20,791,000 (2020: $21,887,000) bearing
interest at 4% (2020: 4%) per annum which is maturing in 2027.
Unquoted investments at fair value through profit or loss included compulsorily convertible debentures amounting to $74,034,000
(2020: $72,452,000) bearing interest at rates ranging from 0.0001% to 10.0% (2020: 0.0001% to 10.0%) per annum which is maturing in
2022 and 2040 respectively.
Annual Report 2021
176
NOTES TO THE FINANCIAL STATEMENTS
13. Long term assets
Derivative assets
Contract assets
Call option
Service concession receivable
Trade receivables
Other receivables
Group
Company
2021
$’000
46,263
99,109
171,520
-
791,952
238,510
2020
$’000
48,723
73,458
156,643
353,586
875,810
248,179
2021
$’000
28,346
-
-
-
-
94,161
2020
$’000
39,288
-
-
-
-
540
1,347,354
1,756,399
122,507
39,828
Contract assets primarily relate to the Group’s right to consideration for development units delivered to customers under the pay-and-
stay scheme, as well as for handset and equipment delivered and accepted by customers but not yet billed at the reporting date. As at 1
January 2020, the Group’s non-current contract assets amounted to $99,523,000.
The call option granted to the Group is in connection with the disposal of its 87.51% equity interest in Ocean Properties LLP (formerly
known as Ocean Properties Private Limited) to Keppel REIT in 2011. The Group has an option to acquire the same shares exercisable
at the price of $1 upon the expiry of 99 years from 14 December 2011 under the share purchase agreement. The call option may be
exercised earlier upon the occurrence of certain specified events as stipulated in the call option deed. As at 31 December 2021, the fair
value was determined by reference to the difference in valuations obtained from an independent professional valuer for the underlying
investment property based on the remaining 840-year leasehold and 89-year leasehold (2020: based on the remaining 841-year
leasehold and 90-year leasehold). The details of the valuation techniques and inputs used for the call option are disclosed in Note 35.
The service concession receivable relates to a service concession arrangement with a governing agency of the Government of
Singapore (the grantor) to design, build, own and operate a desalination plant in Singapore, which has a capacity to produce 137,000
cubic metres of fresh drinking water per day. The plant has officially commenced operations on 29 June 2020. The Group has a
contractual right under the concession arrangement to receive fixed and determinable amounts of payment during the concession
period of 25 years irrespective of the output produced. At the end of the concession period, the grantor may require the plant to be
handed over in a specified condition or to be demolished at reasonable costs borne by the grantor. For the financial year ended 31
December 2021, service concession receivable was reclassified as “assets classified as held for sale” (Note 37). In arriving at the
carrying value of the service concession arrangement as at the end of the reporting year, effective interest rates of 4.15% (2020: 4.15%)
per annum were used to discount the future expected cash flows.
Trade receivables are related to financing arrangements for delivered rigs where the Group has retained title. $377,660,000 (2020:
$369,508,000) is due from one customer and bears floating interest at LIBOR plus a margin, and repayable in 2024 and 2025. The
remainder is due from another customer, bears fixed interest and repayable in February 2024, December 2029 and on demand. The
customer has options for early repayment. During the year, the Group recognised an expected credit loss allowance of $75,952,000
(2020: $169,611,000) on the trade receivables as detailed in Note 2.28(b)(ii). As at 1 January 2020, the Group’s long term trade
receivables amounted to $638,973,000.
Included in other receivables is an unsecured, interest-free advance to an investee which matures on 31 December 2024. In 2020, an
allowance for expected credit loss of $21,979,000 was made after taking into account the financial condition of the investee.
Included in other receivables is a secured loan receivable under the revolving credit facility (net of impairment provision) from
KrisEnergy Limited (“KrisEnergy”), an associated company under receivership, as disclosed in Note 11(b). In 2020, included in other
receivables is a secured loan receivable from KrisEnergy repayable on 30 April 2024 and bears a fixed interest rate of 15.00% per
annum.
Included in other receivables are claims receivable which represents claims from customer for long term contracts. During the year,
the Group recognised $1,170,000 of allowance for expected credit loss on claims receivable arising from the discounting effects due to
changes in the expected timing of receipt (2020: write back of allowance of $3,893,000).
The carrying amount of the long term assets approximates their fair value.
Keppel Corporation Limited
FINANCIAL REPORT
177
14.
Intangibles
Group
2021
At 1 January
Additions
Amortisation
Reclassification
Exchange differences
Goodwill
$’000
Development
Expenditure
$’000
Brand
$’000
Customer
Spectrum Contracts and
Rights Relationships
$’000
$’000
Others
$’000
Total
$’000
1,047,558
16,749
260,601
124,553
141,652
17,711
1,608,824
-
-
-
-
910
(1,662)
(2,558)
246
-
27,504
-
(9,252)
(19,881)
(21,957)
4,673
(133)
33,087
(52,885)
-
-
-
-
2,558
-
-
-
-
246
At 31 December
1,047,558
13,685
251,349
132,176
122,253
22,251
1,589,272
Cost
1,047,558
39,511
277,563
157,535
228,241
22,546
1,772,954
Accumulated amortisation
-
(25,826)
(26,214)
(25,359)
(105,988)
(295)
(183,682)
1,047,558
13,685
251,349
132,176
122,253
22,251
1,589,272
2020
At 1 January
Additions
Impairment loss
Amortisation
Exchange differences
1,047,558
-
-
-
-
16,811
1,558
-
(1,456)
(164)
269,853
141,935
189,025
17,799
1,682,981
-
-
301
-
(9,252)
(17,683)
-
-
-
(23,015)
(24,670)
312
-
-
(88)
-
1,859
(23,015)
(53,149)
148
At 31 December
1,047,558
16,749
260,601
124,553
141,652
17,711
1,608,824
Cost
1,047,558
38,258
277,563
130,031
227,598
17,873
1,738,881
Accumulated amortisation
-
(21,509)
(16,962)
(5,478)
(85,946)
(162)
(130,057)
1,047,558
16,749
260,601
124,553
141,652
17,711
1,608,824
Impairment testing of goodwill
For the purpose of impairment testing, goodwill is allocated to cash-generating units (“CGU”s).
Out of the total goodwill of $1,047,558,000, goodwill allocated from the acquisition of M1 Limited amounted to $988,288,000.
The recoverable amount of M1 as a CGU was determined based on its value-in-use using a discounted cash flow model based on cash
flow projections by management covering a 5-year period, and cash flows beyond the 5-year period were extrapolated using a terminal
growth rate of 1.48% (2020: 1.46%), premised on the estimated long term growth rate for the country where the CGU operates. Cash
flows were discounted using a discount rate of 7% (2020: 7%) per annum.
The recoverable amount was estimated to be higher than the carrying value of the M1 CGU. Accordingly, no impairment of goodwill was
recognised in 2021 and 2020. The calculation of value-in-use for the CGU is sensitive to the terminal growth rate and the discount rate
applied. Any possible reasonable change in the terminal growth rate or discount rate used in the calculation of the value-in-use amount
would not cause any impairment to goodwill.
Impairment of other intangibles
In 2020, the Group recognised an impairment loss of $23,015,000 on customer relationship in the Energy & Environment segment.
In view that the subsidiary has been making losses since acquisition and the adverse global economic environment which was
significantly affected by COVID-19, the recoverability of the intangible asset - customer relationship was uncertain. Accordingly, the
intangible asset - customer relationship was fully impaired.
Annual Report 2021
178
NOTES TO THE FINANCIAL STATEMENTS
15. Stocks
Consumable materials and supplies
Finished products for sale
Work-in-progress (net of provision)
Properties held for sale
Group
2021
$’000
227,224
82,651
1,289,838
3,004,272
(a)
2020
$’000
190,370
99,087
1,072,890
3,597,080
4,603,985
4,959,427
For work-in-progress balances, the Group determines the estimated net realisable value based on arrangements to market the work-
in-progress and discounted cash flow models. The provision for stocks to write down its carrying value to its net realisable value at the
end of the financial year was $177,220,000 (2020: $146,202,000). See Note 2.28(b)(ix) for further disclosures on key estimates made in
estimating NRV of the Group’s work-in-progress.
(a)
Properties held for sale
Properties under development
Land cost
Development cost incurred to date
Related overhead expenditure
Completed properties held for sale
Provision for properties held for sale
Movements in the provision for properties held for sale are as follows:
At 1 January
Charge to profit and loss account
Exchange differences
Amount written off
Subsidiary disposed
At 31 December
Group
2021
$’000
2020
$’000
1,688,380
526,584
210,084
2,425,048
600,140
3,025,188
(20,916)
1,988,513
622,565
196,676
2,807,754
809,313
3,617,067
(19,987)
3,004,272
3,597,080
Group
2021
$’000
19,987
583
452
(106)
-
2020
$’000
25,217
2,252
(127)
(1,253)
(6,102)
20,916
19,987
The allowance for foreseeable losses is estimated taking into account the net realisable values and estimated total construction
costs. The net realisable values are based on recent selling prices for the development project or comparable projects or
independent valuation and the prevailing market conditions less costs to be incurred in selling the property. The estimated total
construction costs include contracted amounts plus estimated costs to be incurred taking into consideration relevant data and
trend. The allowance is progressively reversed for those residential units sold above their carrying amounts.
As at 31 December 2021, properties amounting to $220,556,000 (2020: $274,452,000) in value and included in the above
balances were mortgaged to the banks as securities for borrowings as referred to in Note 23.
During the year, the Group reclassified $3,544,000 (2020: $714,733,000) from properties held for sale to investment properties
due to change of use of the assets from property trading to holding for capital gain and/or rental yield. The Group also
reclassified $29,547,000 (2020: $4,221,000) from fixed asset to properties held for sale due to change of use of the assets. In the
prior year, $11,999,000 from properties held for sale were reclassified to fixed asset.
Interest capitalised during the financial year amounted to $17,499,000 (2020: $19,980,000) at rates of 0.79% to 0.95%
(2020: 0.80% to 2.50%) per annum for Singapore properties and 1.50% to 7.00% (2020: 3.00% to 7.00%) per annum for overseas
properties.
Keppel Corporation Limited
FINANCIAL REPORT
16. Contract assets/liabilities
Contract assets
Contract liabilities
179
Group
31 December
2021
$’000
2020
$’000
1 January
2020
$’000
3,169,694
2,657,231
3,497,476
1,002,024
2,072,303
1,824,965
In 2020, contract assets amounting to $447,337,000 (net of the expected credit loss allowance of $19,301,000) were reclassified to
stocks – work-in-progress.
Contract assets relating to certain rig-building contracts where the scheduled dates of the rigs have been deferred and have higher
counter-party risks amounted to $1,707,190,000 (2020: $1,653,547,000). See Note 2.28(b)(ii) – Other contracts for further disclosures
on key estimates used in estimating the expected credit loss on these contract assets.
Contract liabilities included proceeds received from sale of properties of $535,334,000 (2020: $971,638,000). Remaining contract
liabilities of $466,690,000 (2020: $1,100,665,000) are recorded when receipts from customers exceed the value of work transferred
where the customer is invoiced on a milestone payment schedule.
Revenue recognised during the financial year ended 31 December 2021 in relation to contract liability balance at 1 January 2021 was
$1,358,302,000 (2020: $816,736,000).
The aggregate amount of the transaction price allocated to the remaining performance obligation is $6,047,351,000 (2020: $5,490,832,000)
and the Group expects to recognise this revenue over the next 1 to 4 years (2020: 1 to 4 years).
Movements in the allowance for expected credit loss for contract assets are as follows:
At 1 January
Charge to profit and loss account (Note 27)
Amount utilised
Reclassified to stocks - work-in-progress (Note 15)
At 31 December
17. Amounts due from/to
Subsidiaries
Amounts due from
- trade
- advances
Allowance for expected credit loss
Amounts due to
- trade
- advances
Movements in the allowance for expected credit loss are as follows:
At 1 January
Charge to profit and loss account
At 31 December
Group
31 December
1 January
2021
$’000
432,541
23,225
(23,225)
-
432,541
2020
$’000
21,000
430,842
-
(19,301)
432,541
2020
$’000
21,000
-
-
-
21,000
Company
2021
$’000
2020
$’000
104,390
9,893,770
9,998,160
(145,251)
112,547
9,698,763
9,811,310
(6,600)
9,852,909
9,804,710
9,820
165,982
4,138
197,821
175,802
201,959
6,600
138,651
145,251
6,600
-
6,600
Advances to and from subsidiaries are unsecured and are repayable on demand. Interest is charged at rates up to 4.00% (2020: up to
4.00%) per annum on interest-bearing advances.
Annual Report 2021
180
NOTES TO THE FINANCIAL STATEMENTS
17. Amounts due from/to (continued)
Associated Companies and Joint Ventures
Amounts due from
- trade
- advances
Allowance for expected credit loss
Amounts due to
- trade
- advances
Movements in the allowance for expected credit loss are as follows:
At 1 January
Charge to profit and loss account
At 31 December
Group
2021
$’000
2020
$’000
Company
2021
$’000
2020
$’000
169,612
453,932
160,987
349,170
623,544
510,157
(31,800)
(16,888)
32
22,078
22,110
-
591,744
493,269
22,110
44,017
242,068
49,213
286,695
286,085
335,908
16,888
14,912
31,800
16,480
408
16,888
882
-
882
-
-
-
152
-
152
-
152
-
-
-
-
-
-
Advances to and from associated companies and joint ventures are unsecured and are repayable on demand. Interest is charged at
rates ranging from 0.05% to 13.00% (2020: 0.09% to 15.00%) per annum on interest-bearing advances.
As at 1 January 2020, the Group’s amount due from associated companies and joint ventures relating to trade amounted to
$140,502,000.
18. Debtors
Trade debtors
Allowance for expected credit loss
Service concession receivable
Sundry debtors
Prepayments
Tax recoverable
Value Added Tax receivable
Interest receivable
Deposits paid
Recoverable accounts
Accrued receivables
Advances to subcontractors
Advances to non-controlling shareholders of subsidiaries
Allowance for expected credit loss
Group
2021
$’000
1,218,664
(233,267)
985,397
-
348,227
129,802
7,755
103,382
25,973
251,307
62,337
361,846
19,340
4,375
1,314,344
(131,129)
1,183,215
2020
$’000
1,806,269
(241,871)
1,564,398
8,780
277,912
159,834
5,029
174,904
17,043
23,995
39,142
225,951
48,037
3,524
984,151
(17,474)
966,677
Total
2,168,612
2,531,075
Movements in the allowance for expected credit loss are as follows:
At 1 January
Charge to profit and loss account
Amount written off
Subsidiaries disposed
Exchange differences
Reclassified to assets held for sale
Total
259,345
113,379
(15,966)
-
7,638
-
277,534
29,989
(43,707)
(257)
(4,034)
(180)
364,396
259,345
As at 1 January 2020, the Group’s net trade debtors amounted to $1,685,857,000.
Keppel Corporation Limited
Company
2021
$’000
26
-
26
-
726
87
-
32
-
382
5,637
3,073
8
-
9,945
-
9,945
9,971
-
-
-
-
-
-
-
2020
$’000
7
-
7
-
1,044
85
-
370
21
374
8,166
2,206
-
-
12,266
-
12,266
12,273
-
-
-
-
-
-
-
FINANCIAL REPORT
19. Short term investments
Total investments at fair value through other comprehensive income:
Quoted equity shares
Investments at fair value through profit or loss:
Quoted equity shares
Unquoted debt instrument
Total investments at fair value through profit or loss
Total short term investments
181
Group
2021
$’000
2020
$’000
26,834
35,802
269
-
269
78,492
20,340
98,832
27,103
134,634
Investments at fair value through other comprehensive income are mainly in the oil and gas industry listed in Singapore.
20. Bank balances, deposits and cash
Bank balances and cash
Fixed deposits with banks
Amounts held under escrow accounts for
overseas acquisition of land, payment of
construction cost, claims and other liabilities
Amounts held under project accounts,
withdrawals from which are restricted to
payments for expenditures incurred on projects
Group
2021
$’000
2020
$’000
1,976,981
1,348,400
1,211,166
933,606
72,991
71,242
218,261
263,701
Company
2021
$’000
810
-
-
-
2020
$’000
574
-
-
-
3,616,633
2,479,715
810
574
Fixed deposits with banks of the Group mature on varying periods, substantially between 3 days to 6 months (2020: 1 day to 6 months).
This comprises Singapore Dollars fixed deposits of $268,451,000 (2020: $148,389,000) at interest rates substantially ranging from
0.05% to 0.25% (2020: 0.05% to 0.19%) per annum, and foreign currency fixed deposits of $1,079,949,000 (2020: $785,217,000) at
interest rates substantially ranging from 0.10% to 5.40% (2020: 0.01% to 6.80%) per annum.
The bank balances at 31 December 2021 include an amount of $nil (2020: $107,000) pledged to a bank in relation to certain banking
arrangement.
Cash and cash equivalents of $1,013,296,000 (2020: $763,958,000) held in the People’s Republic of China are subject to local exchange
control regulations. These regulations place restriction on the amount of currency being exported other than through dividends and
capital repatriation upon liquidations.
21. Creditors and other non-current liabilities
Trade creditors
Customers’ advances and deposits
Sundry creditors
Accrued expenses
Advances from non-controlling shareholders
Retention monies
Interest payables
Other non-current liabilities:
Accrued expenses
Derivative liabilities
Group
2021
$’000
763,233
85,277
924,520
2,947,496
144,971
187,078
46,213
2020
$’000
746,994
130,551
975,910
2,356,154
149,593
199,245
45,230
5,098,788
4,603,677
129,986
98,422
94,164
224,662
Company
2021
$’000
1,643
-
5,186
57,514
-
-
28,180
92,523
32,187
70,777
2020
$’000
1,433
-
3,562
31,620
-
-
27,193
63,808
24,114
128,336
228,408
318,826
102,964
152,450
Advances from non-controlling shareholders of certain subsidiaries are unsecured and are repayable on demand. Interest is charged at
rates ranging from 0.50% to 3.62% (2020: 1.80% to 4.94%) per annum on interest-bearing advances.
The carrying amount of the non-current liabilities approximates their fair value.
Annual Report 2021
182
NOTES TO THE FINANCIAL STATEMENTS
22. Provisions for warranties
At 1 January
(Write-back)/Charge to profit and loss account
Amount utilised
Exchange differences
At 31 December
23. Term loans
Group
Keppel Corporation Medium Term Notes
Keppel Land Medium Term Notes
Keppel Telecommunications & Transportation
Medium Term Notes
Keppel Corporation Commercial Paper
Bank loans
- secured
- unsecured
Company
Keppel Corporation Medium Term Notes
Keppel Corporation Commercial Paper
Unsecured bank loans
Group
2021
$’000
39,449
(9,866)
(252)
(399)
2020
$’000
36,448
2,352
(13)
662
28,932
39,449
2021
2020
Due within
one year
$’000
Due after
one year
$’000
Due within
one year
$’000
Due after
one year
$’000
700,000
199,978
-
128,000
2,053,710
709,403
100,000
-
-
-
-
-
2,653,932
629,617
100,000
-
8,852
3,622,478
717,559
3,215,240
110,485
596,215
4,322,117
3,626,830
4,659,308
6,795,912
4,432,602
7,606,594
700,000
128,000
2,498,730
2,053,710
-
2,059,985
-
-
3,406,552
2,653,932
-
1,875,085
3,326,730
4,113,695
3,406,552
4,529,017
(a)
(b)
(c)
(d)
(e)
(f)
(a)
(d)
(f)
(a)
(b)
(c)
(d)
At the end of the financial year, notes issued under the US$5,000,000,000 Multi-Currency Medium Term Note Programme by
the Company amounted to $2,753,710,000 (2020: $2,653,932,000). The notes denominated in Singapore Dollars, US Dollars and
Japanese Yen, are unsecured and comprised fixed rate notes due from 2022 to 2042 (2020: from 2022 to 2042) with interest
rates ranging from 0.88% to 4.00% (2020: 0.88% to 4.00%) per annum.
At the end of the financial year, notes issued under the US$3,000,000,000 Multi-Currency Medium Term Note Programme by
Keppel Land Limited and its wholly-owned subsidiary, Keppel Land Financial Services Pte. Ltd. amounted to $579,518,000 (2020:
$329,767,000). The notes denominated in Singapore Dollars, are unsecured and comprised fixed rate notes due from 2023 to
2026 (2020: 2023), with interest rates ranging from 2.00% to 2.84% (2020: 2.68% to 2.84%) 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 amounted to $329,863,000 (2020: $299,850,000). The notes denominated in Singapore Dollars, are
unsecured and comprised fixed rate notes due from 2022 to 2024 (2020: 2022 to 2024) with interest rates ranging from 3.80% to
3.90% (2020: 3.80% to 3.90%) per annum.
At the end of the financial year, notes issued under the $500,000,000 Multi-Currency Medium Term Note Programme by Keppel
Telecommunications & Transportation Ltd, amounted to $100,000,000 (2020: $100,000,000). The fixed rate notes, due in 2024,
are unsecured and carried an interest rate of 2.85% per annum from September 2017 to September 2022 and 3.85% per annum
from September 2022 to September 2024 (2020: 2.85% per annum from September 2017 to September 2022 and 3.85% per
annum from September 2022 to September 2024).
At the end of the financial year, commercial papers issued under the US$1,000,000,000 Multi-Currency Euro Commercial
Paper Programme by the Company amounted to $128,000,000 (2020: $nil). The commercial papers, which are denominated in
Singapore Dollars, are unsecured and comprised fixed rate commercial papers due in 2022 (2020: n.a.) with interest rates ranging
from 0.58% to 0.64% (2020: n.a.) per annum.
Keppel Corporation Limited
FINANCIAL REPORT
183
(e)
The secured bank loans consist of:
-
-
-
-
-
A term loan of $50,000,000 drawn down by a subsidiary. The term loan is repayable in 2023 and is secured on certain
assets of the subsidiary. Interest is based on money market rates range of 0.90% to 2.28% per annum.
A term loan of $42,732,000 drawn down by a subsidiary. The term loan is repayable in 2032 and is secured on certain
assets of the subsidiary. Interest is based on money market rates range of 2.38% to 4.43% per annum.
A term loan of $40,448,000 drawn down by a subsidiary. The term loan is repayable in 2033 and is secured on certain
assets of the subsidiary. Interest is based on money market rates range of 2.38% to 4.43% per annum.
A term loan of $370,536,000 drawn down by a subsidiary. The term loan is repayable in 2035 and is secured on certain
assets of the subsidiary. Interest is based on money market rates of 4.31% per annum.
Other secured bank loans totalling $222,695,000 (2020: $294,745,000) comprised $92,264,000 (2020: $84,088,000) of
loans denominated in Singapore Dollars and $130,431,000 (2020: $210,657,000) of foreign currency loans. They are
repayable within one to six (2020: one to seven) years and are secured on investment properties and certain fixed and
other assets of the subsidiaries. Interest on foreign currency loans is based on money market rates ranging from 3.90% to
13.25% (2020: 0.70% to 13.25%) per annum.
(f)
The unsecured bank loans of the Group totalling $6,837,718,000 (2020: $7,948,947,000) comprised $2,768,820,000 (2020:
$4,972,916,000) of loans denominated in Singapore Dollars and $4,068,898,000 (2020: $2,976,031,000) of foreign currency loans.
They are repayable within one to ten (2020: one to eleven) years. Interest on loans denominated in Singapore Dollars is based on
money market rates ranging from 0.67% to 3.05% (2020: 0.58% to 3.08%) per annum. Interest on foreign currency loans is based
on money market rates ranging from 0.06% to 10.95% (2020: 0.50% to 8.58%) per annum.
The unsecured bank loans of the Company totalling $4,558,715,000 (2020: $5,281,637,000) comprised $1,280,000,000 (2020:
$3,142,000,000) of loans denominated in Singapore Dollars and $3,278,715,000 (2020: $2,139,637,000) of foreign currency loans.
They are repayable within one to four years (2020: one to five years). Interest on loans denominated in Singapore Dollars is based
on money market rates ranging from 0.71% to 1.28% (2020: 0.58% to 3.08%) per annum. Interest on foreign currency loans is
based on money market rates ranging from 0.06% to 1.46% (2020: 0.50% to 3.24%) per annum.
The Group has mortgaged certain properties and assets of up to an aggregate amount of $2,223,200,000 (2020: $2,220,363,000)
to banks for loan facilities.
The fair values of term loans for the Group and Company are $11,304,660,000 (2020: $12,014,024,000) and $7,312,908,000
(2020: $7,845,496,000) respectively. These fair values, under Level 2 of the fair value hierarchy, are computed on the discounted
cash flow method using discount rates based upon the borrowing rates which the Group expect would be available as at the
balance sheet date.
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
Group
2021
$’000
2020
$’000
Company
2021
$’000
2020
$’000
1,652,688
3,929,770
1,213,454
2,036,433
4,038,732
1,531,429
889,922
2,476,893
746,880
1,000,000
2,379,017
1,150,000
6,795,912
7,606,594
4,113,695
4,529,017
Annual Report 2021
184
NOTES TO THE FINANCIAL STATEMENTS
24. Deferred taxation
Deferred tax liabilities
Deferred tax assets
Net deferred tax liabilities
Group
2021
$’000
426,891
(212,679)
2020
$’000
443,547
(159,427)
214,212
284,120
Net deferred tax liabilities are determined by offsetting deferred tax assets against deferred tax liabilities of the same entities arising
from same tax jurisdiction. 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 unrecognised deferred tax liabilities of $52,622,000 (2020: $61,237,000) for taxes that would be payable on the
undistributed earnings of certain subsidiaries and associated companies as these earnings would not be distributed in the foreseeable
future and the Group is in a position to control the timing of the reversal of the temporary differences.
The Group has unutilised tax losses and capital allowances of $1,035,843,000 (2020: $893,023,000) 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. Tax losses amounting to $276,311,000 (2020: $214,920,000) can be carried
forward for a period of one to ten years subsequent to the year of the loss, while the remaining tax losses have no expiry date.
Movements in deferred tax liabilities and assets are as follows:
At
1 January
$’000
Charged/
(credited) to
profit or loss
$’000
Charged/
(credited)
to other
comprehen-
sive
income
$’000
Subsidiaries
disposed
$’000
Reclassifi-
cation
$’000
Exchange
differences
$’000
At
31 December
$’000
301,431
116,697
82,773
500,901
(101,324)
46,223
5,132
(49,969)
-
-
(108)
(108)
-
-
(4,224)
(4,224)
(113,103)
(84,213)
(19,465)
(216,781)
284,120
(3,099)
(20,523)
1,785
(21,837)
(71,806)
-
-
-
-
-
-
-
-
(108)
(4,224)
-
-
-
-
-
-
-
-
-
2,399
7,237
3,669
13,305
202,506
170,157
87,242
459,905
(1,323)
(5,854)
102
(117,525)
(110,590)
(17,578)
(7,075)
(245,693)
6,230
214,212
295,789
75,175
79,430
450,394
9,906
38,354
2,377
50,637
-
-
73
73
(18,043)
(88,146)
(21,631)
(127,820)
322,574
(94,206)
(212)
8,972
(51)
(85,285)
(34,648)
-
-
(212)
(139)
-
-
-
-
-
-
-
-
-
(4,197)
(148)
-
(4,345)
-
(4,701)
-
(4,701)
(9,046)
(67)
3,316
893
4,142
(642)
(338)
2,217
1,237
5,379
301,431
116,697
82,773
500,901
(113,103)
(84,213)
(19,465)
(216,781)
284,120
Group
2021
Deferred Tax Liabilities
Accelerated tax depreciation
Investment properties valuation
Offshore income & others
Total
Deferred Tax Assets
Other provisions
Unutilised tax benefits
Lease liabilities
Total
Net Deferred Tax Liabilities
2020
Deferred Tax Liabilities
Accelerated tax depreciation
Investment properties valuation
Offshore income & others
Total
Deferred Tax Assets
Other provisions
Unutilised tax benefits
Lease liabilities
Total
Net Deferred Tax Liabilities
Keppel Corporation Limited
FINANCIAL REPORT
25. Revenue
Revenue from contracts with customers
Revenue from construction contracts
Sale of property
Sale of goods
Sale of electricity, utilities and gases
Revenue from telecommunication services
Revenue from other services rendered
Other sources of revenue
Rental income from investment properties
26. Staff costs
Wages and salaries
Employer’s contribution to Central Provident Fund
Share plans granted to Director and employees
Other staff benefits
27. Operating profit
Operating profit is arrived at after charging/(crediting) the following:
Included in materials and subcontract costs:
Fair value (gain)/loss on
- forward foreign exchange contracts
Cost of stocks & contract assets
Direct operating expenses
-
investment properties that generated rental income
Included in staff costs:
Key management’s emoluments
(including executive directors’ remuneration)
- short-term employee benefits
- post-employment benefits
- share plans granted
Included in expected credit loss on debtors & receivables,
contract assets and financial guarantee:
Expected credit loss on debtors and receivables (Note 13 & 18)
Bad debts written-off
Expected credit loss on contract assets (Note 16)
Expected credit loss on financial guarantee
185
Group
2021
$’000
2020
$’000
2,269,719
1,538,477
462,576
3,050,539
702,263
526,223
8,549,797
1,705,056
1,176,590
396,346
1,912,901
714,894
575,234
6,481,021
74,916
93,321
8,624,713
6,574,342
Group
2021
$’000
910,764
81,021
37,369
86,496
2020
$’000
893,717
77,722
39,882
108,807
1,115,650
1,120,128
Group
2021
$’000
2020
$’000
595
1,390,762
(3,430)
1,051,028
32,507
36,473
11,928
110
10,872
9,728
92
10,203
194,356
831
23,225
146,024
219,668
572
430,842
-
Annual Report 2021
186
NOTES TO THE FINANCIAL STATEMENTS
27. Operating profit (continued)
Included in other operating income - net:
Government grant income
Impairment of associated companies (Note 11)
Impairment/write-off of fixed and intangible assets
Provision for stocks
Fair value gain on investment properties* (Note 8)
Fair value (gain)/loss on
-
investments
- forward foreign exchange contracts
Gain on differences in foreign exchange
(Profit)/Loss on sale of fixed assets
Profit on sale of investments
Gain on disposal of subsidiaries
Gain on disposal of associated companies and joint ventures
Gain from sale of units in associated companies
(Gain)/Loss from change in interest in associated companies
Fair value gain on remeasurement of remaining interest in
a joint venture/an associated company
Gain from reclassification of associated companies to investments
carried at fair value through other comprehensive income
Fees and other remuneration to Directors of the Company
Auditors’ remuneration
- auditors of the Company
- other auditors of subsidiaries
Non-audit fees paid to
- auditors of the Company
- other auditors of subsidiaries
Group
2021
$’000
(40,718)
35,082
53,550
34,905
(238,458)
(315,540)
(1,129)
(6,532)
(9,550)
(9,833)
(241,054)
(208,635)
-
(8,516)
2020
$’000
(155,284)
48,686
62,075
50,502
(265,230)
61,023
(11,578)
(29,806)
1,667
-
(63,995)
(34,419)
(48,010)
1,615
(69,469)
(26,034)
-
2,374
3,414
2,088
1,932
209
(124,769)
2,323
3,545
2,099
1,730
178
Government grant income of $17,202,000 (2020: $105,327,000) was recognised during the financial year under the Jobs Support
Scheme (“JSS”). The JSS is a temporary scheme introduced in the Singapore Budget 2020 to help enterprises retain local employees.
Under the JSS, employers will receive cash grants in relation to the gross monthly wages of eligible employees.
Gain on disposal of associated companies and joint ventures was mainly attributable to the divestment of Dong Nai Waterfront City
LLC, Nanjing Jinsheng Real Estate Development Co., Ltd., Wuhu Sanshan Port Co., Ltd., and gain from divestment of interest in Keppel
Logistics (Foshan) following agreement reached with local authorities on Lanshi port closure compensation. Dong Nai Waterfront
City LLC was disposed to an associated company of the Group. In the prior year, gain on disposal of associated companies and joint
ventures was mainly attributable to the sale of interest in Business Online Public Company Limited and Taicang Xuchang Property Co.,
Ltd.
The fair value gain on remeasurement of remaining interest in a joint venture arose from the partial disposal with loss of control over
the Group’s former wholly-owned subsidiary, Tianjin Fushi Property Development Co., Ltd. In the prior year, the fair value gain on
remeasurement of remaining interest in an associated company arose from the partial disposal with loss of control over the Group’s
former wholly-owned subsidiary, Chengdu Hilltop Development Co Ltd.
*
In 2020, the effect of rental guarantee of $3,200,000 to be provided to Keppel REIT, an associated company, as part of the sale consideration for Keppel Bay Tower
Pte. Ltd was included in the fair value gain on Keppel Bay Tower.
Keppel Corporation Limited
FINANCIAL REPORT
28.
Investment income, interest income and interest expenses
Investment income from:
Shares - quoted
Shares / funds - unquoted
Interest income from:
Bonds, debentures, deposits and others
Associated companies and joint ventures
Service concession arrangement
Interest expenses on notes, loans and overdrafts
Interest expenses on lease liabilities
Fair value gain/(loss) on interest rate caps and swaps
29. Taxation
(a)
Income tax expense
Tax expense comprised:
Current tax
Adjustment for prior year’s tax
Others
Deferred tax (Note 24):
Current deferred tax
Adjustment for prior year’s tax
Land appreciation tax:
Current year
187
Group
2021
$’000
37,766
73,186
110,952
42,304
53,688
14,382
2020
$’000
20,763
8,583
29,346
81,112
66,745
14,196
110,374
162,053
(221,090)
(31,501)
1,570
(260,126)
(31,964)
(176)
(251,021)
(292,266)
Group
2021
$’000
307,720
(34,238)
16,854
290,336
(70,595)
(1,211)
(71,806)
2020
$’000
181,889
(14,168)
14,779
182,500
(57,355)
22,707
(34,648)
106,454
105,555
324,984
253,407
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 due to the following:
Profit/(Loss) before tax
Share of (profit)/loss of associated companies and joint ventures, net of tax
Profit/(Loss) before tax and share of profit of associated companies and joint ventures
Tax calculated at tax rate of 17% (2020: 17%)
Income not subject to tax
Expenses not deductible for tax purposes
Unrecognised tax benefits
Effect of different tax rates in other countries
Adjustment for prior year’s tax
Land appreciation tax
Effect of tax reduction on land appreciation tax
Group
2021
$’000
1,334,996
(466,900)
868,096
147,576
(155,990)
217,497
26,387
45,128
(35,449)
106,454
(26,619)
2020
$’000
(254,687)
162,221
(92,466)
(15,719)
(102,858)
216,061
37,444
30,774
8,539
105,555
(26,389)
324,984
253,407
Annual Report 2021
188
NOTES TO THE FINANCIAL STATEMENTS
29. Taxation (continued)
(b) Movement in current income tax liabilities
At 1 January
Exchange differences
Tax expense
Adjustment for prior year’s tax
Land appreciation tax
Net income taxes paid
Subsidiaries disposed
Reclassification
- tax recoverable and others
- deferred tax
-
liabilities directly associated with assets
classified as held for sale
Group
Company
2021
$’000
358,802
14,632
307,720
(34,238)
106,454
(259,964)
(2,182)
2020
$’000
248,425
3,528
181,889
(14,168)
105,555
(177,284)
-
14,328
-
19,803
(4,701)
(73)
(4,245)
2021
$’000
29,155
-
8,474
(5,300)
-
7,290
-
32
-
-
2020
$’000
31,523
-
5,744
(13,900)
-
5,788
-
-
-
-
At 31 December
505,479
358,802
39,651
29,155
30. Earnings per ordinary share
Group
2021
$’000
2020
$’000
Basic
Diluted
Basic
Diluted
Net profit/(loss) attributable to shareholders of the company
1,022,651
1,022,651
(505,860)
(505,860)
Weighted average number of ordinary shares
(excluding treasury shares)
Adjustment for dilutive potential ordinary shares
Weighted average number of ordinary shares used
Number of Shares
‘000
Number of Shares
‘000
1,820,424
-
1,820,424
10,447
1,818,398
1,818,398
-
9,267
to compute earnings per share (excluding treasury shares)
1,820,424
1,830,871
1,818,398
1,827,665
Earnings per ordinary share
56.2 cts
55.9 cts
(27.8) cts
(27.7) cts
31. Dividends
A final cash dividend of 21.0 cents per share tax exempt one-tier (2020: final cash dividend of 7.0 cents per share tax exempt one-tier)
in respect of the financial year ended 31 December 2021 has been proposed for approval by shareholders at the next annual general
meeting to be convened.
Together with the interim cash dividend of 12.0 cents per share tax exempt one-tier (2020: interim cash dividend of 3.0 cents per share
tax exempt one-tier), total distributions paid and proposed in respect of the financial year ended 31 December 2021 will be 33.0 cents
per share (2020: 10.0 cents per share).
During the financial year, the following distributions were made:
A final cash dividend of 7.0 cents per share tax exempt one-tier on the issued
and fully paid ordinary shares in respect of the previous financial year
An interim cash dividend of 12.0 cents per share tax exempt one-tier on the issued
and fully paid ordinary shares in respect of the current financial year
In the prior year, total distributions of $273,078,000 were made.
$’000
127,402
218,350
345,752
Keppel Corporation Limited
FINANCIAL REPORT
32. Commitments
(a) Capital commitments
Capital expenditure/commitments not provided for in the financial statements:
In respect of contracts placed:
- for purchase and construction of investment properties
- for purchase of fixed assets
- for purchase/subscription of shares
- for commitments to associated companies and joint ventures
- for commitments to private funds
Amounts approved by Directors in addition to contracts placed:
- for purchase and construction of investment properties
- for purchase of fixed assets
- for purchase/subscription of shares mainly in property development companies
Less: Non-controlling shareholders’ share
189
Group
2021
$’000
2020
$’000
484,512
252,960
548,066
955,074
60,553
717,065
261,849
32,015
3,312,094
179,635
6,426
165,437
1,011,055
77,939
931,732
265,833
58,450
2,696,507
(118,362)
(36,962)
3,193,732
2,659,545
There was no significant future capital expenditure/commitment for the Company.
(b)
Lessee’s lease commitments
The Group has adopted SFRS(I) 16 Leases on 1 January 2019. Under the new standard, an asset (the right to use the leased item)
and a financial liability to pay rentals are recognised on balance sheet. The right-of-use assets and lease liabilities are disclosed in
Note 9.
33. Contingent liabilities and guarantees
Guarantees in respect of banks and other loans
granted to subsidiaries, associated companies and joint ventures
Bank guarantees
Share of lease rental guarantees granted by
associated companies and joint ventures
Group
Company
2021
$’000
561,896
348,074
2020
$’000
730,002
299,082
2021
$’000
655,005
-
147,775
172,518
-
2020
$’000
823,419
-
-
1,057,745
1,201,602
655,005
823,419
See Note 2.28(b)(vi) for further disclosures relating to the Group’s claims and litigations.
Included in the above guarantees is a bilateral agreement between the Group and financial institutions which guaranteed a revolving
credit facility granted to Floatel International Limited, an associated company, amounting to $119,386,000 (2020: $nil). The guarantee is
secured on the assets of Floatel International Limited. See further details in Note 11(e).
In the prior year, the above guarantees included a bilateral agreement between the Group and a bank which guaranteed a bank loan
granted to KrisEnergy Limited, an associated company, amounting to $247,340,000. The guarantee was secured on the assets of
KrisEnergy Limited.
The financial effects of SFRS(I) 9 relating to financial guarantee contracts issued by the Company are not material to the financial
statements of the Company and therefore are not recognised.
Annual Report 2021
190
NOTES TO THE FINANCIAL STATEMENTS
34. Significant related party transactions
In addition to the related party information disclosed elsewhere in the financial statements, the Group has significant related party
transactions as follows:
Sales of goods, services and/or fixed assets to
- associated companies
-
- other related parties
joint ventures
Purchase of goods and/or services from
- associated companies
-
- other related parties
joint ventures
Treasury transactions with
- associated companies
-
joint ventures
Group
2021
$’000
138,885
592,784
143,829
2020
$’000
151,134
36,574
77,721
875,498
265,429
266,007
14,331
177,859
248,820
6,527
130,038
458,197
385,385
1,401
7,349
8,750
15,074
7,294
22,368
35. Financial risk management
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 Chief Financial
Officer of the Company and includes Chief Financial Officers of the Group’s key operating companies and Head Office specialists.
(a) Market Risk
(i)
Derivative financial instruments
2021
Cashflow hedges
- Forward foreign currency contracts
- Cross currency swaps
-
Interest rate swaps
- HSFO forward contracts
- Dated Brent forward contracts
- Electricity futures contracts
2020
Cashflow hedges
- Forward foreign currency contracts
- Cross currency swaps
-
Interest rate swaps
- HSFO forward contracts
- Dated Brent forward contracts
- Electricity futures contracts
Keppel Corporation Limited
Contract
notional
amount
$’000
5,329,496
1,200,775
3,912,772
400,325
6,951
94,691
Group
Fair Value
Asset
$’000
Liability
$’000
Notional
amount directly
impacted by
IBOR reform
$’000
47,386
387
26,343
113,369
24
27
Contract
notional
amount
$’000
4,704,600
930,757
3,750,209
476,200
37,602
43,492
21,652
55,955
32,094
1,710
224
237,763
n.a.
-
2,140,817
n.a.
n.a.
n.a.
Group
Fair Value
Asset
$’000
Liability
$’000
76,769
15,870
583
70,890
7,253
1,763
36,897
48,822
176,444
17,517
2,182
1,950
FINANCIAL REPORT
191
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”) and Dated Brent forward contracts is determined using forward
HSFO and Dated Brent prices provided by the Group’s key counterparty. The fair value of electricity future contracts is
determined based on the Uniform Singapore Energy Price quarterly base load electricity futures prices quoted on the
Singapore Exchange. The fair value of interest rate caps and interest rate swaps are based on valuations provided by the
Group’s bankers.
(ii)
Currency risk
The Group has receivables and payables denominated in foreign currencies via US Dollars, Renminbi and other currencies.
The Group’s foreign currency exposures arise mainly from the exchange rate movement of these foreign currencies
against the functional currencies of the respective Group entities. To hedge against the volatility of future cash flows
caused by changes in foreign currency rates, the Group utilises forward foreign currency contracts, cross currency swap
agreements 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. See Note 35(a)(i) for
further details pertaining to the notional amounts and fair value of the forward foreign exchange contracts. These fair value
amounts are recognised as derivative assets and derivative liabilities. As at the end of the financial year, the Company has
outstanding forward foreign exchange contracts with notional amounts totalling $4,956,170,000 (2020: $4,704,600,000).
The net positive fair value of forward foreign exchange contracts is $22,105,000 (2020: net positive fair value of
$39,872,000) comprising assets of $43,757,000 (2020: $76,769,000) and liabilities of $21,652,000 (2020: $36,897,000).
These fair value amounts are recognised as derivative assets and derivative liabilities.
As at the end of the financial year, the Group has outstanding cross currency swap agreements. See Note 35(a)(i) for
further details pertaining to the notional amounts and fair value of the cross currency swap agreements. These fair value
amounts are recognised as derivative assets and derivative liabilities.
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:
2021
2020
USD
$’000
RMB
$’000
BRL
$’000
Others
$’000
USD
$’000
RMB
$’000
BRL
$’000
Others
$’000
Group
Financial Assets
Debtors
Investments
Bank balances,
deposits & cash
Financial Liabilities
Creditors
Term loans
Lease liabilities
53,890
720,956
64,300
-
567,102
1,341,948
408,536
472,836
111,854
2,610,015
-
2,721,869
603
-
322
925
Company
Financial Assets
Debtors
Bank balances, deposits & cash
Financial Liabilities
Creditors
Term loans
Lease liabilities
189
-
34
223
13,903
-
-
13,903
USD
$’000
1,071
411,516
412,587
6,053
2,610,015
-
2,616,068
4,402
125,455
210,797
340,654
8,189
130,674
1,729
140,592
2021
RMB
$’000
58
-
58
122
-
322
444
40,209
410,654
490,693
941,556
40,885
1,787,903
-
1,828,788
759
-
613
1,372
1,105
-
157
1,262
312,242
-
37
312,279
137,781
197,823
121,781
457,385
19,538
-
-
11,381
148,939
-
19,538
160,320
Others
$’000
USD
$’000
2020
RMB
$’000
Others
$’000
-
193,760
193,760
107
130,674
-
130,781
1,274
-
1,274
4,454
1,784,895
-
1,789,349
71
163
234
163
-
157
320
-
6
6
75
97,662
-
97,737
Annual Report 2021
192
NOTES TO THE FINANCIAL STATEMENTS
35. Financial risk management (continued)
Sensitivity analysis for currency risk
If the relevant foreign currency change against SGD by 5% (2020: 5%) with all other variables held constant, the effects will
be as follows:
Profit before tax
2021
$’000
2020
$’000
Equity
2021
$’000
2020
$’000
Group
USD against SGD
- Strengthened
- Weakened
RMB against SGD
- Strengthened
- Weakened
BRL against SGD
- Strengthened
- Weakened
Company
USD against SGD
- Strengthened
- Weakened
RMB against SGD
- Strengthened
- Weakened
(72,729)
72,729
8,315
(8,315)
8,161
(8,161)
(77,487)
77,487
23,596
(23,596)
6
(6)
(568)
568
12,149
(12,149)
(89,827)
89,827
(89,604)
89,604
(19)
19
(4)
4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(iii)
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 enters into interest rate swap agreements to hedge the interest rate risk exposure arising from its Singapore
dollar and US dollar variable rate term loans (Note 23). As at the end of the financial year, the Group has interest rate swap
agreements. See Note 35(a)(i) for further details pertaining to the notional amounts and fair value of the interest rate swap
agreements for the Group. These fair value amounts are recognised as derivative assets and derivative liabilities.
The Group receives variable rates equal to Singapore Swap Offer Rate (“SOR”), Singapore Overnight Rate Average (“SORA”)
and the United States Dollar London Inter-bank Offer Rate (“USD LIBOR”) (2020: SOR and LIBOR) and pays fixed rates of
between 0.19% and 3.62% (2020: 0.19% and 3.62%) on the notional amount. These interest rate swap agreements are
held for hedging interest rate risk arising from variable rate borrowings, with interest rates ranging from SOR, SORA and
USD LIBOR. This amounts to 30% (2020: 26%) of the Group’s total amount of borrowings excluding notional amounts of
$470,419,000 (2020: $667,720,000) relating to highly probable future borrowings.
During the year, there was a loss of $23,065,000 (2020: $nil) on hedge ineffectiveness in the Energy & Environment segment.
Sensitivity analysis for interest rate risk
If interest rates increase/decrease by 0.5% (2020: 0.5%) with all other variables held constant, the Group’s profit before tax
would have been lower/higher by $17,560,000 (2020: $22,950,000) as a result of higher/lower interest expense on floating
rate loans.
(iv) 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 benchmark fuel
price indices, HSFO 180-CST and Dated Brent. As at the end of the financial year, the Group has outstanding HSFO and
Dated Brent forward contracts. See Note 35(a)(i) for further details pertaining to the notional amounts and fair value of the
HSFO and Dated Brent forward contracts for the Group. These fair value amounts are recognised as derivative assets and
derivative liabilities.
The Group hedges against fluctuations in electricity prices via its daily sales of electricity. Exposure to price fluctuations is
managed via electricity futures contracts. As at the end of the financial year, the Group has outstanding electricity futures
contracts. See Note 35(a)(i) for further details pertaining to the notional amounts and fair value of the electricity futures
contracts. These fair value amounts are recognised as derivative assets and derivative liabilities.
The Group is exposed to equity securities price risk arising from equity investments classified as investments at fair
value through profit or loss and investments at fair value through other comprehensive income. 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.
Keppel Corporation Limited
FINANCIAL REPORT
193
Sensitivity analysis for price risk
If prices for HSFO and Dated Brent increase/decrease by 5% (2020: 5%) with all other variables held constant, the Group’s
hedging reserve in equity would have been higher/lower by $25,601,000 (2020: $26,479,000) and $338,000 (2020:
$2,118,000) respectively as a result of fair value changes on cash flow hedges.
If prices for electricity futures contracts increase/decrease by 5% (2020: 5%) with all other variables held constant, the
Group’s hedging reserve in equity would have been lower/higher by $16,623,000 (2020: $2,154,000) as a result of fair value
changes on cash flow hedges.
If prices for quoted investments increase/decrease by 5% (2020: 5%) with all other variables held constant, the Group’s
profit before tax would have been higher/lower by $3,579,000 (2020: $7,226,000) as a result of higher/lower fair value gains
on investments at fair value through profit or loss, and the Group’s fair value reserve in other comprehensive income would
have been higher/lower by $26,458,000 (2020: $27,021,000) as a result of higher/lower fair value gains on investments at
fair value through other comprehensive income.
The various sensitivity rates used in the sensitivity analysis for currency, interest rate and price risks represent rates
generally used internally by management when assessing the various risks.
(v)
Cash flow and fair value interest rate risk
The Group is exposed mainly to the Singapore Swap Offer Rate (“SOR”) and the United States Dollar London Inter-bank
Offer Rate (“USD LIBOR”). The greatest change will be amendments to the contractual terms of the SOR-referenced
floating-rate loans and the associated swaps, the contractual terms of the USD LIBOR-referenced floating-rate loans and
the associated swaps and the corresponding update of the relevant hedge designations. Amendments will also be made to
the contractual terms of certain receivables that are IBOR-referenced. There is currently uncertainty around the timing and
precise nature of these changes.
Hedging relationships for which ‘Phase 1’ amendments apply
The ‘Phase 1’ amendments provided temporary relief from applying specific hedge accounting requirements to hedging
relationships directly impacted by IBOR reform. The temporary reliefs would end when the uncertainty arising from IBOR
reform is no longer present.
The Group has ascertained that IBOR uncertainty is still present with respect to its cash flow hedge of most SOR-linked
borrowings and all USD LIBOR-linked borrowings with interest rate fixing dates falling after 30 June 2023, because the
hedging instrument and the hedged item have not yet been transitioned to SORA and SOFR respectively.
The following Phase 1 reliefs are applied to the cash flow hedges linked to SOR and USD LIBOR:
•
•
•
When considering the ‘highly probable’ requirement, the Group has assumed that the SOR interest rate and USD
LIBOR interest rate on which the Group’s respective hedged debts are based do not change as a result of IBOR
reform;
In assessing whether the hedge is expected to be highly effective on a forward-looking basis, the Group has
assumed that the SOR and USD LIBOR interest rates, on which the cash flows of the hedged debts and interest rate
swaps that hedges these debts are based, are not altered by the IBOR reform; and
The Group has not recycled the cash flow hedge reserve relating to the period after the reforms are expected to take
effect.
Hedging relationships for which ‘Phase 2’ amendments apply
The Group has judged that IBOR uncertainty is no longer present with respect to its cash flow hedge of S$200 million
SOR-linked borrowings with interest rate fixing dates falling after 30 June 2023, once both the hedging instrument and the
hedged item have been amended to the alternative benchmark rate with fixed adjustment spreads.
In the current year, the Group has applied the following hedge accounting reliefs provided by the Phase 2 amendments for
its hedging relationships that have already transitioned from SOR to SORA:
•
•
Hedge designation: When the Phase 1 amendments cease to apply, the Group has amended its hedge designation
to reflect the following changes which are required by IBOR reform:
–
–
designating SORA as a hedged risk;
the contractual benchmark rate of the hedged SGD borrowing has been amended from SOR to SORA plus an
adjustment spread; and
the variable rate of the hedging interest rate swap has been amended from SOR to SORA plus an adjustment
spread.
–
These amendments to the hedge documentation do not require the Group to discontinue its hedge relationships.
Amounts accumulated in the cash flow hedge reserve: When the Group amended its hedge designation for changes
to its SOR borrowing that is required by IBOR reform, the accumulated amount outstanding in the cash flow hedge
reserve was deemed to be based on SORA. The amount is reclassified to profit or loss in the same periods during
which the hedged SORA cash flows affect profit or loss.
Annual Report 2021
194
NOTES TO THE FINANCIAL STATEMENTS
35. Financial risk management (continued)
(b) 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 that are consistent with market practice. 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 Group assesses on a forward-looking basis the ECLs associated with its financial assets which are mainly debtors, amounts
due from associated companies and joint ventures and bank balances, deposits and cash.
ECLs are probability-weighted estimates of credit losses. Credit losses are measured at the present value of all cash shortfalls
(i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group
expects to receive). ECLs are discounted at the effective interest rate of the financial asset. At each balance sheet date, the
Group assesses whether financial assets carried at amortised cost and at FVOCI are credit-impaired. A financial asset is ‘credit-
impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have
occurred. These events include probability of insolvency, significant financial difficulties of the debtor and default or significant
delay in payments.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when
estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost
or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and
informed credit assessment and includes forward-looking information.
The Group uses a provision matrix to measure the ECLs. In measuring the ECLs, assets are grouped based on shared credit risk
characteristics and days past due. In calculating the expected credit loss rates, the Group considers historical loss rates for each
category of customers and adjusts to reflect current and forward-looking macroeconomic factors affecting the ability of the
customers to settle the receivables.
Trade receivables and contract assets are written off when there is no reasonable expectation of recovery, such as a debtor
failing to engage in a repayment plan with the Group.
The Group’s credit risk exposure in relation to debtors under SFRS(I) 9 as at 31 December 2021 and 2020 that have not been
assessed on a contract-by-contract basis are set out in the provision matrix as follows:
Contract
assets
$’000
Current
$’000
1 to 3 months
$’000
3 to 6 months
$’000
> 6 months
$’000
Total
$’000
Trade receivables
-
-
-
1.8%
99,065
1,801
1.7%
0.4%
145,297
155,142
2,402
684
-
-
-
1.4%
177,642
2,402
2.3%
85,649
1,932
0.4%
123,005
543
16.0%
10,442
1,666
2.7%
60,841
1,664
10.0%
20,470
2,052
2.7%
42,643
1,165
8.7%
2,862
249
12.0%
8,102
970
21.6%
1,583
342
19.7%
14,665
2,894
17.7%
13,669
2,416
35.5%
31,636
11,245
30.5%
5,893
1,798
29.3%
24,851
7,281
126,038
6,132
401,018
16,965
113,595
6,124
382,806
14,285
2021
Energy & Environment
Expected loss rate
Gross carrying amount
Loss allowance
Connectivity
Expected loss rate
Gross carrying amount
Loss allowance
2020
Energy & Environment
Expected loss rate
Gross carrying amount
Loss allowance
Connectivity
Expected loss rate
Gross carrying amount
Loss allowance
Keppel Corporation Limited
FINANCIAL REPORT
195
For the remaining subsidiaries which transact with low volume of customers and customers are monitored individually for
credit loss assessment, the receivables (including concession service receivable and contract assets) are assessed individually
for lifetime expected credit losses at each reporting date. In calculating the expected credit loss, the Group uses a probability-
weighted amount that is determined by evaluating a range of possible outcomes. The possible outcomes include an unbiased
estimate of the possibility that a credit loss occurs and the possibility that no credit loss occurs even if the most likely outcome is
no credit loss.
Individual customer will be evaluated periodically for its credit risk and the credit risk assessment is based on historical, current
and forward-looking information such as:
-
-
-
-
Historical financial and default rate of the customer
Any publicly available information on the customer
Any macroeconomic or geopolitical information relevant to the customer
Any other objectively supportable information on the quality and abilities of the customer’s management relevant for its
performance
Urban Development
For investment properties, the Group manages credit risks arising from tenants defaulting on their rental by requiring the tenants
to furnish cash deposits, and/or banker’s guarantees. The Group also has a policy of regular review of debt collection and rental
contracts are entered into with customers with an appropriate credit history.
In measuring the ECL, trade debtors and contract assets are grouped based on shared credit risk characteristics and days past
due. The Group has therefore concluded that the expected loss rates for trade debtors are a reasonable approximation of the loss
rates for the contract assets.
In calculating the ECL rates, the Group considers historical loss rates for each category of customers and adjusts to reflect
current and forward-looking macroeconomic factors affecting the ability of the customers to settle the receivables.
Trade debtors and contract assets are written off when there is no reasonable expectation of recovery.
Debtors and amounts due from associated companies and joint ventures that are neither past due nor impaired are substantially
companies with good collection track record with the Group or have strong financial capacity.
As at 31 December 2021 and 31 December 2020, there was no significant concentration of credit risks.
Asset Management
The Group minimises credit risk by dealing with companies with good payment track record and by placing cash balances with
financial institutions.
In respect of credit exposure to the associated companies and joint ventures, the Group minimises credit risk through regular
monitoring of the associated companies and joint ventures’ financial standing.
As at 31 December 2021 and 2020, there are no significant financial assets that are past due and/or impaired.
Annual Report 2021
196
NOTES TO THE FINANCIAL STATEMENTS
35. Financial risk management (continued)
(c)
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
Department 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.
Information relating to the maturity profile of loans is given in Note 23. The following table details the liquidity analysis for
derivative financial instruments and borrowings of the Group and the Company based on contractual undiscounted cash inflows/
(outflows).
Within
one year
$’000
Within
one to
two years
$’000
Within
two to
five years
$’000
After
five years
$’000
4,734,239
309,972
318,068
(4,683,873)
(306,151)
(311,080)
-
-
16,035
(26,676)
17,960
(25,890)
26,006
(31,473)
959
(2,345)
3,248
10,945
25,618
220
(37,930)
(12,300)
(18,119)
(22,517)
98,110
(1,424)
14,978
(286)
1
(101)
27
23
(77)
-
(213,941)
(23,822)
281
-
-
(46)
-
-
-
-
-
-
-
-
(4,840,394)
(1,800,142)
(4,182,515)
(1,575,900)
2,609,428
2,029,812
(2,604,977)
(1,990,822)
122,527
(116,080)
12,415
(20,846)
12,399
(20,686)
29,355
(40,678)
-
-
-
-
1,970
(50,178)
61,533
(13,667)
7,253
(2,182)
1,685
(1,851)
960
(35,181)
6,341
(44,385)
142
(61,031)
9,035
(3,840)
322
(10)
-
-
78
(99)
-
-
-
-
-
-
-
-
-
-
(4,664,730)
(2,218,566)
(4,351,381)
(1,924,124)
Group
2021
Gross-settled forward foreign exchange contracts
- Receipts
- Payments
Gross-settled cross currency swaps
- Receipts
- Payments
Net-settled interest rate swaps
- Receipts
- Payments
Net-settled HSFO forward contracts
- Receipts
- Payments
Net-settled Dated Brent forward contracts
- Receipts
- Payments
Net-settled electricity futures contracts
- Receipts
- Payments
Borrowings
2020
Gross-settled forward foreign exchange contracts
- Receipts
- Payments
Gross-settled cross currency swaps
- Receipts
- Payments
Net-settled interest rate swaps
- Receipts
- Payments
Net-settled HSFO forward contracts
- Receipts
- Payments
Net-settled Dated Brent forward contracts
- Receipts
- Payments
Net-settled electricity futures contracts
- Receipts
- Payments
Borrowings
Keppel Corporation Limited
FINANCIAL REPORT
197
Within
one year
$’000
Within
one to
two years
$’000
Within
two to
five years
$’000
After
five years
$’000
4,330,930
309,972
318,068
(4,310,546)
(306,151)
(311,080)
16,035
(26,676)
17,960
(25,890)
2,238
(24,908)
10,290
(8,305)
26,006
(31,473)
22,338
(10,703)
-
-
959
(2,345)
220
-
(3,418,745)
(968,075)
(2,618,595)
(966,128)
2,609,428
2,029,812
(2,604,977)
(1,990,822)
122,527
(116,080)
12,415
(20,846)
12,399
(20,686)
29,355
(40,678)
-
-
-
-
212
292
(28,850)
(25,705)
4,922
(29,764)
142
(1,791)
(3,538,694)
(1,106,646)
(2,586,867)
(1,412,822)
Company
2021
Gross-settled forward foreign exchange contracts
- Receipts
- Payments
Gross-settled cross currency swaps
- Receipts
- Payments
Net-settled interest rate swaps
- Receipts
- Payments
Borrowings
2020
Gross-settled forward foreign exchange contracts
- Receipts
- Payments
Gross-settled cross currency swaps
- Receipts
- Payments
Net-settled interest rate swaps
- Receipts
- Payments
Borrowings
In addition to the above, creditors (Note 21) of the Group and the Company have a maturity profile of within one year from the
balance sheet date.
(d) 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. The Group’s current strategy remains unchanged from the previous financial
year. The Group and the Company are in compliance with externally imposed capital undertakings for the financial year ended 31
December 2021. Externally imposed capital undertakings are mainly debt covenants included in certain loans of the Group and
the Company requiring the Group or certain subsidiaries of the Company to maintain net gearing to total equity not exceeding
ratios ranging from 2.00 to 3.00 times.
Management monitors capital risk based on the Group’s net gearing. Net gearing is calculated as net debt divided by total equity.
Net debt is calculated as total term loans (Note 23) and total lease liabilities (Note 9) less bank balances, deposits & cash (Note 20).
Net debt
Total equity
Net gearing ratio
Group
2021
$’000
8,400,306
12,441,361
0.68x
2020
$’000
10,123,385
11,155,904
0.91x
Annual Report 2021
198
NOTES TO THE FINANCIAL STATEMENTS
35. Financial risk management (continued)
(e)
Fair Value of Financial Instruments and Investment Properties
The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in
making the measurement. The fair value hierarchy has the following levels:
•
•
•
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices)
Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs). Fair value is
determined by reference to the net tangible assets of the investments.
The following table presents the assets and liabilities measured at fair value.
Group
2021
Financial assets
Derivative financial instruments
Call option
Investments
-
-
Investments at fair value through other comprehensive income
Investments at fair value through profit or loss
Short term investments
-
-
Investments at fair value through other comprehensive income
Investments at fair value through profit or loss
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
502,310
71,314
26,834
269
186,294
-
-
20,791
-
-
-
171,520
226,052
627,197
-
-
186,294
171,520
728,362
719,302
26,834
269
600,727
207,085
1,024,769
1,832,581
Financial liabilities
Derivative financial instruments
Non-financial assets
Investment Properties
- Commercial and residential, completed
- Commercial, under construction
- Associates at fair value through profit or loss
Group
2020
Financial assets
Derivative financial instruments
Call option
Investments
-
-
-
-
-
-
-
-
-
Investments at fair value through other comprehensive income
Investments at fair value through profit or loss
Short term investments
-
-
Investments at fair value through other comprehensive income
Investments at fair value through profit or loss
504,611
66,014
35,802
78,492
348,112
-
348,112
-
-
-
-
1,495,780
2,760,648
142,238
1,495,780
2,760,648
142,238
4,398,666
4,398,666
173,270
-
-
102,749
-
20,340
-
156,643
317,680
238,438
-
-
173,270
156,643
822,291
407,201
35,802
98,832
Financial liabilities
Derivative financial instruments
Non-financial assets
Investment Properties
- Commercial and residential, completed
- Commercial, under construction
- Assets classified as held for sale
- Associates at fair value through profit or loss
Keppel Corporation Limited
684,919
296,359
712,761
1,694,039
-
-
-
-
-
-
283,805
-
283,805
-
-
650,062
-
1,166,637
2,507,438
-
148,529
1,166,637
2,507,438
650,062
148,529
650,062
3,822,604
4,472,666
FINANCIAL REPORT
199
Company
2021
Financial assets
Derivative financial instruments
Investments
-
Investments at fair value through other comprehensive income
Financial liabilities
Derivative financial instruments
2020
Financial assets
Derivative financial instruments
Investments
-
Investments at fair value through other comprehensive income
Financial liabilities
Derivative financial instruments
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
-
-
-
-
-
-
67,499
-
67,499
-
24,100
24,100
67,499
24,100
91,599
-
102,061
102,061
77,494
-
77,494
-
22,196
22,196
77,494
22,196
99,690
158,950
-
158,950
During the year, the fair value measurement of certain investments amounting to $82,443,000 were transferred from Level 2 to
Level 3 due to use of inputs not based on market observable data in the valuation techniques. In 2020, the fair values of these
investments were categorised under Level 2 as they were based on actual transacted prices.
The following table presents the reconciliation of financial instruments measured at fair value based on significant unobservable
inputs (Level 3).
At 1 January
Purchases
Sales
Fair value (loss)/gain recognised in other comprehensive income
Fair value gain/(loss) recognised in profit or loss
Reclassification
- Associates/Joint Ventures
- Transfer to Level 3
- Others
Exchange differences
Distribution
Return on capital
Capitalisation of interest on advances extended to an investee
Group
Company
2021
$’000
712,761
41,002
(47,625)
(97,219)
316,867
14,139
82,443
235
2,399
(193)
(40)
-
2020
$’000
656,877
73,091
(19,224)
60,350
(36,852)
(44,750)
(559)
(978)
(1,965)
(3,429)
30,200
2021
$’000
22,196
-
-
1,904
-
-
-
-
-
-
-
-
2020
$’000
19,230
-
-
2,966
-
-
-
-
-
-
-
At 31 December
1,024,769
712,761
24,100
22,196
The following table presents the reconciliation of investment properties measured at fair value based on significant unobservable
inputs (Level 3).
At 1 January
Development expenditure
Fair value gain
Reclassification
- Assets held for sale (Note 37)
- Stocks (Note 15)
Exchange differences
At 31 December
Group
2021
$’000
3,674,075
229,581
238,458
-
3,544
110,770
2020
$’000
3,022,091
266,219
268,430
(650,062)
714,733
52,664
4,256,428
3,674,075
The fair value of financial instruments categorised under Level 1 of the fair value hierarchy is based on published market bid
prices at the balance sheet date.
The fair value of financial instruments categorised under Level 2 of the fair value hierarchy are fair valued under valuation
techniques with market observable inputs. These include forward pricing and swap models utilising present value calculations
using inputs such as observable foreign exchange rates (forward and spot rates), interest rate curves and forward rate curves
and discount rates that reflects the credit risks of various counterparties.
Annual Report 2021
200
NOTES TO THE FINANCIAL STATEMENTS
35. Financial risk management (continued)
The following table presents the valuation techniques and key inputs that were used to determine the fair value of financial instruments
and investment properties categorised under Level 3 of the fair value hierarchy.
Description
Investments
Fair value
as at
31 December
2021
$’000
Valuation Techniques
Unobservable Inputs
Range of
unobservable
Inputs
853,249 Net asset value, discounted cash flow
and binomial option pricing
Net asset value *
Not applicable
Call option
171,520
Direct comparison method and
investment method
Discount rate
9.00% - 20.00%
Growth rate
4.26%
Discount for lack of
control
Transacted price of
comparable properties
(psf)
15.00% - 23.30%
S$1,586 - S$3,520
Capitalisation rate
3.50%
Associates at fair value through
profit or loss
Investment Properties
- Commercial and hospitality,
completed
142,238 Net asset value
Net asset value
Not applicable
1,495,780
Discounted cash flow method
and/or direct comparison method;
Discount rate
9.50% to 14.50%
Capitalisation rate
4.25% to 10.50%
Income capitalisation method
Net initial yield
6.45%
Transacted price of
comparable properties
(psm)
Transacted price of
comparable properties
(psf)
$4,690 to $7,504
$724 to $3,004
Terminal capitalisation rate
7.75%
- Commercial, under construction
2,760,648
Direct comparison method,
discounted cash flow method,
and/or residual value method
Transacted price of
comparable land plots
(psm)
$7,129 to $9,192
Gross development value
($’million)
$239 to $2,099
Discount rate
12.50% to 17.00%
Capitalisation rate
4.00% to 10.00%
Transacted price of
comparable properties
(psf)
$2,468 to $3,171
*
Fair value of unquoted equity instruments is determined by reference to the underlying assets value of the investee companies, which comprise mainly investment
properties stated at fair value or assets measured using valuation techniques that take into account key inputs such as revenue multiples, long term growth rate
and discount rate (see further details in Note 2.28(b)(x)).
Keppel Corporation Limited
FINANCIAL REPORT
201
Description
Investments
Fair value
as at
31 December
2020
$’000
Valuation Techniques
Unobservable Inputs
Range of
unobservable
Inputs
556,118 Net asset value, discounted cash flow
Net asset value *
Not applicable
and binomial option pricing, market
comparative
Call option
156,643
Direct comparison method and
investment method
Discount rate
Growth rate
Cost of equity
8.00%
6.24%
15.85%
Adjusted market multiple
1.4x
Transacted price of
comparable properties
(psf)
$1,600 to $3,721
Capitalisation rate
3.50%
Associates at fair value through
profit or loss
Investment Properties
- Commercial and hospitality,
completed
148,529 Net asset value
Net asset value
Not applicable
1,166,637
Investment method, discounted
cash flow method and/or direct
comparison method;
Discount rate
7.25% to 12.50%
Capitalisation rate
4.25% to 10.50%
Residual method;
Net initial yield
6.20%
Capitalisation method
Transacted price of
comparable properties
(psm)
Transacted price of
comparable properties
(psf)
$4,914 to $6,615
$2,835 to $3,046
Terminal capitalisation rate
9.00%
- Commercial, under construction
2,507,438
Direct comparison method,
discounted cash flow method,
and/or residual value method
Transacted price of
comparable land plots
(psm)
$7,930 to $18,770
Gross development value
($’million)
$527 to $2,042
Discount rate
12.50% to 18.00%
*
Fair value of unquoted equity instruments is determined by reference to the underlying assets value of the investee companies, which comprise mainly investment
properties stated at fair value or assets measured using valuation techniques that take into account key inputs such as revenue multiples, long term growth rate
and discount rate.
The financial instruments and investment properties categorised under Level 3 of the fair value hierarchy are generally sensitive to the
various unobservable inputs tabled above. A significant movement of each input would result in significant change to the fair value of
the respective asset/liability.
The total fair value on investments of $853,249,000 as at 31 December 2021 comprises $658,224,000 which are valued based on net
asset value. A reasonably possible alternative assumption is when the net asset value of investments increase/decrease by 5%, which
would lead to a $32,911,000 increase/decrease in fair valuation.
Valuation process of investment properties is described in Note 8.
Annual Report 2021
202
NOTES TO THE FINANCIAL STATEMENTS
36. Segment analysis
The Group is organised into business units based on their products and services, and has five main segments with six reportable
operating segments as follows:
(i)
Energy & Environment
The Energy & Environment segment is focused on business areas relating to the safe and efficient harvesting of energy sources,
serving the offshore & marine industry with an array of vessel solutions and services, renewables, and providing cities with power,
as well as solutions for waste and water & wastewater treatment. The segment comprises two reportable operating segments,
being Offshore & Marine and Infrastructure & Others.
Offshore & Marine - Principal activities include offshore production facilities and drilling rig design, construction, fabrication
and repair, ship conversions and repair and specialised shipbuilding. The operating segment has operations in Brazil, China,
Singapore, the United States and other countries. On 24 June 2021, the Company signed two non-binding MOUs; the first with
Sembcorp Marine Ltd (“Sembcorp Marine”) to enter into exclusive negotiations with a view to combining Keppel Offshore &
Marine (“Keppel O&M”) and Sembcorp Marine to form a Combined Entity, and the second, with Kyanite Investment Holdings
Pte Ltd (“Kyanite”), a wholly owned subsidiary of Temasek, to sell Keppel O&M’s legacy completed and uncompleted rigs and
associated receivables to a separate Asset Co, which would be majority owned by external investors which Kyanite intends to
procure. These two proposed transactions will be inter-conditional and pursued concurrently.
Infrastructure & Others - Principal activities include power generation, renewables, environmental engineering and infrastructure
operation and maintenance. The operating segment has operations in China, Singapore, Switzerland, the United Kingdom, and
other countries.
(ii) Urban Development
Principal activities include property development and investment, as well as master development. The segment has operations in
China, India, Indonesia, Singapore, Vietnam and other countries.
(iii) Connectivity
Principal activities include the provision of telecommunications services, retail sales of telecommunications equipment and
accessories, development and operation of data centres and provision of logistics solutions. The segment has operations in
China, Singapore and other countries. Keppel Logistics (“KLOG”) contributed about 1% and 2% of the Group’s total revenue and
net profit respectively for the financial year ended 31 December 2021. KLOG accounted for about 1% of the Group’s total assets
and total liabilities as at 31 December 2021.
(iv) Asset Management
Principal activities include management of private funds and listed real estate investment and business trusts. The segment
operates mainly in Singapore.
(v) Corporate & Others
The Corporate & Others segment consists mainly of treasury operations, research & development, investment holdings and
provision of management and other support services.
Management monitors the results of each of the above main segments for the purpose of making decisions about resource allocation
and performance assessment. Segment performance is evaluated based on net profit or loss. Information regarding the Group’s
reportable operating segments is presented in the following table.
Keppel Corporation Limited
FINANCIAL REPORT
Energy & Environment
Infrastructure
& Others
$’000
Offshore
& Marine
$’000
Asset
Subtotal Development Connectivity Management
$’000
Urban
$’000
$’000
$’000
203
Corporate &
Others
$’000
Elimination
$’000
Total
$’000
2021
Revenue
External sales
Inter-segment sales
Total
Segment Results
Operating profit
Investment income
Interest income
Interest expenses
Share of results of
associated companies
and joint ventures
Profit before tax
Taxation
Profit for the year
Attributable to:
Shareholders of Company
Perpetual securities holders
Non-controlling interests
External revenue from contracts
with customers
- At a point in time
- Over time
Other sources of revenue
Total
Other Information
Segment assets
Segment liabilities
Net assets
Investment in associated companies
and joint ventures
Additions to non-current assets
Depreciation and amortisation
Impairment loss on non-financial
assets
Allowance for expected credit loss
and bad debt written-off
Loss on a financial guarantee on
a loan granted to an
associated company
Geographical information
2,013,377
(110)
2,013,267
3,560,370
13,986
3,574,356
5,573,747
13,876
5,587,623
1,628,768
3,789
1,632,557
1,260,152
6,046
1,266,198
162,046
9,868
171,914
-
74,072
74,072
-
8,624,713
-
(107,651)
(107,651) 8,624,713
(229,939)
6,091
23,395
(178,626)
(292,288)
-
59,064
(9,025)
(522,227)
6,091
82,459
(187,651)
992,963
1,512
36,797
(52,342)
86,488
270
304
(19,094)
112,880
41,632
147
(30,752)
222,950
61,447
366,147
(331,925)
4,737
-
(375,480)
370,743
897,791
110,952
110,374
(251,021)
168,328
(210,751)
49,369
(161,382)
(15,743)
(257,992)
4,603
(253,389)
93,170
152,585
(468,743) 1,072,100
(331,263)
740,837
53,972
(414,771)
18,528
86,496
(18,567)
67,929
202,617
326,524
(26,188)
300,336
-
318,619
(2,938)
315,681
(160,394)
-
(988)
(161,382)
(253,451)
-
62
(253,389)
(413,845)
-
(926)
(414,771)
762,915
-
(22,078)
740,837
63,953
-
3,976
67,929
301,296
-
(960)
300,336
308,332
3,401
3,948
315,681
94,392
1,918,985
2,013,377
-
2,013,377
12,324
3,548,046
3,560,370
-
3,560,370
106,716
5,467,031
5,573,747
-
5,573,747
1,376,396
181,183
1,557,579
71,189
1,628,768
423,065
833,360
1,256,425
3,727
1,260,152
23,936
138,110
162,046
-
162,046
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
466,900
1,334,996
(324,984)
1,010,012
1,022,651
3,401
(16,040)
1,010,012
1,930,113
6,619,684
8,549,797
74,916
8,624,713
8,596,939
9,473,919
(876,980)
2,769,124 11,366,063 13,954,820
6,955,468
2,455,766 11,929,685
(563,622) 6,999,352
313,358
3,606,910
2,525,065
1,081,845
3,989,870 12,321,120 (12,915,856) 32,322,927
9,679,116 (12,915,856) 19,881,566
1,708,088
- 12,441,361
2,642,004
2,281,782
462,678
24,403
115,104
164,170
38,595
31,364
626,848
62,998
146,468
2,281,122
274,447
42,564
151,162
270,856
201,430
2,991,126
113,237
2,796
-
6,698
13,144
33,831
58,294
92,125
53,051
1,586
66,325
115,867
182,192
1,346
11,781
-
146,024
146,024
-
-
-
-
-
-
(132)
-
-
-
-
-
-
-
6,050,258
728,236
406,402
146,762
195,187
146,024
Singapore
$’000
6,458,200
7,928,820
China/
Hong Kong
$’000
1,543,465
3,922,600
Other Far East
& ASEAN
countries
$’000
222,502
1,803,975
Brazil
$’000
73,795
160,951
Other
countries
$’000
326,751
653,202
Elimination
$’000
Total
$’000
-
-
8,624,713
14,469,548
External sales
Non-current assets
Other than Singapore and China, no single country accounted for 10% or more of the Group’s revenue for the financial year ended 31
December 2021.
Information about a major customer
Revenue of $1,600,705,000 is derived from a single external customer and is attributable to the Energy & Environment segment for the
financial year ended 31 December 2021.
Note: Pricing of inter-segment goods and services is at fair market value.
Annual Report 2021
204
NOTES TO THE FINANCIAL STATEMENTS
Shareholders of Company
(1,274,847)
94,178
(1,180,669)
437,796
13,244
279,525
(55,756)
Non-controlling interests
(4,547)
(216)
(4,763)
3,362
1,461
(2,043)
(251)
(1,279,394)
93,962
(1,185,432)
441,158
14,705
277,482
(56,007)
Energy & Environment
Infrastructure
& Others
$’000
Offshore
& Marine
$’000
Asset
Subtotal Development Connectivity Management
$’000
Urban
$’000
$’000
$’000
Corporate &
Others
$’000
Elimination
$’000
Total
$’000
1,573,455
2,369,889
3,943,344
1,275,473
1,220,011
134,784
526
10,335
10,861
9,407
5,280
295
1,573,981
2,380,224
3,954,205
1,284,880
1,225,291
135,079
730
76,422
77,152
-
6,574,342
(102,265)
-
(102,265) 6,574,342
(909,633)
87,263
(822,370)
605,488
46,010
273,601
(93,891)
3,449
60,429
-
3,449
61,414
121,843
1,035
39,518
175
1,972
23,273
1,414
6,001
393,668
(400,949)
162,053
(196,885)
(9,859)
(206,744)
(56,055)
(33,224)
(39,700)
(357,929)
401,386
(292,266)
(437)
-
8,401
29,346
(330,421)
(16,594)
(347,015)
129,917
(1,373,061)
122,224
(1,250,837)
719,903
13,689
28,622
40,476
712
303,651
(56,026)
93,667
(28,262)
65,405
(278,745)
(13,917)
(26,169)
19
(1,279,394)
93,962
(1,185,432)
441,158
14,705
277,482
(56,007)
112,699
10,644
123,343
1,032,449
1,460,756
2,359,245
3,820,001
159,962
380,812
829,570
1,573,455
2,369,889
3,943,344
1,192,411
1,210,382
-
-
-
83,062
9,629
12,388
122,396
134,784
-
1,573,455
2,369,889
3,943,344
1,275,473
1,220,011
134,784
100
-
100
630
730
8,777,983
2,484,217 11,262,200 14,516,978
4,020,059
3,974,802 11,359,061
(13,027,221) 32,105,879
9,436,503
1,960,318 11,396,821
7,956,375
2,819,371
1,868,694
9,935,935
(13,027,221) 20,949,975
(658,520)
523,899
(134,621) 6,560,603
1,200,688
2,106,108
1,423,126
- 11,155,904
360,838
205,170
566,008
2,300,945
203,330
2,920,330
61,835
119,566
91,090
31,312
152,925
150,878
537,537
39,461
156,757
213,461
384,483
2,655
521,411
42,225
563,636
9,184
27,853
(8,487)
186,818
1,385
188,203
22,902
9,153
-
-
1,397
7,051
(81)
(18)
-
-
-
-
-
5,990,613
1,233,099
413,506
592,105
220,240
-
-
-
-
-
-
-
-
-
-
-
-
(162,221)
(254,687)
(253,407)
(508,094)
(505,860)
(2,234)
(508,094)
1,549,092
4,931,929
6,481,021
93,321
6,574,342
2020
Revenue
External sales
Inter-segment sales
Total
Segment Results
Operating profit
Investment income
Interest income
Interest expenses
Share of results of
associated companies and
joint ventures
Profit before tax
Taxation
Profit for the year
Attributable to:
External revenue from contracts
with customers
- At a point in time
- Over time
Other sources of revenue
Total
Other Information
Segment assets
Segment liabilities
Net assets
Investment in associated companies
and joint ventures
Additions to non-current assets
Depreciation and amortisation
Impairment loss/(write-back of
impairment loss) on
non-financial assets
Allowance for expected credit loss
and bad debt written-off
Geographical information
Singapore
$’000
4,563,849
8,400,031
China/
Hong Kong
$’000
1,161,182
3,660,816
Other Far East
& ASEAN
countries
$’000
258,109
1,878,137
Brazil
$’000
47,252
240,893
Other
countries
$’000
543,950
392,094
Elimination
$’000
Total
$’000
-
-
6,574,342
14,571,971
External sales
Non-current assets
Other than Singapore and China, no single country accounted for 10% or more of the Group’s revenue for the financial year ended
31 December 2020.
Information about a major customer
No single external customer accounted for 10% or more of the Group’s revenue for the financial year ended 31 December 2020.
Note: Pricing of inter-segment goods and services is at fair market value.
Keppel Corporation Limited
FINANCIAL REPORT
205
37. Assets classified as held for sale and liabilities directly associated with assets classified as held for sale
(i)
Keppel Smit Towage Private Limited (“KST”) and Maju Maritime Pte Ltd (“Maju”)
On 15 November 2021, the Company announced that its indirect wholly-owned subsidiary, KS Investments Pte. Ltd., is divesting
its entire 51% shareholding interest in each of KST and Maju to Rimorchiatori Mediterranei Spa. Completion of the divestments,
which is expected to take place in the first half of 2022, is conditional upon the receipt of approval from regulatory authorities in
Singapore.
(ii) Subsidiary of Keppel Infrastructure Holdings Pte Ltd (“Keppel Infrastructure’s subsidiary”)
The Company’s wholly-owned subsidiary, Keppel Infrastructure, has commenced non-binding negotiation with an interested
buyer relating to Keppel Infrastructure’s controlling interest in a subsidiary. The completion of the sale is subject to execution of
definitive documentation for the transaction and other conditions, including regulatory approval, being fulfilled.
(iii) Keppel Offshore and Marine Ltd’s properties (“Keppel O&M’s properties”)
The Company’s wholly-owned subsidiary, Keppel Offshore and Marine Ltd (“Keppel O&M”), is committed to sell five properties
(including its plant and equipment) in Singapore. The sale is expected to be completed within one year. The disposals are part of
Keppel O&M’s strategic review to streamline and dispose its non-core assets.
In accordance to SFRS(I) 5 Non-current Assets Held for Sale and Discontinued Operations, the assets and liabilities of Keppel
Infrastructure’s subsidiary and Keppel O&M’s properties have been presented separately as “assets classified as held for sale”
and “liabilities directly associated with assets classified as held for sale”, and the investments in KST and Maju that are accounted
for as associated companies and joint ventures have been presented as “assets classified as held for sale” in the condensed
consolidated balance sheet as at 31 December 2021. Details of the assets classified as held for sale and liabilities directly
associated with assets classified as held for sale are as follows:
Assets classified as held for sale
Fixed assets
Associated companies and joint ventures
Right-of-use assets
Long term assets
Debtors
Liabilities directly associated with assets classified as held for sale
Creditors
Derivative liabilities
Taxation
As at
31 December
2021
$’000
74,765
60,798
32,871
353,039
6,407
527,880
3,402
34,855
73
38,330
The assets and liabilities classified as held for sale pertaining to KST, Maju, Keppel Infrastructure’s subsidiary and Keppel O&M’s
properties are included in Energy & Environment for the purpose of segmental reporting.
Annual Report 2021
206
NOTES TO THE FINANCIAL STATEMENTS
38. New accounting standards and interpretations
At the date of authorisation of these financial statements, the following new/revised SFRS(I)s, SFRS(I) Interpretations and amendments
to SFRS(I)s that are relevant to the Group and the Company were issued but not effective:
•
Amendments to SFRS(I) 1-16 Property, Plant and Equipment - Proceeds before Intended Use (effective for annual periods
beginning on or after 1 January 2022)
The amendment to SFRS(I) 1-16 Property, Plant and Equipment (PP&E) prohibits an entity from deducting from the cost of an
item of PP&E any proceeds received from selling items produced while the entity is preparing the asset for its intended use.
It also clarifies that an entity is ‘testing whether the asset is functioning properly’ when it assesses the technical and physical
performance of the asset. The financial performance of the asset is not relevant to this assessment.
Entities must disclose separately the amounts of proceeds and costs relating to items produced that are not an output of the
entity’s ordinary activities.
•
Amendments to SFRS(I) 1-37 Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts - Cost of Fulfilling a
Contract (effective for annual periods beginning on or after 1 January 2022)
An onerous contract is a contract in which the unavoidable costs of meeting the obligations under the contract exceed the
economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting
from the contract, which is the lower of the costs of fulfilling it and any compensation or penalties arising from failure to fulfil it.
The amendment to SFRS(I) 1-37 clarifies that the direct costs of fulfilling a contract include both the incremental costs of fulfilling
the contract and an allocation of other costs directly related to fulfilling contracts.
•
Amendments to SFRS(I) 1-1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current (effective
for annual periods beginning on or after 1 January 2023)
The narrow-scope amendments to SFRS(I) 1-1 Presentation of Financial Statements clarify that liabilities are classified as
either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected
by the expectations of the entity or events after the reporting date (e.g. the receipt of a waiver or a breach of covenant). The
amendments also clarify what SFRS(I) 1-1 means when it refers to the ‘settlement’ of a liability.
The amendments could affect the classification of liabilities, particularly for entities that previously considered management’s
intentions to determine classification and for some liabilities that can be converted into equity.
The management anticipates that the adoption of the above SFRS(I)s, SFRS(I) Interpretations and amendments to SFRS(I)s 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.
39. Subsequent events
On 27 January 2022, the Company established a $500 million Share Buyback Programme, pursuant to the Share Purchase Mandate
granted by its shareholders at the Company’s Annual General Meeting. The Share Buyback Programme allows the Company to
purchase its shares when such shares may be undervalued due to market conditions. Shares repurchased will be held as treasury
shares which will be used in part for the annual vesting of employee share plans, and as possible currency for future merger and
acquisition (M&A) activities under Vision 2030.
The Company’s Share Purchase Mandate, as approved by shareholders at the last Annual General Meeting in April 2021, allows the
purchase of up to a maximum of 2% of its issued shares for the duration of the mandate. The duration required to complete the $500
million Share Buyback Programme will depend on the annual review and parameters of the Share Purchase Mandate as approved by
shareholders, and the prices at which the shares are purchased.
40. Significant subsidiaries, associated companies and joint ventures
Information relating to significant subsidiaries consolidated in these financial statements and significant associated companies and
joint ventures whose results are equity accounted for is given in the following pages.
Keppel Corporation Limited
FINANCIAL REPORT
SIGNIFICANT SUBSIDIARIES, ASSOCIATED COMPANIES
AND JOINT VENTURES
207
Gross
Interest
2021
%
Effective Equity
Interest
Cost of Investment
2021
%
2020
%
2021
$’000
2020
$’000
Country of
Incorporation
/Operation
Principal Activities
ENERGY & ENVIRONMENT
Offshore & Marine
Subsidiaries
Keppel Offshore and Marine Ltd
Keppel FELS Ltd
100
100
100
100
100
100
Angra Propriedades &
Administracao Ltda(1)
Estaleiro BrasFELS Ltda(1)
FELS Offshore Pte Ltd
Fernvale Pte Ltd
FSTP Brasil Ltda(1)
FSTP Pte Ltd
Guanabara Navegacao LTDA(1)
Keppel AmFELS, Inc(1)
100
100
100
100
75
75
100
100
100
100
100
100
75
75
100
100
100
100
100
100
75
75
100
100
Keppel FELS Brasil SA(1)
100
100
100
Keppel Letourneau USA, Inc(1)
Keppel Offshore & Marine USA
Inc(1)
KV Enterprises BV(2)
KVE Adminstradora de Bens
Imoveis Ltda(1)
PT Bintan Offshore(2)
Bintan Offshore Fabricators(1)
100
100
100
100
99
60
100
100
100
100
60
60
100
100
100
100
60
60
Offshore Partners Pte Ltd
100
100
100
Regency Steel Japan Ltd(1)
FELS Asset Co Pte Ltd
FELS Asset Co 2 Pte Ltd
Offshore Partners 2 Pte Ltd
Lenity Pioneer Pte Ltd
51
100
100
100
100
51
100
100
100
100
51
100
100
100
100
801,720
801,720 Singapore
Investment holding
#
# Singapore
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
Construction, fabrication and
repair of offshore production
facilities and drilling rigs, power
barges, specialised vessels and
other offshore production
facilities
Holding of long-term investments
and property management
Engineering, construction and
fabrication of platforms for the oil
and gas sector, shipyard works
and other general business
activities
# Brazil
# Brazil
# Singapore
Holding of long-term investments
# Singapore
# Brazil
Construction, fabrication and
repair of drilling rigs and offshore
production facilities
Procurement of equipment and
materials for the construction of
offshore production facilities
# Singapore
Project management, engineering
and procurement
# Brazil
Ship owning
# USA
# Brazil
# USA
# USA
Construction and repair of
offshore drilling rigs and offshore
production facilities
Engineering, construction and
fabrication of platforms for the oil
and gas industry
Design and license of various
offshore rigs and platforms
Offshore and marine-related
services
# Netherlands Holding of long-term investments
# Brazil
Holding of long-term investments
and property management
#
Indonesia
# Singapore
# Singapore
Offshore engineering and
construction
Offshore engineering and
construction business
Arrange, syndicate and/or provide
financing to customers of Keppel
Group
# Japan
Sourcing, fabricating and supply
of specialised steel components
# Singapore
Chartering of ships, barges and
boats with crew
# Singapore
Chartering of ships, barges and
boats with crew
# Singapore
Chartering of ships, barges and
boats with crew
# Singapore
Service activities related to oil
and gas extraction
Annual Report 2021
FINANCIAL REPORT
208
SIGNIFICANT SUBSIDIARIES, ASSOCIATED COMPANIES
AND JOINT VENTURES
Keppel Shipyard Ltd
Keppel Philippines Marine Inc(1)
Keppel Nantong Heavy Industry
Co Ltd(1)
Keppel Nantong Shipyard
Company Ltd(1)
Keppel Subic Shipyard Inc(1)
KS Investments Pte Ltd
Associated Companies and
Joint Ventures
Asian Lift Pte Ltd
Floatel International Ltd(1)
Blue Tern Holding AS(2)
Arab Heavy Industries PJSC(2)
Nakilat - Keppel Offshore &
Marine Ltd(2)
PV Keez Pte Ltd(2)
Keppel Smit Towage Pte Ltd
Maju Maritime Pte Ltd
FueLNG Pte Ltd(2)
Infrastructure & Others
Subsidiaries
Keppel Infrastructure Holdings
Pte Ltd
Keppel Energy Pte Ltd
Keppel Electric Pte Ltd
Keppel Gas Pte Ltd
Keppel DHCS Pte Ltd
Gross
Interest
2021
%
100
99
100
100
87+
100
50
50
49
33
20
20
51
51
50
100
100
100
100
100
Effective Equity
Interest
2021
%
100
99
100
100
86+
100
50
50
49
33
20
20
51
51
50
100
100
100
100
100
100
100
100
100
Keppel Seghers Pte Ltd
100
100
100
Keppel Seghers Holdings BV(3)
Keppel Seghers Belgium NV(1)
Keppel Seghers Hong Kong Ltd(1)
Keppel Seghers UK Ltd(2)
Marina East Water Pte Ltd
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Keppel Corporation Limited
Country of
Incorporation
/Operation
Principal Activities
Cost of Investment
2021
$’000
2020
$’000
#
#
#
#
# Singapore
Ship repairing, shipbuilding and
conversions
# Philippines
Shipbuilding and repairing
# China
# China
Engineering and construction of
specialised vessels
Engineering and construction of
specialised vessels
3,020
3,020 Philippines
Shipbuilding and repairing
#
#
#
#
#
#
#
#
#
#
# Singapore
Holding of long-term investments
# Singapore
Provision of heavy-lift equipment
and related services
# Bermuda
Operating accommodation and
construction support vessels
(floatels) for the offshore oil and
gas industry
# Norway
Owning and leasing of multi-
purpose self-elevating platforms
# UAE
Shipbuilding and repairing
# Qatar
Ship repairing
# Singapore
Chartering of ships, barges and
boats with crew
# Singapore
Provision of towage services
# Singapore
Provision of towage services
# Singapore
Provide end-to-end LNG
bunkering supply solution
2020
%
100
98
100
100
86+
100
50
50
49
33
20
20
51
51
50
100
445,892
445,892 Singapore
Investment holding
#
#
#
#
#
#
#
#
#
#
# Singapore
Investment holding
# Singapore
Electricity, energy and power
supply and general wholesale
trade
# Singapore
Purchase and sale of gaseous
fuels
# Singapore
# Singapore
Development of district heating
and cooling system for the
purpose of air cooling and other
utility services
Provision of environmental,
technologies, engineering works
& construction activities
# Netherlands
Investment holding
# Belgium
Provider of services and solutions
to the environmental industry
related to solid waste treatment
# Hong Kong
Investment holding
# United
Kingdom
Design and construction of
waste-to-energy plants
# Singapore
Design and construction of
desalination plant
FINANCIAL REPORT
209
Keppel Seghers Engineering
Singapore Pte Ltd
Keppel Integrated Engineering
Ltd
Keppel New Energy Pte. Ltd.
(formerly known as XTE
Investments Pte. Ltd.)
Kepinvest Holdings Pte Ltd
Kepinvest Singapore Pte Ltd
Associated Companies and
Joint Ventures
Keppel Merlimau Cogen Pte Ltd(2)
MET Holding AG(1)
Tianjin Eco-City Energy
Investment & Construction
Co Ltd(2)
URBAN DEVELOPMENT
Subsidiaries
Keppel Land Ltd
Keppel Land China Ltd
Keppel Land Estate Pte Ltd
Keppel Bay Pte Ltd
Gross
Interest
2021
%
100
100
100
100
100
49
20
20
100
100
100
100
Effective Equity
Interest
2021
%
100
100
100
100
100
49
20
20
100
100
100
100
2020
%
100
100
100
100
100
49
20
20
Country of
Incorporation
/Operation
Principal Activities
Cost of Investment
2021
$’000
2020
$’000
#
#
#
# Singapore
Engineering works, construction
and O&M of plants and facilities
# Singapore
Investment holding
# Singapore
Investment holding
10
10 Singapore
Investment holding
18,425
18,425 Singapore
Investment holding
#
#
#
# Singapore
Commercial power generation
# Switzerland
Integrated energy company
# China
Investment and implementation
of energy and utilities related
infrastructure
100
4,793,367
4,793,367 Singapore
Holding, management and
investment company
100
100
100
#
#
#
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Property development
Keppel Philippines Properties
87+
87+
87+
493
493 Philippines
Property development
Inc(1)
Bellenden Investments Ltd(3)
Broad Elite Investments Ltd(3)
Cesario Pte Ltd
Changzhou Fushi Housing
Development Pte Ltd(1)
Chengdu Hillstreet Development
Co Ltd(1)
Corredance Pte Ltd
Dattson Pte Ltd
Davinelle Ltd(3)
DC REIT Holdings Pte Ltd
Domenico Pte Ltd
Double Peak Holdings Ltd(3)
Estella JV Co Ltd(1)
Eternal Commercial Ltd(1)
Elaenia Pte Ltd
Evergro Properties Ltd
Floraville Estate Pte Ltd
Greenfield Development Pte Ltd
Hillwest Pte Ltd
Harvestland Development Pte Ltd
67
100
100
100
100
100
100
67
100
100
100
98
100
100
100
100
100
100
100
67
100
100
100
100
100
100
67
100
100
100
98
100
100
100
100
100
100
100
67
100
100
100
100
100
100
67
100
100
100
98
100
100
100
100
100
100
100
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
# BVI
# BVI
Investment holding
Investment holding
# Singapore
Investment holding
# China
Property development
# China
Property development
# Singapore
Investment holding
# Singapore
Investment holding
# BVI
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
# BVI
Investment holding
# Vietnam
Property development and
investment
# HK
Investment holding
# Singapore
Investment holding
# Singapore
Property investment and
development
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Property development
Annual Report 2021
210
SIGNIFICANT SUBSIDIARIES, ASSOCIATED COMPANIES
AND JOINT VENTURES
Effective Equity
Interest
Cost of Investment
Country of
Incorporation
/Operation
Principal Activities
2020
%
100
2021
$’000
#
2020
$’000
# Singapore
Property development
100+
122,785
122,785 Singapore
Investment holding
Gross
Interest
2021
%
100
100+
100
100
100
100
100
100
100
2021
%
100
100+
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
100
84
84
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
100
84
84
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
100
84
84
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Straits Properties Ltd
Keppel Point Pte Ltd
Jencity Ltd(3)
K-Commercial Pte Ltd
Katong Retail Trust
Kapler Pte Ltd
KeplandeHub Ltd
Keppel Heights (Wuxi) Property
Development Co Ltd(1)
Keppel Hong Da (Tianjin Eco-City)
Property Development
Co Ltd(1)
Keppel Hong Yuan
(Tianjin Eco-City) Property
Development Co Ltd(1)
Keppel Hong Xiang Management
Consultancy (Shanghai)
Co Ltd(1)
Keppel Lakefront (Wuxi) Property
Development Co Ltd(1)
Keppel Land (Saigon Centre)
Ltd(1)
Keppel Land (Singapore) Pte Ltd
Keppel Land Financial Services
Pte Ltd
Keppel Puravankara Dev Pvt Ltd(2)
Keppel Land International
(Management) Pte Ltd
Keppel Land Watco IV Co Ltd(1)
Keppel Land Watco V Co Ltd(1)
Keppel Land Vietnam Co Ltd(1)
Keppel Seasons Residences
Property Development (Wuxi)
Co., Ltd(1)
Keppel Tianjin Eco-City Holdings
Pte Ltd
Keppel Tianjin Eco-City
Investments Pte Ltd
Keppel Tianjin Eco-City Three
Pte Ltd
Keppel Tianjin Eco-City Two
Pte Ltd
Tosalco Pte Ltd
Krystal Investments Pte Ltd
Joysville Investment Pte Ltd
Main Full Ltd(1)
Mansfield Developments Pte Ltd
Merryfield Investment Pte Ltd
Oceansky Pte Ltd
Ocean & Capital Properties
Pte Ltd
Keppel Corporation Limited
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
# BVI
Investment holding
# Singapore
Property development/
investment
# Singapore
Investment trust
# Singapore
Investment holding
# Singapore
Investment holding
# China
Property development
# China
Property development
# China
Property development
# China
Property services
# China
Property development
# HK
Investment holding
# Singapore
Investment holding
# Singapore
Financial services
#
India
Property development
# Singapore
Property services
# Vietnam
Property development
# Vietnam
Property development
# Vietnam
Property services
# China
Property development
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
# HK
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
FINANCIAL REPORT
211
OIL (Asia) Pte Ltd
Oscario Pte Ltd
Parksville Development Pte Ltd
Pasir Panjang Realty Pte Ltd
Peplamo Pte Ltd
Pembury Properties Ltd(3)
Pisamir Pte Ltd
Portsville Pte Ltd
Pre-1 Investments Pte Ltd
PT Harapan Global Niaga(1)
PT Kepland Investama(1)
PT Puri Land Development(1)
PT Sukses Manis Indonesia(1)
PT Sukses Manis Tangguh(1)
Primus I Investment Holdings
Pte Ltd
Primus II Investment Holdings
Pte Ltd
Riviera Point LLC(1)
Saigon Centre Investment Ltd(3)
Saigon Sports City Ltd(1)
Taicang Xinwu Business
Consulting Co Ltd(1)
Beijing Changsheng Consultant
Co Ltd(1)
Beijing Changsheng Property
Management Co Ltd(1)
Shanghai Floraville Land Co Ltd(1)
Shanghai Hongda Property
Development Co Ltd(1)
Shanghai Ji Lu Land Co Ltd(1)
Shanghai Ji Xiang Land Co Ltd(1)
Shanghai Jinju Real Estate
Development Co Ltd(1)
Shanghai Maowei Investment
Consulting Co Ltd(1)
Shanghai Merryfield Land
Co Ltd(1)
Shanghai Pasir Panjang Land
Co Ltd(1)
Spring City Golf & Lake Resort
Co Ltd(1)
Spring City Resort Pte Ltd
Straits Greenfield Ltd(2)
Straits Property Investments
Pte Ltd
Keppel Group Eco-City
Investments Pte Ltd
Singapore Tianjin Eco-City
Investment Holdings Pte Ltd
Gross
Interest
2021
%
Effective Equity
Interest
Cost of Investment
2021
%
2020
%
2021
$’000
2020
$’000
Country of
Incorporation
/Operation
Principal Activities
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
99
100
100
100
100
100
99
99
80
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
99
99
99
100
99
99
99
99
69
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
75
100
100
100
100
100
99
99
99
100
99
99
99
99
69
100
100
100
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Property development
# Singapore
Investment holding
# Singapore
Investment holding
# BVI
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
#
#
#
#
#
Indonesia
Property development
Indonesia
Property investment
Indonesia
Property development
Indonesia
Property development
Indonesia
Property development
# Singapore
Investment holding
# Singapore
Investment holding
# Vietnam
Property development
# BVI
Investment holding
# Vietnam
Property development
# China
Investment holding
# China
Property investment
# China
Property investment
# China
# China
# China
# China
# China
Property investment
Property development
Property investment
Property development
Property development
# China
Investment holding
# China
Property development
# China
Property development
# China
Golf club operations and
development and property
development
# Singapore
Investment holding
# Myanmar
Hotel ownership and operations
# Singapore
Investment holding
100+
100+
100+
126,744
126,744 Singapore
Investment holding
90+
90+
90+
#
# Singapore
Investment holding
Annual Report 2021
212
SIGNIFICANT SUBSIDIARIES, ASSOCIATED COMPANIES
AND JOINT VENTURES
Gross
Interest
2021
%
100+
100
100
100
Effective Equity
Interest
2021
%
100+
100
100
100
2020
%
100+
100
100
100
35
30
40
40
25
60
49
61
61
61
39
8
25
60
30
33
40
50
42
25
15
30
30
30
35
30
40
40
25
60
49
61
61
61
39
8
25
60
30
33
40
45
42
25
15
30
30
30
35
30
40
40
25
60
49
61
61
61
39
10
25
60
30
33
40
45
42
25
15
30
30
30
Country of
Incorporation
/Operation
Principal Activities
Cost of Investment
2021
$’000
2020
$’000
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
# BVI
Investment holding
# China
Property development
# China
Property investment
# China
Property investment
# China
Property development
# China
Property development
# Myanmar
Property development
# Vietnam
Property development
# Singapore
Property management
# Singapore
Property development
#
India
# Vietnam
# Vietnam
# Vietnam
# Singapore
# Vietnam
Real estate construction and
development
Property investment and
development
Property investment and
development
Property investment and
development
Property investment and
development
Trading of development
properties
# China
Property development
# Vietnam
Property development
# Singapore
Investment holding
# Singapore
Property management
# Malaysia
Property investment
# China
Property development
# Vietnam
Property development
# Singapore
Investment holding
# China
Investment holding
# Vietnam
Property investment
# Singapore
Investment holding
# China
Investment holding
Substantial Enterprises Ltd(3)
Tianjin Fulong Property
Development Co Ltd(1)
China The9 Interactive
(Shanghai) Ltd(1)
The9 Computer Technology
Consulting (Shanghai) Ltd(1)
Associated Companies and
Joint Ventures
Chengdu Taixin Real Estate
Development Co Ltd(2)
Chengdu Wanji Real Estate
Development Co Ltd(2)
City Square Office Co Ltd(2)
Empire City LLC(2)
EM Services Pte Ltd
Garden Development Pte Ltd
Kapstone Construction Private
Limited(1)
Keppel Land Watco I Co Ltd(1)
Keppel Land Watco II Co Ltd(1)
Keppel Land Watco III Co Ltd(1)
Harbourfront Three Pte Ltd
Nam Long Investment
Corporation(2)
Nanjing Zhijun Property
Development Co Ltd(2)
Nha Be Real Estate JSC(1)
North Bund Pte Ltd(2)
Raffles Quay Asset Management
Pte Ltd(2)
Renown Property Holdings (M)
Sdn Bhd(1)
Sino-Singapore Tianjin Eco-City
Investment and Development
Co., Ltd(1)
South Rach Chiec LLC(1)
Suzhou Property Development
Pte Ltd(2)
Taicang Zhuchong Business
Consulting Co Ltd(2)
Vietcombank Tower 198 Ltd(2)
Vision (III) Pte Ltd(2)
Win Up Investment Ltd(2)
Keppel Corporation Limited
FINANCIAL REPORT
213
Gross
Interest
2021
%
Effective Equity
Interest
Cost of Investment
2021
%
2020
%
2021
$’000
2020
$’000
Country of
Incorporation
/Operation
Principal Activities
100
621,299
621,299 Singapore
Investment, management and
holding company
CONNECTIVITY
Subsidiaries
Keppel Telecommunications &
Transportation Ltd
Keppel Logistics Pte Ltd
Keppel Wanjiang International
Coldchain Logistics Park
(Anhui) Co Ltd(2)
Keppel Data Centres Pte Ltd
Keppel Data Centres Holding
Pte Ltd
100
100
60
100
100+
100
100
60
100
100+
100
60
100
100+
Keppel Communications Pte Ltd
100
100
100
Keppel Telecoms Pte Ltd
Keppel Konnect Pte Ltd
Konnectivity Pte Ltd
Apsilon Ventures Pte Ltd
M1 Limited
M1 Net Ltd
100
100
80
100
100+
100+
100
100
80
100
84+
84+
100
100
80
100
84+
84+
AsiaPac Technology Pte. Ltd.
100+
84+
84+
Associated Companies and
Joint Ventures
Asia Airfreight Terminal(2)
Computer Generated Solutions
Inc(2)
M1 Network Private Limited(n)
SVOA Public Company Ltd(2)
ASSET MANAGEMENT
Subsidiaries
Keppel Capital Holdings Pte Ltd
Keppel Capital Investment
Holdings Pte Ltd
Alpha Investment Partners Ltd
Keppel DC REIT Management
Pte Ltd
Keppel Capital Three Pte Ltd
Keppel Capital US Holding Inc(3)
Keppel REIT Management Ltd
Aintree Assets Ltd(3)
Keppel REIT Investment Pte Ltd
Keppel DC Investment Holdings
Pte Ltd
10
21
50+
32
100
100
100
100+
100
100
100
100
100
100
Keppel Funds Investment Pte Ltd
100
10
21
42+
32
100
100
100
100+
100
100
100
100
100
100
100
10
21
-
32
100
100
100
100+
100
100
100
100
100
100
100
#
#
#
#
#
#
1
#
#
#
#
#
#
#
#
#
# Singapore
Integrated logistics services and
supply chain solutions
# China
Integrated logistics services,
food trading hub, warehousing
and distribution
# Singapore
Investment holding
# Singapore
Investment holding and
management services
# Singapore
Trading and provision of
communications systems and
accessories
# Singapore
Investment holding
1 Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Telecommunications services
# Singapore
Provision of fixed and other
related telecommunication
services
# Singapore
ICT Solutions Provider
# HK
# USA
Operation of an air cargo
handling terminal
IT consulting and outsourcing
provider
# Singapore
Telecommunications services
# Thailand
Distribution of IT products and
telecommunications services
783,000
783,000 Singapore
Investment holding
#
#
#
#
#
#
#
#
#
#
# Singapore
Investment holding
# Singapore
Fund management
# Singapore
Real estate investment trust
management and investment
holding
# Singapore
Investment holding
# USA
Investment holding
# Singapore
Investment advisory and property
fund management
# BVI
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Investment holding
Annual Report 2021
214
SIGNIFICANT SUBSIDIARIES, ASSOCIATED COMPANIES
AND JOINT VENTURES
Gross
Interest
2021
%
Effective Equity
Interest
Cost of Investment
2021
%
2020
%
2021
$’000
2020
$’000
Country of
Incorporation
/Operation
Principal Activities
Associated Companies and
Joint Ventures
Keppel DC REIT
Keppel REIT
Keppel Pacific Oak US REIT(2)
CORPORATE & OTHERS
Subsidiaries
Kephinance Investment Pte Ltd
Keppel Capital One Pte Ltd
Keppel Investment Ltd
Keppel Ventures (Property)
Pte Ltd
Keppel Oil & Gas Pte Ltd
Kepventure Pte Ltd
Total Subsidiaries
20
47+
7
100
100
100
100
100
100
20
47+
7
100
100
100
100
100
100
21
49+
7
100
100
100
100
100
100
#
#
#
# Singapore
Data centre facilities and
colocation services
# Singapore
Real estate investment trust
# Singapore
Real estate investment trust
90,000
90,000 Singapore
Investment holding
#
#
#
#
# Singapore
To arrange, syndicate and/or
provide financing to customers of
Keppel Group
# Singapore
Investment company
# Singapore
Investment holding
# Singapore
Investment holding
594,922
594,922 Singapore
Investment holding
8,401,678
8,401,678
Notes:
(i) All the companies are audited by PricewaterhouseCoopers LLP, Singapore except for the following:
(1) Audited by PricewaterhouseCoopers firms outside Singapore;
(2) Audited by other firms of auditors; and
(3) 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 and joint ventures does not compromise the
standard and effectiveness of the audit of the Company.
+ The shareholdings of these companies are held jointly with other subsidiaries.
(ii)
(iii) # The shareholdings of these companies are held by subsidiaries of Keppel Corporation Limited.
(iv)
(v) The subsidiaries’ place of business is the same as its country of incorporation, unless otherwise specified.
(vii) Abbreviations:
(n) These companies were incorporated/acquired during the financial year.
British Virgin Islands (BVI)
Hong Kong (HK)
United Arab Emirates (UAE)
United States of America (USA)
(viii) The Company has 215 significant subsidiaries, associated companies and joint ventures as at 31 December 2021. Subsidiaries, associated companies and joint ventures
are considered as significant (a) in accordance to Rule 718 of The Singapore Exchange Securities Trading Limited – Listing Rules, or (b) by reference to the significance of
their economic activities.
Keppel Corporation Limited
FINANCIAL REPORT
INTERESTED PERSON TRANSACTIONS
215
The Group has obtained a general mandate from shareholders of the Company for interested person transactions in the Annual General
Meeting held on 23 April 2021. During the financial year, the following interested person transactions were entered into by the Group:
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)
2021
$’000
1,104
–
–
160,222
–
–
184
530
–
152
–
64
–
195
3
–
–
40
–
–
281
43,945
–
–
30
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)
2021
$’000
1,821
2,600
2,432
55,853
878
2,971
1,926
6,953
28,491
1,789
1,020
–
71,000
632
1,388
6,804
2,485
36,122
1,047
33,891
1,158
–
8,987
52
–
1,081
–
Name of Interested Person
Nature of relationship
Transaction for the Sale of Goods and Services
Temasek Holdings Group (other than the below)
CapitaLand Group
Clifford Capital Group
Keppel Infrastructure Trust Group
PSA International Group
SembCorp Marine Group
Singapore Technologies Engineering Group
Singapore Telecommunications Group
StarHub Group
Transaction for the Purchase of Goods and Services
Temasek Holdings Group (other than the below)
Clifford Capital Group
Keppel Infrastructure Trust Group
Lan Ting Holdings Group
PSA International Group
SembCorp Marine Group
Singapore Technologies Engineering Group
Singapore Technologies Telemedia Group
Singapore Telecommunications Group
SMRT Corporation Group
StarHub Group
Surbana Jurong Group
Treasury Transactions
Keppel Infrastructure Trust Group
Lan Ting Holdings Group
SembCorp Industries Group
SembCorp Marine Group
Joint Venture
Clifford Capital Group
Temasek Holdings
(Private) Limited is a
controlling shareholder
of the Company.
The other named
interested persons are
its associates.
Temasek Holdings
(Private) Limited is a
controlling shareholder
of the Company.
The other named
interested persons are
its associates.
Temasek Holdings
(Private) Limited is
a controlling
shareholder of the
Company. The named
interested persons
are its associates.
Temasek Holdings
(Private) Limited is
a controlling
shareholder of
the Company. The
other named
interested person
is its associate.
Total Interested Person Transactions
207,831
270,300
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.
Annual Report 2021
OTHER INFORMATION
216
KEY EXECUTIVES
Chan Hon Chew, 56
Bachelor of Accountancy (Honours), National University of Singapore; CFA® charterholder; Member of Chartered Accountants Australia and
New Zealand and Fellow Member of the Institute of the Singapore Chartered Accountants.
Mr Chan is the Chief Financial Officer of Keppel Corporation Limited, appointed with effect from 1 February 2014.
Prior to joining Keppel Corporation, Mr Chan was with Singapore Airlines Limited (SIA) and served as Senior Vice President (SVP) of Finance
since June 2006. As SVP of Finance, Mr Chan was responsible for a diverse range of functions including investor relations, corporate
accounting and reporting, treasury, risk management and insurance. He was also involved in SIA’s strategic planning process and had
represented SIA as Director on the Boards of various companies including Tiger Airways and Virgin Atlantic Airways Limited.
Prior to joining SIA, Mr Chan was Assistant General Manager for Finance and Corporate Services at Wing Tai Holdings Limited, where he
oversaw all financial matters as well as tax, legal and corporate secretarial functions from 1998 to 2003.
Mr Chan was appointed as a member of the Accounting Advisory Board of National University of Singapore Business School since 1 May 2021.
Mr Chan’s principal directorships include Keppel Offshore & Marine Ltd, Keppel Land Limited, Keppel Infrastructure Holdings Pte Ltd, Keppel
Telecommunications & Transportation Ltd, Keppel Capital Holdings Pte Ltd and M1 Limited.
Past principal directorships in the last five years
KrisEnergy Ltd and Keppel DC REIT Management Pte Ltd (the Manager of Keppel DC REIT).
Christina Tan Hua Mui, 56
Bachelor of Accountancy (Honours), National University of Singapore; CFA® charterholder.
Ms Tan is the Chief Executive Officer of Keppel Capital Holdings Pte Ltd (Keppel Capital), Chairman of Keppel DC REIT Management Pte Ltd
(the Manager of Keppel DC REIT) and Deputy Chairman of Alpha Investment Partners Limited (Alpha).
Ms Tan has more than 20 years of experience and expertise in investing and fund management across the United States, Europe and Asia.
She previously served as the Chief Financial Officer of GRA (Singapore) Private Limited, the Asian real estate fund management arm of the
Prudential Insurance Company of America, managing more than US$1 billion in real estate funds. Prior to that, she was the Treasury Manager
with Chartered Industries of Singapore, managing the group’s cash positions and investments. Ms Tan started her career with Ernst & Young
before joining the Government of Singapore Investment Corporation.
Ms Tan’s principal directorships include Keppel Capital, Keppel REIT Management Limited (the Manager of Keppel REIT), Keppel DC REIT
Management Pte Ltd (the Manager of Keppel DC REIT), Keppel Infrastructure Fund Management Pte Ltd (the Trustee-Manager of Keppel
Infrastructure Trust) and the two private fund managers under Keppel Capital, being Alpha and Keppel Capital Alternative Asset Pte Ltd
(KCAA). She also sits on the Investment Committees for the private funds managed by Alpha and KCAA.
Past principal directorships in the last five years
Nil
Chris Ong Leng Yeow, 47
Master and Bachelor of Electrical and Electronics Engineering, National University of Singapore.
Mr Ong is the Chief Executive Officer of Keppel Offshore & Marine Ltd (Keppel O&M) with effect from 1 July 2017. Prior to this appointment,
he was Acting Chief Executive Officer of Keppel O&M. Mr Ong’s career began in Keppel FELS in 1999 as a Commissioning Superintendent
(E&I) and he has held appointments such as Project Engineer, Section Manager, Deputy Engineering Manager, Assistant General Manager
(Engineering), General Manager (Engineering), Acting Executive Director (Operations), Executive Director (Commercial) and Managing Director
of Keppel FELS Limited.
In addition to his current appointment, Mr Ong is also board member of The Institute of Technical Education Board of Governors, and he has
been re-appointed as a board member of the Maritime and Port Authority of Singapore till 1 February 2024.
Mr Ong is a member of the American Bureau of Shipping; member of the Council of Stiftelsen Det Norske Veritas, DNV GL South East Asia and
Pacific Committee, as well as Bureau Veritas Asia-Australia Committee.
Mr Ong is the Chairman of Keppel Amfels INC, Asian Lift Pte Ltd, Keppel FELS Brasil S.A. and FueLNG Pte Ltd. He is also a director of various
subsidiaries or associated companies of Keppel O&M. He is also a Director of Keppel Technology and Innovation Pte Ltd, Keppel Renewable
Energy Pte Ltd, Keppel Infrastructure Holding Pte Ltd and Keppel Renewable Investments Pte. Ltd.
Past principal directorships in the last five years
Various subsidiaries and associated companies of Keppel O&M.
Keppel Corporation Limited
OTHER INFORMATION
217
Thomas Pang Thieng Hwi, 57
Bachelor of Arts (Engineering) and Master of Arts (Honorary Award), University of Cambridge.
Mr Pang is currently Chief Executive Officer of Keppel Telecommunications & Transportation Ltd (Keppel T&T), a position he held since July
2014. From June 2010 to June 2014, he was Chief Executive Officer of Keppel Infrastructure Fund Management Pte Ltd, the Trustee-Manager
of Keppel Infrastructure Trust (KIT).
Mr Pang joined Keppel Offshore & Marine Ltd (Keppel O&M) in 2002 as a Senior Manager (Merger Integration Office) to assist in the merger
and integration of Keppel FELS Limited and Keppel Shipyard Limited. He was promoted to General Manager (Corporate Development) in 2007
and oversaw the investment, mergers and acquisitions, as well as strategic planning of Keppel O&M. Prior to that, Mr Pang was an investment
manager with Vertex Management (United Kingdom) from 1998 to 2001. Mr Pang was also the Vice President (Central USA) of the Singapore
Tourism Board from 1995 to 1998, as well as the Assistant Head (Services Group, Enterprise Development Division) at the Economic
Development Board of Singapore from 1988 to 1995.
Mr Pang currently holds directorships in several subsidiaries, associates and joint venture companies of Keppel T&T. He is also a Director of
Keppel Capital Holdings Pte Ltd, Keppel DC REIT Management Pte Ltd (the Manager of Keppel DC REIT), Keppel Technology and Innovation
Pte Ltd and M1 Limited.
Past principal directorships in the last five years
Various subsidiaries and associated companies of Keppel T&T and Keppel DC REIT.
Manjot Singh Mann, 56
Master of Management Studies (Marketing and Sales Management), University of Bombay; Bachelor of Engineering (Mechanical Engineering),
University of Jabalpur.
Mr Mann assumed the Chief Executive Officer role at M1 Limited (M1) on 6 December 2018 and was appointed to the Board of M1 on 11 June
2019.
Mr Mann is concurrently the Chief Digital Officer of Keppel Corporation Limited, appointed with effect from 1 March 2022.
Mr Mann has about 30 years of operational leadership experience across diverse geographical markets and a unique blend of insights and
perspectives in the rapidly evolving telecommunications industry.
Prior to joining M1, Mr Mann served as CEO at Pareteum Asia, a leading cloud software platform company, where he was appointed to expand
NASDAQ-listed Pareteum Corporation’s footprint in Asia. He was previously Global CEO (Communications and Convergence) of Lebara Mobile
(UK), one of the largest multinational, pan-European mobile virtual network operators in the world. He was also the former CEO of Hutchison
Telecommunication in Jakarta, Indonesia.
Mr Mann was appointed as a Director of Keppel Telecommunications & Transportation Ltd with effect from 1 October 2021.
Past principal directorship in the last five years
Pareteum Asia Pte Ltd and Lebara Service Centre Limited.
Louis Lim, 49
Master and Bachelor of Economics (Sigma Xi), Massachusetts Institute of Technology; MBA, INSEAD.
Mr Lim was appointed the Chief Executive Officer of Keppel Land Limited in 15 February 2021, after having served as its Chief Operating
Officer since January 2018.
Mr Lim was previously Director of Group Strategy & Development at Keppel Corporation Limited, where he was responsible for Keppel’s
corporate strategy and worked with Keppel’s business units on their strategic priorities. He was concurrently Managing Director of Keppel
Technology and Innovation Pte Ltd, a change agent and innovation catalyst for the Keppel Group which aims to transform how Keppel
harnesses technology and innovation to create value for stakeholders.
Prior to joining the Keppel Group in 2016, Mr Lim was a Partner with Bain & Company where he led the firm’s Consumer Products & Retail as
well as Change Management and Organisation practices in Southeast Asia. He began his career with the firm in 1997, working across Bain’s
Southeast Asia, as well as Melbourne, San Francisco and Tokyo offices, on projects that spanned from Papua New Guinea to Nigeria. Mr Lim’s
leadership roles at Bain included heading Human Resources and Recruiting for Southeast Asia.
Mr Lim is a board member of Keppel Infrastructure Holdings Pte Ltd and is also a director of various subsidiaries of Keppel Corporation
Limited and Keppel Land Limited. He was appointed as a Director of Keppel Capital Holdings Pte Ltd with effect from 1 October 2021. Mr Lim
is currently a member of the INSEAD Facilities Committee and he also sits on the board of Glyph Community Limited with effect from
1 December 2021.
Past principal directorships in the last five years
Nil
Annual Report 2021
218
KEY EXECUTIVES
Cindy Lim, 44
Bachelor of Engineering (Mechanical & Production) (Second Upper Honours) from Nanyang Technological University; Executive MBA,
Singapore Management University.
Ms Lim joined Keppel in 2001. She was appointed the Chief Executive Officer of Keppel Infrastructure Holdings Pte Ltd (Keppel Infrastructure)
on 15 February 2021.
In her 20 years with Keppel, Ms Lim has held various leadership positions. She was the Director of Group Corporate Development (GCD)
of Keppel Corporation Limited and concurrently the Managing Director of Keppel Urban Solutions Pte Ltd (KUS), an end-to-end integrated
master developer of liveable, smart and sustainable precincts and townships in the Asia-Pacific region. As the Director of GCD, she focused
on harnessing collaboration and synergies across the business units and functions within the Keppel Group. As the Managing Director of
KUS, she led the unit to capture business opportunities, tapping on the megatrends of rapid urbanisation and the increasing global focus on
sustainability.
Prior to these, Ms Lim was the Executive Director of Infrastructure Services in Keppel Infrastructure, where she stewarded the business by
driving plants’ efficiency and reliability, health, safety & environment (HSE) performance, as well as developing procurement strategies. She
has diverse experience in operation and process excellence, as well as people and organisation management.
Her principal directorships include Keppel Infrastructure Holdings, Keppel Water Services Pte Ltd, Keppel Urban Solutions Pte Ltd, Primus I
Investment Holdings Pte Ltd, Primus II Investment Holdings Pte Ltd, Keppel Kobleen Pte Ltd, MET Holding AG, Keppel Seghers Pte Ltd, Keppel
Energy Pte Ltd, Keppel Electric Pte Ltd, Keppel Gas Pte Ltd, Keppel New Energy Pte Ltd, Keppel DHCS Pte Ltd, Keppel Energy Transition Centre
Pte Ltd and Keppel Capital Holdings Pte Ltd.
Past principal directorships in the last five years
Keppel Infrastructure Fund Management Pte Ltd (Trustee-Manager of Keppel Infrastructure Trust), Keppel Rewards Pte Ltd, Vietnam Growth
Pte Ltd (formerly known as Mulwort Pte Ltd) and Vietnam Success Pte Ltd (formerly known as Leklier Pte Ltd).
Bridget Lee Siow Pei, 50
Master of Management, JL Kellogg Graduate School of Management, Northwestern University; Bachelor of Accountancy, Nanyang
Technological University.
Ms Lee is the Chief Executive Officer (CEO) and Executive Director of Keppel Capital Alternative Asset Pte Ltd (KCAA), a wholly-owned
subsidiary of Keppel Capital Holdings Pte Ltd (Keppel Capital). Ms Lee is concurrently the Chief Operating Officer (COO) of Keppel Capital.
Prior to assuming her dual roles as COO of Keppel Capital and CEO of KCAA, Ms Lee helped to spearhead the efforts in the investment of new
platforms and initiatives in Keppel Capital. Ms Lee is also a Non-Executive Director of Keppel Pacific Oak US REIT Management Pte. Ltd. (the
Manager of Keppel Pacific Oak US REIT), with effect from 20 October 2021.
Ms Lee has more than 20 years of experience in investment, corporate finance and mergers and acquisitions with various financial institutions
in Asia and the United States. Her track record in transactions ranges from private equity, joint ventures, capital market transactions, as well as
listed companies’ merger and acquisitions, to funds and real assets investments.
Prior to joining Keppel Capital, Ms Lee was with Mapletree Investments as Senior Vice President of Investment overseeing the China market.
She was also with other global financial organisations including Temasek Holdings.
Past principal directorships in last five years
Nil
Koh Wee Lih, 49
Master of Business Administration, Master of Science in Industrial and Operations Engineering, Bachelor of Science (Summa Cum Laude) in
Aerospace Engineering; University of Michigan
Mr Koh was appointed Chief Executive Officer of Keppel REIT Management Limited (the Manager of Keppel REIT) with effect from
1 December 2021.
Mr Koh has over 25 years of experience in investment, corporate finance and asset management, of which more than 17 years are in direct
real estate – covering investments, developments, asset management and real estate private equity in the Asia Pacific region.
Prior to joining the Manager, Mr Koh was the Executive Director and CEO of AIMS APAC REIT Management Limited, the manager of AIMS
APAC REIT (AA REIT) from 2014 to 2021, where he was responsible for the overall planning, management and operation of AA REIT. Before
that, Mr Koh held various senior positions at AA REIT as well as other private funds and a developer, overseeing regional investment and asset
management.
Past principal directorships in last five years
AIMS APAC REIT Management Limited and various subsidiaries and associated companies of Keppel REIT.
Keppel Corporation Limited
OTHER INFORMATION
219
Jopy Chiang, 37
Master of Finance, University of Cambridge; Bachelor of Business Administration, National University of Singapore; CFA® Charterholder
Mr Jopy Chiang was appointed Chief Executive Officer of Keppel Infrastructure Fund Management Pte Ltd, the Trustee-Manager of Keppel
Infrastructure Trust (KIT), with effect from 1 August 2021.
Mr Chiang joined Keppel Capital in 2019 as Senior Vice President (Investments). He has over a decade of experience across infrastructure
investing and investment banking, with US$10 billion of transaction and advisory experience in developed and emerging markets of Asia-
Pacific, Europe and North America. Mr Chiang’s investment experience spans the infrastructure spectrum across renewables, regulated
utilities, conventional energy, distribution & transmission, transportation, water, waste and digital infrastructure, with transactions closed in key
markets such as ASEAN, Australia, China, Japan, UK and USA, and a track record of successful returns to investors.
Mr Chiang was previously the Head of Execution at Mizuho Asia Infra Capital, a captive infrastructure fund owned by Mizuho Bank. Prior to
that, he worked at Partners Group, Arcapita and Barclays Capital, and was based in Hong Kong, London and Singapore over the tenure of his
career. While in Keppel Capital, Mr Chiang played a key role in the successful launch of the Keppel Asia Infrastructure Fund.
Mr Chiang’s principal directorships include City Energy Pte Ltd (Chairman), Keppel Merlimau Cogen Pte Ltd (Chairman), KM Infrastructure
Holdings, Inc. (President, Chairman) and Ixom Holdings Pty Ltd., Australia.
Past principal directorships in last five years
Nil
Anthea Lee, 48
Bachelor of Science (Estate Management), Second Class Honours (Upper Division), National University of Singapore; Master of Science
(International Construction Management), Nanyang Technological University.
Ms Lee was appointed the Chief Executive Officer of Keppel DC REIT Management Pte Ltd (the Manager of Keppel DC REIT) with effect from
15 February 2021. She has more than 24 years of experience in real estate investment, business development, asset management and project
management.
Ms Lee joined the Manager when Keppel DC REIT was listed, as Head of Portfolio Management, taking charge of investments and asset
management and has been instrumental in growing Keppel DC REIT through various accretive acquisitions and portfolio management. She
was appointed Deputy CEO and Head of Investment in 2018, and has been actively involved in all aspects of Keppel DC REIT’s business.
Prior to joining the Manager, Ms Lee was Vice President, Investment at Keppel REIT Management Limited, managing regional investments
and divestments. Before joining the Keppel Group in 2006, she was with JTC Corporation and Ascendas Land, where she was responsible for
business development, asset management and project management of industrial and business park facilities for approximately 10 years.
Past principal directorships in the last five years
Various subsidiaries and associated companies of Keppel DC REIT.
David Eric Snyder, 51
Bachelor of Science in Business Administration, Biola University.
Mr Snyder was part of the management team that led the successful listing of Keppel Pacific Oak US REIT and has been the Chief Executive
Officer and Chief Investment Officer since its listing on 9 November 2017. Prior to his current appointment, Mr Snyder was a consultant to KBS
Capital Advisors where he managed the AFRT portfolio.
From 2008 to 2015, Mr Snyder was the Chief Financial Officer (CFO) of KBS Capital Advisors and five of its non-traded REITs. In addition to
his CFO responsibilities, he led the negotiation for the transfer of the AFRT portfolio comprised of over 800 properties valued at over
US$1.7 billion. He subsequently managed that portfolio for KBS Real Estate Investment Trust.
From 1998 to 2008, Mr Snyder was the Financial Controller for Nationwide Health Properties, a publicly-traded healthcare REIT. Prior to that he
was the Director of Financial Reporting for Regency Health Services.
Mr Snyder started his career as an auditor at Arthur Andersen LLP after graduating from Biola University.
Past principal directorships in the last five years
Nil
Annual Report 2021
220
KEY EXECUTIVES
Alvin Mah, 50
Bachelor of Business Administration (Honours), National University of Singapore; CFA® charterholder.
Mr Mah is the Chief Executive Officer of Alpha Investment Partners Limited (Alpha). He currently sits on the Investment Committee for various
funds under management and is also an Executive Director of Alpha’s Board. Prior to his current appointment, Mr Mah served as the Chief
Investment Officer, leading all investment efforts including crafting the investment strategies for the various funds.
Mr Mah has been active in Asian finance and investment activities for about 25 years and has conducted investments in key Asian markets.
He is well-versed in various aspects of investment and finance, having played key leadership roles in investment and banking. With a wide-
ranging exposure to finance, he has been able to customise structured solutions to meet specific investment objectives and has done
pioneering work for structured real estate investments, including Real Estate Investment Trusts and securitisation.
Past principal directorships in last five years
Nil
Devarshi Das, 50
Master of Business Administration, University of Chicago Booth School of Business; Master of Science in Civil Engineering, Purdue University;
Bachelor of Technology in Civil Engineering, Indian Institute of Technology.
Mr Das is the Chief Executive Officer (CEO), Infrastructure, Keppel Capital Alternative Asset Pte Ltd, a wholly-owned subsidiary of Keppel
Capital Holdings Pte Ltd (Keppel Capital). He joined Keppel Capital in January 2019 and is focused on building the private infrastructure fund
business. Mr Das has more than 22 years of private equity, principal investment and financial services experience.
Prior to Keppel Capital, Mr Das was the CEO of Capital Advisors Partners Asia Pte Ltd (CapAsia). Mr Das joined CapAsia, an infrastructure
private equity fund manager specialising in mid-market energy and infrastructure companies and assets, at the launch of its first fund in
2006. Over a tenure of more than 12 years in CapAsia, Mr Das was involved in all aspects of fund management of multiple funds and a key
executive of their funds. He was on the board of various portfolio companies representing the power, transportation, renewable energy and
telecommunications sectors.
Prior to CapAsia, Mr Das was with Australia and New Zealand Bank in their Project and Structured Finance group in Singapore. Mr Das also
has principal investment experience in the United States (US). He worked in the US energy industry for Enron Energy Services as an asset
investment manager, and also worked for Sempra Energy Solutions on investments into their contracted energy assets. Mr Das has also
acted as a product manager for the commercial auto insurance product of Progressive Insurance where he was responsible for the product
profitability across various midwestern states in the US.
Past principal directorships in last five years
Nil
Than Su Ee, 51
Master of Philosophy in Management Studies, Cambridge University; Master of Engineering (Industrial & Systems Engineering) and Bachelor
of Engineering (Mechanical & Production Engineering), National University of Singapore.
Mr Than joined Keppel Capital in June 2021 as Chief Executive Officer for the Core Infrastructure division. He brings with him over 20 years of
experience in investment banking and private equity, having worked across various countries in Southeast Asia, Greater China and the United
Kingdom.
Mr Than was previously Managing Director of China-ASEAN Investment Cooperation Fund, an offshore quasi-sovereign equity fund that
targets investment opportunities in infrastructure, energy and natural resources in the ASEAN region. Prior to that, he was Head of Global
Investment Banking for Greater China at OCBC Bank, overseeing the investment banking activities including loan syndication, fixed income,
private equity, mergers and acquisitions, as well as equity capital market businesses. He was also the Global Head for Mezzanine Capital Unit
(Private Equity & Special Opportunities) at OCBC Bank, responsible for its private equity activities in Southeast Asia and Greater China. Mr Than
started his career at Citigroup and was part of the direct investment team covering Australasia and Southeast Asia.
Over the course of his career, Mr Than has held senior management roles and sat on various investment and management committees. He
is currently an Advisory Panel member of the China-ASEAN Business Alliance. He has invested in more than 50 companies and originated
strategic investments into three private equity funds in China and Indonesia. His investment banking track record includes more than
US$30 billion in corporate advisory, loan syndication and bond transactions. He also successfully led and established OCBC Bank’s maiden
investment fund, with strong support from sovereign wealth fund, insurance company, regional banks, private banks fund-of-funds and family
offices.
Past principal directorships in last five years
OCBC Capital (Shanghai) Equity Investment Management Co Ltd and Reed International Limited.
Keppel Corporation Limited
OTHER INFORMATION MAJOR PROPERTIES
221
Held By
Completed properties
Effective
Group
Interest
Location
Description and
Approximate
Land Area
Tenure
Usage
Keppel REIT
47%
Keppel DC REIT
20%
Ocean Financial
Centre
Collyer Quay,
Singapore
One Raffles Quay,
Singapore
Marina Bay Financial
Centre Towers 1 and
2, and Marina Bay
Link Mall
Marina Boulevard,
Singapore
Marina Bay Financial
Centre Tower 3
Marina Boulevard,
Singapore
Keppel Bay Tower
HarbourFront
Avenue,
Singapore
Land area: 6,221 sqm
43-storey office tower with
ancillary retail space
Land area: 15,497 sqm
Two office towers of
50-storey and 29-storey
Land area: 33,220 sqm
Two office towers of
33-storey and 50-storey with
ancillary retail space
999 years leasehold
Commercial office building with
rentable area of 81,195 sqm
99 years leasehold
Commercial office building with
rentable area of 122,901 sqm
99 years leasehold
Commercial office building with
rentable area of 160,866 sqm
Land area: 9,710 sqm
46-storey office tower with
retail podium
99 years leasehold
Commercial office building with
rentable area of 124,114 sqm
Land area: 10,441 sqm
18-storey office tower with a
six-storey podium
99 years leasehold
Commercial office building with
rentable area of 35,881 sqm
8 Exhibition Street
Melbourne,
Australia
Land area: 4,329 sqm
35-storey office tower with
ancillary retail space
Freehold
Commercial office building with
rentable area of 45,031 sqm
8 Chifley Square
Sydney,
Australia
David Malcolm
Justice Centre
Perth,
Australia
Victoria Police Centre
Melbourne,
Australia
Land area: 1,581 sqm
30-storey office tower
99 years leasehold
Commercial office building with
rentable area of 19,334 sqm
Land area: 2,947 sqm
33-storey office tower
99 years leasehold
Commercial office building with
rentable area of 31,175 sqm
Land area: 5,136 sqm
40-storey office tower
Freehold
Commercial office building with
rentable area of 67,666 sqm
Pinnacle Office Park
Sydney,
Australia
Land area: 22,040 sqm
Three office towers of 8-
storey, 7-storey and 4-storey
Freehold
Commercial office building with
rentable area of 34,857 sqm
T Tower
Seoul,
South Korea
Keppel DC
Singapore 1
Serangoon,
Singapore
Keppel DC
Singapore 2
Tampines,
Singapore
Keppel DC
Singapore 3
Tampines,
Singapore
Keppel DC
Singapore 4
Tampines,
Singapore
Keppel DC
Singapore 5
Jurong,
Singapore
Land area: 5,346 sqm
28-storey office tower
Freehold
Commercial office building with
rentable area of 21,216 sqm
Land area: 7,333 sqm
6-storey data centre
30 years lease with
option for another
30 years
Data centre with rentable area of
10,193 sqm
Land area: 5,000 sqm
5-storey data centre
30 years lease and
extended for another
30 years
Data centre with rentable area of
3,575 sqm
Land area: 5,000 sqm
5-storey data centre
30 years lease and
extended for another
30 years
Data centre with rentable area of
5,103 sqm
Land area: 6,805 sqm
5-storey data centre
30 years lease and
extended for another
30 years
Data centre with rentable area of
7,854 sqm
Land area: 7,742 sqm
5-storey data centre
30 years lease
Data centre with rentable area of
8,717 sqm
Annual Report 2021
OTHER INFORMATION 222
MAJOR PROPERTIES
Held By
Effective
Group
Interest
Location
Description and
Approximate
Land Area
Tenure
Usage
DC1
Riverside Road,
Singapore
Gore Hill Data Centre
Sydney,
Australia
Land area: 8,538 sqm
5-storey data centre
70 years and
5 months lease
Data centre with rentable area of
19,864 sqm
Land area: 6,692 sqm
4-storey data centre
Freehold
Data centre with rentable area of
8,450 sqm
Intellicentre Campus
Sydney,
Australia
Land area: 20,031 sqm
2-storey and 5-storey
data centres
Freehold
Data centre with rentable area of
16,169 sqm
Almere Data Centre
Amsterdam,
Netherlands
Keppel DC Dublin 1
Dublin,
Ireland
Keppel DC Dublin 2
Dublin,
Ireland
maincubes Data
Centre
Offenbach am Main,
Germany
Kelsterbach Data
Centre
Kelsterbach,
Germany
Guangdong Data
Centre
Guangdong,
China
The Plaza Buildings
8th Street, Bellevue,
Washington,
USA
Bellevue Technology
Center
24th Street, Bellevue,
Washington,
USA
The Westpark
Portfolio
8200-8644 154th
Avenue NE Redmond,
Washington,
USA
Land area: 7,930 sqm
3-storey data centre
Freehold
Data centre with rentable area of
11,000 sqm
Land area: 20,275 sqm
2-storey data centre
999 years leasehold
Data centre with rentable area of
6,328 sqm
Land area: 13,900 sqm
Single-storey data centre
999 years leasehold
Data centre with rentable area of
2,613 sqm
Land area: 5,596 sqm
4-storey data centre
Freehold
Data centre with rentable area of
9,016 sqm
Land area: 46,369 sqm
5-storey data centre
Freehold
Data centre with rentable area of
50,248 sqm
Land area: 78,021 sqm
7-storey data centre
50 years leasehold
Data centre with rentable area of
20,596 sqm
Land area: 16,295 sqm
16 and 10 storey multi-
tenanted office buildings
Freehold
Commercial office building with
rentable area of 45,615 sqm
Land area: 188,570 sqm
Office campus featuring
9 multi-tenanted office
buildings
Freehold
Commercial office buildings with
rentable area of 30,705 sqm
Land area: 167,621 sqm
Business campus
comprising 19 office
buildings and 2 flex buildings
which are multi-tenanted
Freehold
Commercial office and flex
buildings with rentable area of
72,650 sqm
Westmoor Center
Westmoor Drive,
Colorado,
USA
Land area: 176,953 sqm
Business campus featuring
6 multi-tenanted office
buildings
Freehold
Commercial office building with
rentable area of 56,939 sqm
1800 West Loop
South
Houston,
USA
Maitland
Promenade I & II
485 & 495 N Keller
Road,
Florida,
USA
Land area: 7,627 sqm
A 21-storey high rise office
multi-tenanted property
Freehold
Commercial office building with
rentable area of 37,171 sqm
Land area: 78,379 sqm
Office campus featuring
2 multi-tenanted office
buildings
Freehold
Commercial office building with
rentable area of 42,804 sqm
One Twenty Five
125 East John
Carpenter Freeway,
Texas,
USA
Land area: 25,576 sqm
Office complex comprising
2 office buildings and a
7-storey parking garage
which are multi-tenanted
Freehold
Commercial office building with
rentable area of 41,996 sqm
Keppel Pacific Oak US REIT
7%
Keppel Corporation Limited
OTHER INFORMATION 223
Held By
Keppel Bay Pte Ltd
Effective
Group
Interest
100%
100%
Katong Retail Trust
100%
100%
100%
Beijing Changsheng
Property Management
Co Ltd
China The9 Interactive
(Shanghai) Ltd, The9
Computer Technology
Consulting (Shanghai)
Ltd and Shanghai Kai E
Information Technology
Co Ltd
Win Up Investment Ltd
30%
Spring City Golf & Lake
Resort Co (owned by
Kingsdale Development
Pte Ltd)
69%
North Bund Pte Ltd
30%
Vision (III) Pte Ltd
30%
PT Kepland Investama
100%
Tanah Sutera
Development Sdn Bhd
18%
City Square Office Co Ltd
40%
Straits Greenfield Ltd
100%
Keppel Land Watco I Co Ltd
61%
Keppel Land Watco II & III
Co Ltd
61%
Location
Reflections
at Keppel Bay
Singapore
Corals at
Keppel Bay
Singapore
I12 Katong
East Coast Road,
Singapore
Linglong Tiandi
Beijing,
China
The Kube
Shanghai,
China
Description and
Approximate
Land Area
Tenure
Usage
Land area: 83,538 sqm
99 years leasehold
A 1,129-unit waterfront
condominium development
Land area: 38,830 sqm
99 years leasehold
A 366-unit waterfront
condominium development
Land area: 7,261 sqm
99 years leasehold
A 6-storey shopping mall with
rentable area of 19,800 sqm
Land area: 3,546 sqm
50 years lease (office)
40 years lease (retail)
A 11-storey office tower with
ancillary retail space in Haidian
District
Land area: 3,686 sqm
50 years lease
A 4-storey office building at the
core area of Zhangjiang high-
tech Park
Westmin Plaza
Guangzhou,
China
Spring City Golf
& Lake Resort
Kunming,
China
International Bund
Gateway Shanghai,
China
Trinity Tower
Shanghai,
China
International
Financial Centre
(Tower 2)
Jakarta,
Indonesia
Taman Sutera and
Taman Sutera Utama
Johor Bahru,
Malaysia
Junction City Tower
(Phase 1)
Yangon,
Myanmar
Sedona Hotel Yangon
Yangon,
Myanmar
Saigon Centre
(Phase 1)
Ho Chi Minh City,
Vietnam
Saigon Centre
(Phase 2)
Ho Chi Minh City,
Vietnam
Land area: 9,278 sqm
50 years lease (office)
40 years lease (retail)
A 17-storey office tower with
ancillary retail space in Liwan
District
Land area: 2,507,653 sqm
Two 18-hole golf courses,
73 guests rooms and 527
resort homes
70 years lease
(residential)
50 years lease
(golf course)
Integrated resort
comprising golf courses, resort
homes and resort facilities
Land area: 13,373 sqm
50 years lease (office)
40 years lease (retail)
A mixed-use development in
Hongkou District
Land area: 16,427 sqm
50 years lease (office)
40 years lease (retail)
A mixed-use development in
Hongkou District
Land area: 10,428 sqm
20 years lease with
option for another 20
years
A Grade A office development in
Jakarta CBD with rentable area
of 50,200 sqm
Land area: 2,018,390 sqm
Freehold
A township comprising
residential units, commercial
space and recreational facilities
in Skudai
Land area: 26,406 sqm
50 years BOT with
option for another two
10-years
A mixed-use development in
CBD
Land area: 32,000 sqm
Land area: 2,730 sqm
25-storey office, retail
cum serviced apartments
development
50 years BOT with
option for another two
10-years
50 years leasehold
Land area: 8,355 sqm
50 years leasehold
A 5-star hotel in Yangon with
789 rooms
Commercial building with
rentable area of 11,683 sqm
office and 10,099 sqm of
serviced apartments
Commercial building with
rentable area of 37,600 sqm
retail, 34,000 sqm office and
195 units of serviced apartments
Annual Report 2021
224
MAJOR PROPERTIES
Held By
Effective
Group
Interest
Location
Description and
Approximate
Land Area
Tenure
Usage
Properties under development
K-Commercial Pte Ltd
100%
Parksville Development
Pte Ltd
100%
Keppel Bay Pte Ltd
100%
Alpha DC Fund
65%
Keppel Towers
Hoe Chiang Road,
Singapore
19 Nassim
Nassim Hill,
Singapore
Keppel Bay Plot 6
Singapore
3 Broadcast Way,
Artarmon,
New South Wales,
Australia
Land area: 9,126 sqm
Freehold
Land area: 5,785 sqm
99 years leasehold
Commercial office
buildings
*(2024)
A 101-unit condominium
development
*(2023)
Land area: 43,701 sqm
99 years leasehold
A proposed 86-unit waterfront
condominium development
Land area: 3,840 sqm
5-storey data centre
Freehold
Data centre with rentable area of
3,975 sqm
Keppel DC Fund II
41%
Keppel REIT
Shanghai Floraville Land
Co Ltd
47%
99%
Shanghai Jinju Real Estate
Development Co Ltd
99%
Harbourfront Three Pte Ltd
39%
Tonghu Science City,
Zhongkai High-Tech
Area, Huizhou City,
Guangdong Province,
China
No. 699 Songying
Road, Xianghuaqiao
Street, Qingpu
District, Shanghai
Land area: 41,487 sqm
4-storey internet data
centre block
Land area: 22,226 sqm
5-storey internet data
centre block
50 years leasehold
Internet data centre with
rentable IT load of 36.8MW
50 years leasehold
Internet data centre with
rentable IT load of 19.8MW
Blue & William
Sydney,
Australia
Land area: 2,309 sqm
10-storey Grade A office
building under development
Freehold
Commercial office building with
rentable area of 14,183 sqm
Land area: 27,958 sqm
40 years lease (retail)
50 years lease (office)
An office and retail development
*(2023)
Park Avenue Central
Shanghai,
China
Sheshan Riviera
Shanghai,
China
The Reef at King’s
Dock
Singapore
Land area: 175,191 sqm
70 years lease
(residential)
40 years lease
(commercial)
Land area: 28,579 sqm
99 years leasehold
A 217-unit landed development
in Sheshan
*(2022 Phase 2)
A 429-unit waterfront
condominium development
*(2025)
A mixed-use development with
1,281 residential units with
commercial facilities in Liangxi
District
(*2022 Phase 4)
A 1,403-unit residential
development with commercial
and SOHO facilities in Binhu
District
*(2023 Phase 7)
A 2,904-unit residential
development with integrated
facilities in Xinwu District
*(2022 Phase 5b)
A commercial sub-centre
comprising of two office towers
70 years lease
(residential)
40 years lease
(commercial)
70 years lease
(residential)
40 years lease
(commercial)
70 years lease
(residential)
40 years lease
(commercial)
Keppel Heights (Wuxi)
Property Development
Co Ltd
100%
Park Avenue Heights
Wuxi,
China
Land area: 66,010 sqm
Keppel Lakefront (Wuxi)
Property Development
Co Ltd
100%
Waterfront
Residences
Wuxi,
China
Land area: 215,230 sqm
Seasons Residences
Wuxi,
China
Land area: 180,258 sqm
Land area: 40,451 sqm
40 years leasehold
Seasons City in
Sino-Singapore
Tianjin Eco-City
Tianjin,
China
100%
100%
Keppel Seasons
Residences Property
Development (Wuxi)
Co Ltd
Keppel Hong Yuan
(Tianjin Eco-City) Property
Development Co Ltd/Keppel
Hong Tai (Tianjin Eco-City)
Property Development Co
Ltd/ Keppel Hong Teng
(Tianjin Eco-City) Property
Development Co Ltd
Keppel Corporation Limited
OTHER INFORMATION Held By
Nanjing Zhijun Property
Development Co Ltd
Effective
Group
Interest
25%
Location
Noblesse IX
Nanjing,
China
Description and
Approximate
Land Area
Land area: 38,285 sqm
Shanghai Xindi Real Estate
Co Ltd
15%
Tianjin Fushi Property
Development Co Ltd
49%
Tianjin Fulong Property
Development Co Ltd
100%
PT Kepland Investama
100%
PT Harapan Global Niaga
100%
Tanah Sutera Development
Sdn Bhd
18%
City Square Tower Co Ltd
40%
Saigon Sports City Ltd
100%
Empire City LLC
40%
South Rach Chiec LLC
42%
Kapstone Construction
Private Limited
49%
Upview, Shanghai
Shanghai,
China
North Island mixed-
use development
Tianjin,
China
North Island mixed-
use development
Tianjin,
China
International
Financial Centre
(Tower 1)
Jakarta,
Indonesia
West Vista at Puri
Jakarta,
Indonesia
Taman Sutera and
Taman Sutera Utama
Johor Bahru,
Malaysia
Junction City Tower
(Phase 2)
Yangon,
Myanmar
Saigon Sports City
Ho Chi Minh City,
Vietnam
Empire City
Ho Chi Minh City,
Vietnam
Palm City
Ho Chi Minh City,
Vietnam
Urbania Township
Mumbai,
India
225
Tenure
Usage
70 years lease
(residential)
40 years lease
(commercial)
70 years lease
(residential)
70 years lease
(residential)
40 years lease
(commercial)
70 years lease
(residential)
40 years lease
(commercial)
A mixed-use development with
about 181 residential units and
417 commercial units in Xuanwu
District
*(2022)
A 1,566-unit residential
development in Jiading District
(*2022)
A mixed-used development
in North Island within Sino-
Singapore Tianjin Eco-City
(*2023-2026)
A mixed-use development
in North Island within Sino-
Singapore Tianjin Eco-City
Land area: 84,000 sqm
Land area: 226,972 sqm
Land area: 664,492 sqm
Land area: 10,428 sqm
20 years lease with
option for another
20 years
A prime office development with
rentable area of 70,000 sqm
Land area: 28,851 sqm
30 years lease with
option for another
20 years
A 2,855-unit residential
development with ancillary shop
houses
Land area: 2,850,774 sqm
Freehold
A township comprising
residential units, commercial
space and recreational facilities
in Skudai
Land area: 26,406 sqm
50 years BOT with
option for another
two 10-years
A 23-storey Grade A office
building within a mixed use
development in CBD
Land area: 638,737 sqm
50 years leasehold
Land area: 146,000 sqm
50 years leasehold
Land area: 289,365 sqm
50 years leasehold
Land area: 60,349 sqm
Freehold
A township with about 4,300
apartments, commercial
complexes and public sports
facilities
*(2024 Phase 1)
A residential development
with about 2,350 units and
commercial space in Thu Thiem
New Urban Area, District 2
*(2022 Phase 3)
A residential township with more
than 3,000 units and commercial
space at South Rach Chiec,
District 2
A 7,505 residential unit
integrated township
development located in Thane
(*2031)
A Grade A office development
located in the prime commercial
hub of Yeshwantpur
(*2026)
Annual Report 2021
Keppel Puravankara
Development Pvt
Ltd
51%
KPDL Grade-A
Office Tower
Land area: 30,898 sqm
Freehold
226
MAJOR PROPERTIES
Held By
Industrial properties
Effective
Group
Interest
Location
Description and
Approximate
Land Area
Tenure
Usage
Keppel FELS Limited
100%
Keppel Shipyard Limited
100%
*
Expected year of completion
Pioneer and
Crescent Yard,
Singapore
Land area: 522,097 sqm
buildings, workshops,
building berths, drydocks
and wharves
Benoi and
Pioneer Yard,
Singapore
Land area: 800,375 sqm
buildings, workshops,
drydocks and wharves
16 - 30 years
leasehold
Offshore oil rig construction and
repair
30 years leasehold
Shiprepairing, shipbuilding and
marine construction
Keppel Corporation Limited
OTHER INFORMATION GROUP FIVE-YEAR PERFORMANCE
227
Selected Profit & Loss Account Data
($ million)
Revenue
Operating profit
Profit before tax
Net profit attributable to shareholders of the Company
Selected Balance Sheet Data
($ million)
Fixed assets, investment properties & right-of-use assets
Associated companies, joint ventures and investments
Stocks, contract assets, debtors, cash, assets held for sale
& long term assets
Intangibles
Total assets
Less:
Creditors
Borrowings & lease liabilities
Other liabilities
Net assets
Share capital & reserves
Perpetual Securities
Non-controlling interests
Total Equity
Per Share
Earnings (cents) (Note 1):
Before tax
After tax
Total distribution (cents)
Net assets ($)
Net tangible assets ($)
Financial Ratios
Return on shareholders’ funds (%) (Note 2):
Profit before tax
Net profit
Dividend cover (times)
Net cash/(gearing) (times)
Employees
Average headcount (number)
Wages & salaries ($ million)
2017
2018
2019
2020
2021
5,964
801
442 ^
196 ^
5,894
6,575
16,084
133
28,686
8,298
7,793
622
11,973
5,965
1,055
1,245
948
5,224
6,825
14,410
129
26,588
6,912
7,549
550
11,577
7,580
877
954
707
6,684
7,121
15,834
1,683
31,322
7,325
11,657
694
11,646
6,574
8
(255)
(506)
6,972
7,355
16,170
1,609
32,106
7,585
12,603
762
11,156
8,625
898
1,335
1,023
6,830
7,525
16,379
1,589
32,323
7,210
12,017
655
12,441
11,443
11,268
11,211
10,728
11,655
-
530
-
309
-
435
-
428
401
385
11,973
11,577
11,646
11,156
12,441
23.3 ^
10.8 ^
22.0
6.29
6.22
3.7
1.7
0.5
67.7
52.3
30.0 *
6.22
6.15
10.8
8.4
1.7 *
48.8
38.9
20.0
6.17
5.25
7.9
6.3
1.9
(0.46)
(0.48)
(0.85)
(14.3)
(27.8)
10.0
5.90
5.02
(2.4)
(4.6)
(2.8)
(0.91)
73.7
56.2
33.0
6.41
5.53
12.0
9.1
1.7
(0.68)
21,862
1,107
18,186
1,018
18,297
1,187
18,452
1,166
16,393
1,151
^
*
Includes the one-off financial penalty from the global resolution and related costs of $619 million.
Includes the special dividend paid of 5.0 cents per share.
Notes:
1.
2.
Earnings per share are calculated based on the Group profit by reference to the weighted average number of shares in issue during the year.
In calculating return on shareholders’ funds, average shareholders’ funds has been used.
Annual Report 2021
OTHER INFORMATION
228
GROUP FIVE-YEAR PERFORMANCE
2021
Group revenue of $8,625 million was $2,051 million or 31% higher than the preceding year. Revenue from Energy & Environment increased by
$1,631 million or 41% to $5,574 million, led by higher electricity and gas sales, higher progressive revenue recognition from the Tuas Nexus
Integrated Waste Management Facility project in Singapore which was secured in April 2020, higher progressive revenue recognition from
the Hong Kong Integrated Waste Management Facility project, as well as higher revenue from the offshore & marine business. These were
partially offset by the completion of Keppel Marina East Desalination Plant project in June 2020, as well as the absence of revenue from the
Doha North Sewage Treatment Works due to the cessation of the operation and maintenance contract in July 2020. The higher revenue in the
offshore & marine business was mainly due to higher revenue recognition from certain ongoing projects and revenue from new projects in
2021, which were partly offset by cessation of revenue recognition on Awilco contracts and deferment of some projects. Major jobs delivered
by the offshore & marine business in 2021 include two LNG bunker vessels, an LNG carrier, a FLNG turret, four Floating Production Storage
and Offloading vessel (FPSO) modification and upgrading projects, and a Floating Storage Regasification Unit (FSRU) conversion project.
Revenue from Urban Development increased by $354 million to $1,629 million mainly due to higher revenue from property trading projects in
China and Singapore. Revenue for Connectivity of $1,260 million was marginally above that of 2020. Higher revenues from the logistics and
data centre businesses, and higher handset and equipment sales in M1, were partly offset by the lower service revenue in M1. Revenue from
Asset Management increased by $27 million to $162 million mainly due to higher fees resulting from increased acquisition and divestment
activities, and from additional fund commitments secured during the year.
Group pre-tax profit was $1,335 million, as compared to pre-tax loss of $255 million in 2020. All segments recorded improved pre-tax results.
The Energy & Environment’s pre-tax loss was $469 million as compared to pre-tax loss of $1,251 million in 2020. This was largely due to lower
impairments and share of Floatel’s restructuring gain. Excluding impairments of $477 million and share of Floatel’s restructuring gain of $269
million, pre-tax loss of the segment was $261 million, as compared to pre-tax loss of $269 million (excluding impairments) in 2020. Pre-tax
results for the offshore & marine business were better than last year’s despite lower government relief measures related to the COVID-19
pandemic. This was mainly driven by savings from overheads reduction and lower share of losses from associated companies, partly offset
by higher net interest expense. There was lower contribution from the power & renewables business, as well as loss on hedge ineffectiveness
on interest rate swaps following the refinancing plan for an asset. Pre-tax profit from Urban Development increased by $352 million to $1,072
million, mainly due to higher contribution from property trading projects in China and Vietnam, as well as gains from the disposal of interests
in the Dong Nai project in Vietnam, Serenity Villas project in Chengdu, and China Chic project in Nanjing, and divestment of a partial interest
in Tianjin Fushi Real Estate Development Co Ltd. These were partly offset by lower fair value gains from investment properties, impairment
provision for a hotel in Myanmar, as well as lower contribution from the Sino-Singapore Tianjin Eco-City. Connectivity’s pre-tax profit of $86
million was $57 million higher than 2020. This was mainly due to the gains from divestment of interests in Wuhu Sanshan Port Company
Limited and in Keppel Logistics (Foshan) following agreement reached with local authorities on the compensation for the closure of Lanshi
port , as well as lower net interest expense. These were partly offset by lower contribution from M1, and absence of gain from the disposal of
interest in Business Online Public Company Limited in 2020. Pre-tax profit from Asset Management increased by $23 million to $327 million.
In 2020, there was a mark-to-market gain recognised from the reclassification of the Group’s interest in KIT from an associated company to
an investment following the loss of significant influence over KIT. Excluding the reclassification gain, pre-tax profit was $154 million higher
than 2020. For 2021, the segment recorded higher fee income arising from acquisitions and divestments completed, and from additional fund
commitments secured during the year. In addition, there was recognition of mark-to-market gains from investments, higher dividend income
from KIT, as well as fair value gains on investment properties and data centres from Keppel REIT, Keppel DC REIT, Alpha Data Centre Fund
and Keppel Data Centre Fund II. In 2020, there was the recognition of gains from the sale of units in Keppel DC REIT, divestment of interest
in Gimi MS Corporation, and mark-to-market losses from investments. Corporate & Others recorded pre-tax profit of $319 million in 2021 as
compared to pre-tax loss of $57 million in the prior year. This was mainly due to fair value gain instead of loss on investments, and higher
investment income. The fair value gains were largely from investments in new technology and start-ups, in particular, Envision AESC Global
Investment L.P..
Taxation expenses increased by $71 million mainly due to higher taxable profit at Urban Development. Taking into account income tax
expenses, non-controlling interests and profit attributable to holders of perpetual securities, net profit attributable to shareholders was $1,023
million as compared to net loss of $506 million in the preceding year. Profits from Urban Development, Asset Management and Connectivity
businesses were partly offset by losses at Energy & Environment.
Revenue ($ billion)
Pre-Tax Profit ($ million)
Net Profit ($ million)
10.0
8.0
6.0
4.0
2.0
0
1,500
1,125
750
375
0
-375
1,200
800
400
0
-400
-800
2017
2018
2019
2020
2021
6.0
6.0
7.6
6.6
8.6
2017
442^
2018
2019
2020
2021
1,245
954
(255)
1,335
2017
196^
2018
948
2019
707
2020
2021
(506)
1,023
^
Includes the one-off financial penalty and related costs of $619 million.
Keppel Corporation Limited
OTHER INFORMATION 229
2020
Group revenue of $6,574 million for 2020 was $1,006 million or 13% lower than the preceding year. Revenue from Energy & Environment
decreased by $1,026 million or 21% to $3,943 million led by lower revenue in the offshore & marine business due to slower progress from
certain on-going projects as a result of COVID-19 related disruptions, suspension of revenue recognition on Awilco contracts, fewer new
contracts secured in 2020 and deferment of some projects, which were partly offset by revenue from new projects. The lower revenue was
also due to lower electricity sales, lower progressive revenue recognition from the Hong Kong Integrated Waste Management Facility project,
as well as the completion of Keppel Marina East Desalination Plant project in 2Q 2020 in the infrastructure business. Major jobs delivered
by the offshore & marine business in 2020 include two jackup rigs, a dual-fuel bunker tanker, a Floating Production Storage and Offloading
vessel (FPSO) modification and upgrading project, a LNG Carrier, a Dredger and a Production Barge. Revenue from Urban Development
decreased by $61 million to $1,275 million mainly due to lower revenue generated from hospitality and commercial properties and lower
revenue from property trading projects in Singapore and Vietnam, which were partly offset by higher revenue from property trading projects
in China. Revenue for Connectivity grew by $92 million to $1,220 million mainly due to M1 which was consolidated from March 2019, partly
offset by lower contribution from the logistics business following the divestment of some China logistics assets in November 2019. Revenue
from Asset Management decreased by $10 million to $135 million mainly due to lower acquisition and divestment fees, partly offset by higher
management fees.
Group pre-tax loss for 2020 was $255 million, as compared to pre-tax profit of $954 million in 2019. Excluding impairments of $1,030 million,
pre-tax profit of the Group was $775 million, which was $302 million or 28% lower than $1,077 million (excluding impairments) in 2019. Energy
& Environment’s pre-tax loss was $1,251 million as compared to pre-tax loss of $121 million in 2019. Excluding impairments of $982 million,
the pre-tax loss was $269 million. This was largely due to weaker performance in the offshore & marine business, which had been impacted by
slower progress on projects due principally to significant downtime as a result of COVID-19, share of losses from associated companies and
joint ventures, higher net interest expense, and fair value loss on investment, which were partially offset by lower overheads and government
relief measures related to the COVID-19 pandemic. These were partly offset by higher contributions from the energy infrastructure and
environmental infrastructure businesses, as well as the absence of share of loss from KrisEnergy and fair value loss on KrisEnergy warrants
as compared to 2019. Pre-tax profit from Urban Development increased by $44 million to $720 million mainly due to higher fair value gains
from investment properties, higher contribution from property trading projects in China, as well as higher contribution from the Sino-Singapore
Tianjin Eco-City. These were partly offset by lower contribution from associated companies and joint ventures. Pre-tax profit of Connectivity
was $29 million, which was $167 million below that in 2019. This was mainly due to the absence of fair value gain recognised in 2019 from the
remeasurement of previously held interest in M1 at acquisition date, as well as lower contribution from M1. These were partly offset by gain
from the disposal of interest in Business Online Public Company Limited, and lower losses from the logistics business. Pre-tax profit from Asset
Management increased by $65 million to $304 million mainly due to mark-to-market gain recognised from the reclassification of the Group’s
interest in KIT from an associated company to an investment following the loss of significant influence over KIT, gain from sale of units in
Keppel DC REIT, gain from divestment of interest in Gimi MS Corporation, as well as dividend income from KIT and higher contribution from
Keppel DC REIT. These were partly offset by mark-to-market losses from investments, lower investment income and lower contributions from
Keppel REIT and Alpha Data Centre Fund, as well as absence of dilution gain arising from Keppel DC REIT’s private placement exercise in 2019.
Taxation expenses increased by $61 million or 32% mainly due to lower write-backs of tax provision as compared to 2019 and higher taxation
from property trading projects in China, partly offset by the deferred tax credit recognised in 2020 in relation to the impairment provisions
for contract assets. Non-controlling interests were $57 million lower than the preceding year. Taking into account income tax expenses and
non-controlling interests, net loss attributable to shareholders for 2020 was $506 million as compared to net profit of $707 million in the
preceding year. Losses in the Energy & Environment business were partly offset by profits from the Urban Development, Asset Management
and Connectivity businesses.
2019
Group revenue of $7,580 million for 2019 was $1,615 million or 27% higher than in the preceding year. Revenue from Energy & Environment
improved by $647 million or 15% to $4,969 million mainly due to higher revenue recognition from ongoing projects in the offshore & marine
business, increased sales in the power and gas business as well as higher progressive revenue recognition from the Keppel Marina East
Desalination Plant project and the Hong Kong Integrated Waste Management Facility project, partly offset by the absence of revenue
recognised in 2018 from the sale of jackup rigs to Borr Drilling Limited. Major jobs delivered by the offshore & marine business in 2019 include
five jackup rigs, three FPSO/FSRU conversions and four dredgers. Revenue from Urban Development decreased marginally by $4 million to
$1,336 million mainly due to lower revenue from property trading projects in Singapore, partly offset by higher revenue from property trading
projects in China. Revenue from Connectivity increased by $946 million to $1,128 million mainly due to the consolidation of M1. Revenue from
Asset Management increased by $26 million to $145 million as a result of higher asset management and acquisition fees.
Shareholders’ Fund ($ billion)
Total Equity ($ billion)
Market Capitalisation ($ billion)
12
9.6
7.2
4.8
2.4
0
15
12
9
6
3
0
15
12
9
6
3
0
2017
11.4
2018
11.3
2019
11.2
2020
10.7
2021
11.7
2017
12.0
2018
11.6
2019
11.6
2020
11.2
2021
12.4
2017
13.4
2018
10.7
2019
12.3
2020
2021
9.8
9.3
Annual Report 2021
230
GROUP FIVE-YEAR PERFORMANCE
Group pre-tax profit for the current year was $954 million, $291 million or 23% below the previous year. Energy & Environment’s pre-tax loss
was $121 million as compared to pre-tax loss of $168 million in 2018. The lower loss was mainly due to higher operating results arising
from higher revenue, lower impairment provisions and lower net interest expense from the offshore & marine business, as well as higher
contributions from energy infrastructure and environmental infrastructure, and lower provision for impairment of an associated company,
partly offset by share of losses from associated companies and the absence of write-back of provisions for claims in 2018 in the offshore &
marine business, higher fair value loss on KrisEnergy warrants and lower contributions from infrastructure services. Pre-tax profit from Urban
Development decreased by $525 million to $676 million mainly due to the lower gains from the en-bloc sale of development projects in 2019
(disposal of a partial interest in the Dong Nai project in Vietnam) as compared to 2018 (Keppel China Marina Holdings Pte Ltd, Keppel Bay
Property Development (Shenyang) Co. Ltd., Keppel Township Development (Shenyang) Co. Ltd. and Quoc Loc Phat Joint Stock Company),
the absence of gain from divestment as compared against 2018 (Aether Limited), lower contribution from property trading projects in
Singapore, higher net interest expense and lower share of profit from the Sino-Singapore Tianjin Eco-City, partly offset by higher contribution
from property trading projects in China, higher fair value gains on investment properties and higher contribution from associated companies.
Pre-tax profit of Connectivity increased by $191 million to $196 million mainly due to fair value gain from the remeasurement of the previously
held interest in M1 at acquisition date and higher contributions from M1 resulting from the consolidation, partly offset by financing cost
and amortisation of intangibles arising from the acquisition of M1 and lower contribution from the logistics business. Pre-tax profit of Asset
Management increased by $19 million to $239 million mainly due to higher asset management fees and investment income, and higher fair
value gains on data centres, partly offset by lower share of associated companies’ profits as well as the absence of gain arising from the sale
of stake in Keppel DC REIT in 2018.
Taxation expenses decreased by $92 million or 32% mainly due to lower taxable profits. Non-controlling interests were $42 million higher than
in the preceding year. Taking into account income tax expenses and non-controlling interests, net profit attributable to shareholders for 2019
was $707 million, a decrease of $241 million from $948 million in 2018. Urban Development was the largest contributor to the Group’s net
profit with a 68% share, followed by Asset Management’s 30% and Connectivity’s 19%, while Energy & Environment and Corporate & Others
contributed negative 14% and negative 3% to the Group’s net profit respectively.
2018
Group revenue of $5,965 million for 2018 was at almost the same level as in 2017. Revenue from Energy & Environment improved by $490
million or 13% to $4,322 million mainly due to revenue recognition in relation to the jackup rigs sold to Borr Drilling Limited and higher revenue
recognition from ongoing projects in the offshore & marine business, as well as increased sales in the power and gas business, partly offset
by lower progressive revenue recognition from the Keppel Marina East Desalination Plant project. Major jobs completed and delivered
by the offshore & marine business in 2018 included two jackup rigs, a gas carrier refurbishment, two Floating Production Storage and
Offloading (FPSO) conversions, a Roll-on/Roll-off (RORO) conversion and two dual-fuel Liquified Natural Gas (LNG) tugs. Revenue from Urban
Development decreased by $442 million to $1,340 million mainly due to lower revenue from Singapore, China and Vietnam property trading.
Revenue from Connectivity increased by $5 million to $182 million mainly due to higher contribution from the data centre business. Revenue
from Asset Management decreased by $20 million to $119 million mainly due to lower asset management fees.
Group pre-tax profit for the current year was $1,245 million, $803 million or 182% above the previous year. Group pre-tax profit for 2017
included $619 million for the one-off financial penalty and related costs. Excluding the one-off financial penalty and related costs from 2017,
Group pre-tax profit for 2018 of $1,245 million was $184 million or 17% above the pre-tax profit of $1,061 million for 2017.
Energy & Environment’s pre-tax loss was $168 million as compared to pre-tax loss, excluding the one-off financial penalty and related costs, of
$202 million in 2017. This was mainly due to higher operating results in the offshore & marine business arising from higher revenue, write-
back of provisions for claims and lower net interest expense, lower share of loss from KrisEnergy and higher contribution from environmental
infrastructure and infrastructure services, partly offset by higher impairment provisions in the offshore & marine business, absence of gain
from divestment of Keppel Verolme, lower contribution from energy infrastructure, provision for impairment of an associated company, and
absence of gain from divestment of GE Keppel Energy Services Pte Ltd compared against last year. Pre-tax profit from Urban Development
increased by $273 million to $1,201 million mainly due to en-bloc sales of development projects (Keppel China Marina Holdings Pte Ltd, Keppel
Bay Property Development (Shenyang) Co. Ltd., Keppel Township Development (Shenyang) Co. Ltd. and Quoc Loc Phat Joint Stock Company)
and gain from divestment of the stake in Aether Limited. The positive variance was partly offset by lower fair value gains on investment
properties, lower contribution from Singapore and China property trading, lower share of profit from land sales in the Sino-Singapore Tianjin
Eco-City and other associated companies. Pre-tax profit of Connectivity decreased by $46 million to $5 million mainly due to higher operating
losses from the logistics business, fair value loss on a data centre asset, and absence of the fair value gain on investment recognised in 2017.
Profits from Asset Management increased by $47 million to $220 million mainly due to higher share of associated companies’ profits, gains
from change in interest in associated companies, dilution gain following Keppel DC REIT’s private placement exercise and the gain arising
from the sale of stake in Keppel DC REIT, partly offset by lower asset management fees.
Taking into account income tax expenses and non-controlling interests, and excluding the one-off financial penalty from the global resolution
and related costs of $619 million in 2017, net profit attributable to shareholders for 2018 was $948 million, an increase of $133 million
from $815 million in 2017. Urban Development was the largest contributor to the Group’s net profit with a 100% share, followed by Asset
Management’s 20% and Connectivity at breakeven, while Energy & Environment and Corporate & Others contributed negative 18% and
negative 2% to the Group’s net profit respectively.
Keppel Corporation Limited
OTHER INFORMATION 231
2017
Group revenue of $5,964 million for 2017 was $803 million or 12% below that of 2016. Revenue from Energy & Environment declined by $578
million to $3,832 million mainly due to lower volume of work and deferment of some projects in the offshore & marine business, partly offset
by increased sales in the power and gas business and progressive revenue recognition from the Keppel Marina East Desalination Plant project.
Major jobs completed and delivered by the offshore & marine business in 2017 include a semisubmersible (semi), a subsea construction
vessel, an FPSO conversion, an FPSO topsides installation/integration, a module fabrication & integration, a floating LNG conversion and an
ice-class multi-purpose vessel project. Revenue from Urban Development decreased by $253 million to $1,782 million mainly due to lower
revenue from China and Singapore, partly offset by higher revenue from Vietnam. Revenue from Connectivity decreased by $11 million to $177
million mainly due to lower contributions from the data centre business resulting from the absence of contribution from Keppel DC Singapore
3, which was injected into Keppel DC REIT in January 2017. Revenue from Asset Management increased by $9 million to $139 million mainly
due to higher performance and acquisition fees.
Group pre-tax profit for the current year was $442 million, $646 million or 59% below the previous year. Excluding the one-off financial penalty
from the global resolution and related costs, the Group registered a pre-tax profit of $1,061 million which is $27 million lower than that of the
preceding year.
Energy & Environment’s pre-tax loss in 2017 was $821 million. Excluding the one-off financial penalty from the global resolution and related
costs, Energy & Environment’s pre-tax loss was $202 million as compared to pre-tax profit of $12 million in 2016. This was mainly due to
lower operating results in the offshore & marine business arising from lower revenue and higher share of associated companies’ losses,
higher share of loss from KrisEnergy and recognition of fair value loss on KrisEnergy warrants, partly offset by lower impairment provisions
and lower net interest expense in the offshore & marine business, higher contributions from Energy Infrastructure, the gain on divestment of
its interest in GE Keppel Energy Services Pte Ltd, as well as the write-back of provision for impairment of an associated company. Provisions
in the offshore & marine business mainly for impairment of fixed assets, stocks & works-in-progress (WIP), investments and an associated
company, and restructuring costs, of $140 million in 2017 was lower than the $277 million impairment provisions recorded in 2016. Pre-tax
profit from Urban Development of $928 million was $134 million or 17% higher than that in 2016. This was mainly due to higher share of profit
from the Sino-Singapore Tianjin Eco-City, higher fair value gains on investment properties and higher contribution from Singapore and Vietnam
property trading, and en-bloc sales of development projects, partly offset by lower share of associated companies’ profits, mainly resulting
from the absence of the gains from divestment of the stakes in Life Hub @ Jinqiao and 77 King Street last year, and the absence of reversal
of impairment for hospitality assets. Profits from Connectivity increased marginally by $1 million to $51 million mainly due to recognition
of fair value gain on investment, partly offset by lower contribution from the logistics business and the data centre business, resulting from
the absence of contribution from Keppel DC Singapore 3, which was injected into Keppel DC REIT in January 2017. Pre-tax profit of Asset
Management decreased by $5 million to $173 million mainly due to lower share of associated companies’ profits, partly offset by higher
performance and acquisition fees.
Taking into account income tax expenses and non-controlling interests, and excluding the one-off financial penalty from the global resolution
and related costs of $619 million, net profit attributable to shareholders was $815 million, an increase of $31 million from last year. Urban
Development was the largest contributor to the Group’s net profit with an 89% share, followed by Asset Management’s 19%, Corporate &
Others’ 11% and Connectivity’s 4%, while Energy & Environment contributed negative 23% to the Group’s net profit.
Annual Report 2021
232
VALUE-ADDED STATEMENTS
($ million)
Value added from:
Revenue earned
Less: purchases of materials and services
Gross value added from operation
Interest and investment income
Share of associated companies’ profits
Other operating income/(expenses)
Total value added
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
One-off financial penalty & related costs
2017
2018
2019
2020
2021
5,964
(4,119)
1,845
158
291
196
5,965
(3,926)
2,039
174
221
186
7,580
(5,379)
2,201
242
147
215
2,490
2,620
2,805
6,574
(4,724)
1,850
191
(162)
(308)
1,571
8,625
(6,090)
2,535
221
467
(115)
3,108
1,027
244
189
27
364
580
619
988
285
205
20
526
751
-
1,163
192
1,120
253
1,116
325
313
12
418
743
-
292
24
273
589
-
251
11
346
608
-
Total Distribution
2,470
2,024
2,098
1,962
2,049
Balance retained in the business:
Depreciation & amortisation
Perpetual securities holders
Non-controlling interests share of profits in subsidiaries
Retained profit for the year
212
-
(25)
(167)
20
182
-
(8)
422
596
375
-
43
289
707
414
-
(26)
(779)
(391)
406
3
(27)
677
1,059
2,490
2,620
2,805
1,571
3,108
Average headcount (number)
21,862
18,186
18,297
18,452
16,393
Productivity data:
Value added per employee ($’000)
Value added per dollar employment cost ($)
Value added per dollar sales ($)
114
2.42
0.42
144
2.65
0.44
153
2.41
0.37
85
1.40
0.24
190
2.78
0.36
($ million)
4,000
3,000
2,000
1,000
0
-1,000
2,490
2,620
2,805
3,108
1,571
One-off financial penalty and related cost
Depreciation & Retained Profit
Interest Expenses & Dividends
Taxation
Wages, Salaries & Benefits
2017
2018
2019
2020
2021
619
20
580
244
1,027
-
596
751
285
988
-
707
743
192
-
-
(391)
1,059
589
253
608
325
1,163
1,120
1,116
Keppel Corporation Limited
OTHER INFORMATION
SHARE PERFORMANCE
233
Turnover
(million)
Share Prices
($)
200
180
160
140
120
100
80
60
40
20
0
20
18
16
14
12
10
8
6
4
2
0
2017
2018
2019
2020
2021
Turnover
High and Low Prices
Share Price ($)*
Last transacted (Note 3)
High
Low
Volume weighted average (Note 2)
Per Share
Earnings (cents) (Note 1)
Total distribution (cents)
Distribution yield (%) (Note 2)
Net price earnings ratio (Note 2)
Net assets backing ($)
At Year End
Share price ($)
Distribution yield (%) (Note 3)
Net price earnings ratio (Note 3)
Net price to book ratio (Note 3)
2017
2018
2019
2020
2021
7.35
7.83
5.73
6.79
10.8 ^
22.0
3.2
62.9
6.22
7.35
3.0
68.1
1.2
5.91
8.92
5.67
7.35
52.3
30.0 @
4.1 @
14.1
6.15
5.91
5.1 @
11.3
1.0
6.77
6.97
5.67
6.38
38.9
20.0
3.1
16.4
5.25
6.77
3.0
17.4
1.3
5.38
6.87
4.08
5.37
(27.8)
10.0
1.9
(19.3)
5.02
5.38
1.9
(19.4)
1.1
5.12
5.76
4.81
5.30
56.2
33.0
6.2
9.4
5.53
5.12
6.4
9.1
0.9
Earnings per share are calculated based on the Group net profit by reference to the weighted average number of shares in issue during the year.
Notes:
1.
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.
Historical share prices are not adjusted for special dividends, capital distribution and dividend in specie.
Includes the one-off financial penalty from the global resolution and related costs of $619 million.
Includes the special dividend paid of 5.0 cents per share.
Annual Report 2021
OTHER INFORMATION
234
SHAREHOLDING STATISTICS
As at 3 March 2022
Issued and Fully paid-up capital (including Treasury Shares) : $1,305,667,320.62
Issued and Fully paid-up capital (excluding Treasury Shares) : $1,248,603,450.70
Number of Issued Shares (including Treasury Shares)
Number of Issued Shares (excluding Treasury Shares)
Number/Percentage of Treasury Shares
Number/Percentage of Subsidiary Holdings¹
Class of Shares
Voting Rights (excluding Treasury Shares)
: 1,820,557,767
: 1,810,943,450
: 9,614,317 (0.53%)
: 0 (0%)
: Ordinary Shares
: One Vote Per Share
The Company cannot exercise any voting rights in respect of treasury shares. Subject to the Companies Act, 1967, subsidiaries cannot
exercise any voting rights in respect of shares held by them as subsidiary holdings.
Size of Shareholdings
1 - 99
100 - 1,000
1,001 - 10,000
10,001 - 1,000,000
1,000,001 and Above
Total
Twenty Largest Shareholders
Temasek Holdings (Private) Limited
Citibank Nominees Singapore Pte Ltd
DBS Nominees (Private) Limited
Raffles Nominees (Pte.) Limited
HSBC (Singapore) Nominees Pte Ltd
DBSN Services Pte. Ltd.
United Overseas Bank Nominees (Private) Limited
BPSS Nominees Singapore (Pte.) Ltd.
OCBC Nominees Singapore Private Limited
Phillip Securities Pte Ltd
OCBC Securities Private Limited
UOB Kay Hian Private Limited
Shanwood Development Pte Ltd
Maybank Securities Pte. Ltd.
IFAST Financial Pte. Ltd.
Chen Chun Nan
CGS-CIMB Securities (Singapore) Pte. Ltd.
BNP Paribas Nominees Singapore Pte. Ltd.
DB Nominees (Singapore) Pte Ltd
Lim Chee Onn
No. of
Shareholders
272
16,028
44,700
10,652
28
%
0.38
22.36
62.36
14.86
0.04
No. of
Shares
10,200
12,756,420
179,645,869
336,274,583
1,282,256,378
%
0.00
0.70
9.92
18.57
70.81
71,680
100.00
1,810,943,450
100.00
No. of
Shares
371,408,292
290,557,221
146,236,388
131,390,651
99,298,539
82,616,249
50,113,995
21,468,058
15,746,889
11,486,903
10,225,619
7,633,006
7,040,000
5,233,142
4,132,708
4,017,000
3,467,761
2,842,882
2,684,932
2,579,282
%
20.50
16.04
8.08
7.26
5.48
4.56
2.77
1.19
0.87
0.63
0.56
0.42
0.39
0.29
0.23
0.22
0.19
0.16
0.15
0.14
1,270,179,517
70.13
Substantial Shareholders (as shown in the Register of Substantial Shareholders)
Direct Interest
Deemed Interest
Total Interest
No. of Shares
%
No. of Shares
%
No. of Shares
%
Temasek Holdings (Private) Limited²
371,408,292
20.50
8,979,415
0.49
380,387,707
21.00
Notes:
¹
²
“Subsidiary holdings” is defined in the Listing Manual to mean shares referred to in Sections 21(4), 21(4B), 21(6A) and 21(6C) of the Companies Act, 1967.
Temasek Holdings (Private) Limited is deemed interested in 8,979,415 shares in which its subsidiaries and associated companies have direct or deemed interests.
Public Shareholders
Based on the information available to the Company as at 3 March 2022, approximately 78% of the issued shares of the Company is held by
the public and therefore, pursuant to Rules 723 and 1207 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.
Keppel Corporation Limited
OTHER INFORMATION
NOTICE OF ANNUAL GENERAL MEETING AND CLOSURE OF BOOKS
235
eppel
Corporation
Keppel Corporation Limited
Company Registration No. 196800351N
(Incorporated in the Republic of Singapore)
NOTICE IS HEREBY GIVEN that the 54th Annual General Meeting of the Company will be convened and held by electronic means (see Notes 1
to 3) on Friday, 22nd April 2022 at 3.00 p.m. (Singapore time) to transact the following business:
Ordinary Business
1.
2.
3.
4.
5.
6.
To receive and adopt the Directors’ Statement and Audited Financial Statements for the year ended 31 December 2021.
Resolution 1
To declare a final tax-exempt (one-tier) dividend of 21.0 cents per share for the year ended 31 December 2021 (2020:
final tax-exempt (one-tier) dividend of 7.0 cents per share).
Resolution 2
To re-elect the following directors, who will be retiring by rotation pursuant to Regulation 83 of the Constitution of
the Company (“Constitution”) and being eligible, each offers himself for re-election pursuant to Regulation 84 of the
Constitution (see Note 4):
(1) Teo Siong Seng
(2) Tham Sai Choy
(3) Loh Chin Hua
To re-elect Mr Shirish Apte, who being appointed by the board of Directors after the last annual general meeting of the
Company (“AGM”), will retire in accordance with Regulation 82(a) of the Constitution and being eligible, offers himself
for re-election (see Note 4).
Resolution 3
Resolution 4
Resolution 5
Resolution 6
To approve the sum of up to S$2,491,000 as directors’ fees for the year ending 31 December 2022 (2021: S$2,166,634)
(see Note 5).
Resolution 7
To re-appoint PricewaterhouseCoopers LLP as the auditors of the Company, and authorise the directors of the Company
(“Directors”) to fix their remuneration.
Resolution 8
Special Business
To consider and, if thought fit, approve with or without any modifications, the following ordinary resolutions:
7.
That pursuant to Section 161 of the Companies Act 1967 (the “Companies Act”), authority be and is hereby given to the
Directors to:
Resolution 9
(1)
(a)
issue shares in the capital of the Company (“Shares”), whether by way of rights, bonus or otherwise, and
including any capitalisation 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
(b) 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”),
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may
in their absolute discretion deem fit; and
(2)
(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 while the authority was in force;
Annual Report 2021
OTHER INFORMATION
236
NOTICE OF ANNUAL GENERAL MEETING AND CLOSURE OF BOOKS
provided that:
(i)
(ii)
(iii)
(iv)
the aggregate number of Shares to be issued pursuant to this Resolution (including Shares to be issued in
pursuance of Instruments made or granted pursuant to this Resolution and any adjustment effected under
any relevant Instrument) shall not exceed fifty (50) per cent. of the total number of issued Shares (excluding
treasury Shares and subsidiary holdings) (as calculated in accordance with sub-paragraph (ii) below), of which
the aggregate number of Shares to be issued other than on a pro rata basis to shareholders of the Company
(including Shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution and
any adjustment effected under any relevant Instrument) shall not exceed five (5) per cent. of the total number
of issued Shares (excluding treasury Shares and subsidiary holdings) (as calculated in accordance with sub-
paragraph (ii) below);
(subject to such manner of calculation as may be prescribed by the Singapore Exchange Securities Trading
Limited (“SGX-ST”)) for the purpose of determining the aggregate number of Shares that may be issued under
sub-paragraph (i) above, the percentage of issued Shares shall be calculated based on the total number of issued
Shares (excluding treasury Shares and subsidiary holdings) at the time this Resolution is passed, after adjusting
for:
(a)
new Shares arising from the conversion or exercise of convertible securities or share options or vesting of
share awards which are outstanding or subsisting as at the time this Resolution is passed; and
(b)
any subsequent bonus issue, consolidation or sub-division of Shares;
and in sub-paragraph (i) above and this sub-paragraph (ii), “subsidiary holdings” has the meaning given to it in the
listing manual of the SGX-ST (“Listing Manual”);
in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the
Companies Act, the Listing Manual (unless such compliance has been waived by the SGX-ST) and the Constitution
for the time being in force; and
(unless revoked or varied by the Company in a general meeting) the authority conferred by this Resolution shall
continue in force until the conclusion of the next AGM of the Company or the date by which the next AGM is
required by law to be held, whichever is the earlier (see Note 6).
8.
That:
(1)
for the purposes of the Companies Act, the exercise by the Directors 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 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 as they consider fit, which scheme(s) shall satisfy all
the conditions prescribed by the Companies Act;
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 pursuant to the Share Purchase Mandate may be exercised by the Directors at any time and from time
to time during the period (“Relevant Period”) commencing from the date of the passing of this Resolution and
expiring on the earliest of:
(a)
the date on which the next AGM of the Company is held;
(b)
the date on which the next AGM of the Company is required by law to be held; or
(c)
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;
Resolution 10
Keppel Corporation Limited
OTHER INFORMATION
237
(3)
in this Resolution:
“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 purchases or acquisitions
of Shares are made and deemed to be adjusted for any corporate action that occurs during the relevant five-day
period and the day on which the purchases or acquisitions are made, or in the case of Off-Market Purchases, the
date on which the Company makes an offer for the purchase or acquisition of Shares from holders of Shares,
stating therein the relevant terms of the equal access scheme for effecting the Off-Market Purchase;
“Maximum Limit” means that number of issued Shares representing five (5) per cent. of the total number of
issued Shares as at the date of the passing of this Resolution, unless the Company has at any time during the
Relevant Period reduced its share capital by a special resolution under Section 78C of the Companies Act, or
the court has, at any time during the Relevant Period, made an order under Section 78I of the Companies Act
confirming the reduction of share capital of the Company, in which event the total number of issued Shares shall
be taken to be the total number of issued Shares as altered by the special resolution of the Company or the order
of the court, as the case may be. Any Shares which are held as treasury Shares and any subsidiary holdings will
be disregarded for purposes of computing the five (5) per cent. limit;
“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
shall not exceed, whether pursuant to a Market Purchase or an Off-Market Purchase, 105 per cent. of the Average
Closing Price; and
“subsidiary holdings” has the meaning given to it in the Listing Manual; and
(4)
the Directors 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, he or she 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 7).
9.
That:
Resolution 11
(1)
(2)
(3)
(4)
approval be and is hereby given, for the purposes of Chapter 9 of the Listing Manual, for the Company, its
subsidiaries and target associated companies (as defined in Appendix 2 to this Notice of AGM (“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”);
the IPT Mandate shall, unless revoked or varied by the Company in general meeting, continue in force until the
date that the next AGM 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 which may be prescribed by the SGX-ST from
time to time; and
the Directors 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, he or she 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 8).
To transact such other business which can be transacted at this AGM.
Annual Report 2021
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NOTICE OF ANNUAL GENERAL MEETING AND CLOSURE OF BOOKS
NOTICE IS ALSO HEREBY GIVEN THAT the Share Transfer Books and the Register of Members of the Company will be closed on 29 April
2022 at 5.00 p.m., for the preparation of dividend warrants. Duly completed transfers of Shares received by the Company’s Share Registrar,
Boardroom Corporate & Advisory Services Pte Ltd, at 1 HarbourFront Avenue Keppel Bay Tower #14-03/07 Singapore 098632 up to 5.00 p.m. on
29 April 2022 will be registered to determine shareholders’ entitlement to the proposed final dividend. Shareholders whose securities accounts
with The Central Depository (Pte) Limited are credited with Shares as at 5.00 p.m. on 29 April 2022 will be entitled to the proposed final dividend.
The proposed final dividend if approved at this AGM will be paid on 12 May 2022.
BY ORDER OF THE BOARD
Caroline Chang/Kenny Lee
Company Secretaries
Singapore, 31 March 2022
Keppel Corporation Limited
OTHER INFORMATION 239
Notes:
1. This AGM is being convened and will be held by electronic means in accordance with the COVID-19 (Temporary Measures) (Alternative Arrangements for Meetings for
Companies, Variable Capital Companies, Business Trusts, Unit Trusts and Debenture Holders) Order 2020. This Notice of AGM will be sent to members by electronic means via
publication on the Company’s website at https://www.kepcorp.com/en/investors/agm-egm and the SGXNet. Printed copies of this Notice of AGM will also be sent to members.
2. Shareholders should take note of the following alternative arrangements that have been put in place to allow shareholders to participate in the AGM:
(a) Live Audio-visual Webcast/Live Audio-only Stream: The AGM will be conducted by way of electronic means and there will be no personal attendance at the AGM. The
proceedings of the AGM will be broadcast via a live audio-visual webcast or live audio-only stream.
(b) Pre-registration: Shareholders as well as investors who hold shares of the Company through the Central Provident Fund (“CPF”) or the Supplementary Retirement
Scheme (“SRS” and such investors, “CPF/SRS Investors”) who wish to follow the proceedings of the AGM through the live audio-visual webcast or live audio-only stream
must pre-register online at https://www.kepcorp.com/en/agm2022 (the “Pre-registration Page”) from now until 3.00 p.m. on 19 April 2022 (being 72 hours before the
time appointed for the holding of the AGM) to enable the Company to verify their status as shareholders.
A corporate shareholder which has authorised an individual to act as its corporate representative to attend, speak, and vote at the AGM must similarly pre-register such
individual via the Pre-registration Page and submit the requisite certificate of appointment (or other documentation required by the Company).
Following successful verification, an email containing instructions on how to join the live broadcast of the AGM proceedings, including user ID and password details,
as well as the link to access the live audio-visual webcast and a toll-free telephone number to access the live audio-only stream of the AGM proceedings will be sent to
authenticated persons before the AGM (the “Confirmation Email”). Shareholders who do not receive the Confirmation Email by 5.00 p.m. on 21 April 2022 but have pre-
registered for the AGM proceedings by the deadline of 3.00 p.m. on 19 April 2022, should contact the Share Registrar of the Company, Boardroom Corporate & Advisory
Services Pte Ltd (the “Share Registrar”), at +65 6536 5355 (Mondays to Fridays, excluding public holidays, from 8.30 a.m. to 5.30 p.m.) or at keppel@boardroomlimited.
com immediately.
Investors holding shares of the Company through relevant intermediaries (as defined in Section 181 of the Companies Act and such investors, “Investors”) (other than
CPF/SRS Investors) will not be able to pre-register at the Pre-registration Page for the live broadcast of the AGM. Investors (other than CPF/SRS Investors) who wish
to participate in the live broadcast of the AGM should instead contact their relevant intermediary as soon as possible in order to make the necessary arrangements
to participate. The relevant intermediary is required to submit a proxy form annexing the list of proxies, setting out, in respect of each proxy, the name, address, email
address, NRIC/Passport Number and proportion of shareholding (number of shares, class of shares and percentage) in relation to which the proxy has been appointed.
to the Share Registrar, via email to keppel@boardroomlimited.com no later than 3.00 p.m. on 19 April 2022.
(c) Submission of Questions: All Shareholders (including CPF/SRS Investors) may submit questions relating to the business of the AGM in advance of, or live at, the AGM.
Submission of Questions in Advance: All Shareholders (including CPF/SRS Investors) can submit questions relating to the business of the AGM up till 3.00 p.m. on 12
April 2022 (“Q&A Submission Deadline”) in the following manner:
(i)
via the Pre-registration Page;
(ii) via email to investor.relations@kepcorp.com; or
(iii) by post addressed to the Share Registrar, Boardroom Corporate & Advisory Services Pte Ltd, at 1 HarbourFront Avenue Keppel Bay Tower #14-07 Singapore 098632.
When sending in questions, the following details should be provided for verification purposes: the Shareholder’s full name, address, telephone number and email
address, and the manner in which such Shareholder holds shares in the Company (e.g. if you hold shares of the Company directly, please provide your CDP account
number; otherwise, please state if you hold shares of the Company through CPF or SRS).
Shareholders (including CPF/SRS Investors) are strongly encouraged to submit questions electronically by the Pre-registration Page or email.
Submission of Questions Live at the AGM: All Shareholders (including CPF/SRS Investors) who have pre-registered for the AGM may also ask questions relating to
the business of the AGM live at the AGM, by typing in and submitting their questions through the live chat function via the audio- visual webcast platform. Shareholders
(including CPF/SRS Investors) will not be able to ask questions live at the AGM via the audio-only stream of the AGM proceedings.
Addressing Questions: The Company will endeavour to address all substantial and relevant questions relating to the business of the AGM received from Shareholders
(i) prior to the Q&A Submission Deadline, through publication on the SGXNet and the Company’s corporate website at https://www.kepcorp.com/en/investors/agm-
egm by 3.00 p.m. on 16 April 2022, and (ii) after the Q&A Submission Deadline or live at the AGM, during the AGM. Where substantially similar questions are received,
the Company will consolidate such questions and consequently, not all questions may be individually addressed.
(d) Voting at AGM: Shareholders (excluding Investors) who wish to vote at the AGM may:
(i)
(where such shareholders are individuals) vote live at the AGM; or
(ii)
(where such shareholders are individuals or corporates):
(A) appoint a proxy(ies) (other than the Chairman) to attend, speak and vote at the AGM on their behalf; or
(B) appoint the Chairman as proxy to attend, speak and vote at the AGM on their behalf.
Shareholders (excluding Investors) who wish to vote live at the AGM by themselves or through their proxies must first pre-register themselves or their proxy(ies) online
at the Pre-registration Page. For the avoidance of doubt, pre-registration is not required if a shareholder only intends to appoint the Chairman as proxy and does not
intend to attend the AGM.
In addition, a corporate shareholder which has authorised an individual to act as its corporate representative to attend, speak, and vote at the AGM must similarly pre-
register such individual via the Pre-registration Page and submit the requisite certificate of appointment (or other documentation required by the Company).
Specific voting instructions to be given: Where a Shareholder (whether an individual or corporate) appoints a proxy(ies) (including the Chairman) to attend, speak and
vote at the AGM on his/her/its behalf, he/she/it should give specific instructions as to voting, or abstentions from voting, in respect of the resolutions in the Proxy Form.
Where a Shareholder appoints the Chairman as proxy and no specific instructions as to voting, or abstentions from voting, are given, the appointment of the Chairman
as proxy for such resolution will be treated as invalid.
Submission of Proxy Forms: Shareholders who wish to appoint a proxy(ies) or the Chairman as proxy to attend, speak and vote at the AGM on their behalf must submit
a Proxy Form for the appointment of such proxy(ies). A proxy need not be a member of the Company. The Proxy Form must be submitted to the Company in the
following manner:
(i)
via post to the office of the Share Registrar at 1 Harbourfront Avenue Keppel Bay Tower #14-07 Singapore 098632; or
(ii) via email to keppel@boardroomlimited.com (e.g. enclosing a clear scanned completed and signed Proxy Form in PDF),
in either case to be received no later than 3.00 p.m. on 19 April 2022 (being 72 hours before the time appointed for the holding of the AGM).
A Shareholder who wishes to submit a Proxy Form must first complete and sign the Proxy Form, before submitting it by post to the address provided above, or before
scanning and sending it by email to the email address provided above. Proxy Forms can be downloaded from the Company’s website at https://www.kepcorp.com/en/
investors/agm-egm or the SGXNet.
In the case of Shareholders whose shares in the Company are entered against their names in the Depository Register, the Company may reject any Proxy Form
submitted if such Shareholders are not shown to have shares in the Company entered against their names in the Depository Register (as defined in Part 3AA of the
Securities and Futures Act 2001) as at 72 hours before the time appointed for holding the AGM, as certified by the CDP to the Company.
Shareholders are strongly encouraged to submit completed Proxy Forms electronically by email.
Annual Report 2021
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NOTICE OF ANNUAL GENERAL MEETING AND CLOSURE OF BOOKS
Voting by Investors (including CPF/SRS Investors): The Proxy Form is not valid for use by Investors (including CPF/SRS Investors) and shall be ineffective for all intents
and purposes if used or purported to be used by them.
CPF/SRS Investors who wish to vote live at the AGM must pre-register themselves online at the Pre-registration Page from now until 3.00 p.m. on 19 April 2022 (being
72 hours before the time appointed for the holding of the AGM) to enable the Company to verify their status. CPF/SRS Investors may vote live at the AGM only if they
have been duly appointed as proxies by their respective CPF Agent Banks or SRS Operators. Alternatively, they may approach their respective CPF Agent Banks or SRS
Operators to appoint the Chairman as proxy to attend, speak and vote on their behalf at the AGM. CPF/SRS Investors must approach their respective CPF Agent Banks
or SRS Operators to submit their voting instructions by 5.00 p.m. on 12 April 2022.
Investors (other than a CPF/SRS Investor) who wish to vote at the AGM should approach their respective relevant intermediaries as soon as possible to specify their
voting instructions or make the necessary arrangement to be appointed as proxy.
Shareholders should note that the manner of conduct of the AGM may be subject to further changes at short notice. Shareholders are advised to check the Company’s
website at https://www.kepcorp.com/en/investors/agm-egm and the SGXNet regularly for updates.
3. All documents (including the Annual Report 2021, Proxy Form, this Notice of AGM and appendices to this Notice of AGM) or information relating to the business of this
AGM have been, or will be, published on SGXNet and/or the Company’s website at https://www.kepcorp.com/en/investors/agm-egm. Members and Investors are advised
to check SGXNet and/or the Company’s website regularly for updates.
4. Detailed information on these directors can be found in the “Board of Directors” section of the Annual Report 2021.
Mr Teo Siong Seng will, upon his re-election, continue to serve as a non-executive and non-independent Director, and Chairman of the Board Safety Committee. Mr Teo is
an Executive Director of Pacific International Lines Pte Ltd (PIL), one of the largest shipowners and operators in Southeast Asia with a focus on Asia-Africa and the Middle
East. He is also the Chairman and CEO of PIL’s listed subsidiary in Hong Kong, Singamas Container Holdings Ltd. Mr Teo is currently the Honorary President of the Singapore
Chinese Chamber of Commerce & Industry, a Director of Business China, and Honorary Consul of The United Republic of Tanzania in Singapore. He is an independent
non-executive Director of Wilmar International Limited, COSCO Shipping Holdings and COSCO Shipping Energy Transportation. Mr Teo was also a Nominated Member of
Parliament of Singapore from 2009 to 2014.
Mr Tham Sai Choy will, upon his re-election, continue to serve as a non-executive and independent Director, and Chairman of the Audit Committee and member of the Board
Risk Committee. Mr Tham is currently the Chairman of EM Services Pte Ltd and serves on the boards of Keppel Offshore & Marine Ltd, Nanyang Polytechnic, the Singapore
International Arbitration Centre, DBS Group Holdings Limited, and Mount Alvernia Hospital. Mr Tham was Managing Partner of KPMG Singapore and then Chairman of
KPMG Asia Pacific before he retired from professional practice as a chartered accountant in 2017. He was for many years a member of KPMG’s global board, and had served
on its executive committee and risk committee, and chaired its compensation and nominations committee. In his 36 years of professional practice, Mr Tham had worked
with many of Singapore’s multinational companies in their audits and in other consultancy work.
Mr Loh Chin Hua will, upon his re-election, continue to serve as an executive director, and member of the Board Safety Committee Mr Loh is the Chief Executive Officer
of the Company, and also Chairman of several companies within the Keppel Group. Mr Loh joined the Keppel Group in 2002 and founded Alpha Investment Partners, the
Group’s private fund management arm, where he served as Managing Director for 10 years. Before this, he was the Managing Director at Prudential Investment Inc, leading
its Asian real estate fund management business. Mr Loh began his career with the Government of Singapore Investment Corporation (GIC), where he held key appointments
in its Singapore, San Francisco and London offices. Beyond Keppel, Mr Loh is a Board Member of the Singapore Economic Development Board, a member of the Board of
Trustees of the National University of Singapore, and a Board Member of EDB Investments Pte Ltd.
Mr Shirish Apte will, upon his re-election, continue to serve as a non-executive and independent Director, and member of the Audit Committee and Board Risk Committee. Mr
Apte is currently the non-executive Chairman of Pierfront Capital Fund Management Pte. Ltd., Fullerton India Credit Company Limited and Aviva Financial Advisers Pte. Ltd.
and a director of Keppel Infrastructure Holdings Pte. Ltd, and the Commonwealth Bank of Australia. Prior to his retirement in 2014, Mr Apte had built up 32 years of financial
services experience, holding various senior roles within Citigroup, including Chairman of Asia Pacific Banking, Regional CEO of Asia Pacific, Regional CEO of Europe, Middle
East & Africa, and Country Head of Citibank Poland. His responsibilities included corporate banking, investment banking and risk management.
5. Resolution 7 is to approve the payment of Directors’ fees for the non-executive Directors of the Company during FY2022. The amount of fees has been computed taking
into consideration the number of board committee representations by the non-executive directors and also caters for additional fees (if any) which may be payable due
to the formation of additional Board Committees, or additional Board or Board Committee members being appointed in FY2022. In the event that the amount proposed is
insufficient, approval will be sought at the next AGM in the financial year ending 31 December 2023 (“2023 AGM”) before any payments are made to non-executive Directors
for the shortfall. If approved, each of the non-executive Directors (including the Chairman) will receive 70% of his/her total Directors’ fees in cash (“Cash Component”) and
30% in the form of Shares (“Remuneration Shares”) (both amounts subject to adjustment as described below). The Cash Component is intended to be paid half-yearly in
arrears. The Remuneration Shares are intended to be paid after the 2023 AGM has been held. The actual number of Remuneration Shares, to be purchased from the market
on the first trading day immediately after the date of the 2023 AGM provided that it does not fall within any applicable restricted period of trading (“2023 Trading Day”) for
delivery to the respective non-executive Directors, will be based on the market price of the Shares on the SGX-ST on the 2023 Trading Day. In the event that the first trading
day after the date of the 2023 AGM falls within a restricted period of trading, the Remuneration Shares will be purchased on the first trading day immediately after the end
of the restricted period of trading. The actual number of Remuneration Shares will be rounded down to the nearest thousand and any residual balance will be paid in cash.
The Remuneration Shares will rank pari passu with the then existing issued Shares. A non-executive director who steps down before the payment of the share component
will receive all of his Directors’ fees for FY2022 (calculated on a pro-rated basis, where applicable) in cash.
Details of the Directors’ remuneration for FY2021 are set out on page 90 of the Annual Report 2021. The non-executive Directors will abstain from voting, and will procure
that their respective associates abstain from voting, in respect of Resolution 7.
6. Resolution 9 is to empower the Directors from the date of this AGM until the date of the next AGM to issue Shares and Instruments in the Company, up to a number not
exceeding 50 per cent. of the total number of Shares (excluding treasury Shares and subsidiary holdings) (with a sub-limit of 5 per cent. of the total number of Shares
(excluding treasury Shares and subsidiary holdings) in respect of Shares to be issued other than on a pro rata basis to shareholders). The 5 per cent. sub-limit for non-pro
rata issues is lower than the 20 per cent. sub-limit allowed under the Listing Manual. For the purpose of determining the total number of Shares (excluding treasury Shares
and subsidiary holdings) that may be issued, the percentage of issued Shares shall be based on the total number of issued Shares (excluding treasury Shares and subsidiary
holdings) at the time that this Resolution is passed, after adjusting for new Shares arising from the conversion or exercise of any convertible securities or share options or
vesting of share awards which were issued and are outstanding or subsisting at the time that Resolution 9 is passed, and any subsequent bonus issue, consolidation or
sub-division of Shares.
7. Resolution 10 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 AGM
of the Company on 23 April 2021. At this AGM, the Company is seeking a “Maximum Limit” of 5 per cent. of the total number of issued Shares, which is lower than the 10 per
cent. limit allowed under the Listing Manual. Please refer to Appendix 1 to this Notice of AGM for details.
8. Resolution 11 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. Please refer to Appendix 2 to this Notice of AGM for details.
9. Any reference to a time of day is made by reference to Singapore time.
10. Personal Data Privacy:
By submitting an instrument appointing proxy(ies), and/or representative(s) to attend, speak and vote at the AGM or any adjournment thereof, a Shareholder (i) consents to
the collection, use and disclosure of the Shareholder’s personal data by the Company (or its agents or service providers) for the purpose of the processing, administration
and analysis by the Company (or its agents or service providers) of proxies and representatives appointed for the AGM (including any adjournment thereof), his/her/its
participation in the broadcast and proceedings of the AGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and
record of questions asked and other documents relating to the AGM (including any adjournment thereof), and in order for the Company (or its agents or service providers)
to comply with any applicable laws, listing rules, regulations and/or guidelines (“Purposes”) and (ii) represents and warrants that he/she/it has obtained the prior consent of
the individuals appointed as proxy(ies) and/or representatives for the collection, use and disclosure by the Company (or its agents or service providers) of the personal data
of such individuals by the Company (or its agents or service providers) for the Purposes.
In the case of a Shareholder who is a relevant intermediary, by submitting the consolidated list of participants set out in Note (2)(b) of this Notice of AGM, such Shareholder
represents and warrants that it has obtained the prior consent of the individuals for the collection, use and disclosure by the Company (or its agents or service providers) of
the personal data of such individuals by the Company (or its agents or service providers) for the Purposes.
Keppel Corporation Limited
OTHER INFORMATION
CORPORATE INFORMATION
241
BOARD OF DIRECTORS
Danny Teoh (Chairman)
Loh Chin Hua (Chief Executive Officer)
Till Vestring (Lead Independent Director)
Veronica Eng
Jean-François Manzoni
Teo Siong Seng
Tham Sai Choy
Penny Goh
Shirish Apte
AUDIT COMMITTEE
Tham Sai Choy (Chairman)
Veronica Eng
Penny Goh
Shirish Apte
NOMINATING COMMITTEE
Jean-François Manzoni (Chairman)
Danny Teoh
Till Vestring
BOARD RISK COMMITTEE
Veronica Eng (Chairman)
Tham Sai Choy
Penny Goh
Shirish Apte
BOARD SAFETY COMMITTEE
Teo Siong Seng (Chairman)
Danny Teoh
Loh Chin Hua
REMUNERATION COMMITTEE
Till Vestring (Chairman)
Danny Teoh
Jean-François Manzoni
COMPANY SECRETARIES
Caroline Chang
Kenny Lee
REGISTERED OFFICE
1 HarbourFront Avenue
#18-01 Keppel Bay Tower
Singapore 098632
Telephone: (65) 6270 6666
Facsimile No.: (65) 6413 6391
Email: keppelgroup@kepcorp.com
Website: www.kepcorp.com
SHARE REGISTRAR
Boardroom Corporate & Advisory
Services Pte Ltd
1 HarbourFront Avenue
#14-07 Keppel Bay Tower
Singapore 098632
AUDITORS
PricewaterhouseCoopers LLP
Public Accountants and Chartered
Accountants
7 Straits View
Marina One East Tower
Level 12
Singapore 018936
Audit Partner: Lam Hock Choon
Year appointed: 2021
Annual Report 2021
OTHER INFORMATION 242
FINANCIAL CALENDAR
FY 2021
Financial year-end
Announcement of 2021 1Q Business Updates
Announcement of 2021 half year results
Announcement of 2021 3Q Business Updates
Announcement of 2021 full year results
Despatch of Annual Report to Shareholders
Annual General Meeting
2021 Proposed final dividend
Books closure date
Payment date
FY 2022
Financial year-end
Announcement of 2022 1Q Business Updates
Announcement of 2022 half year results
Announcement of 2022 3Q Business Updates
Announcement of 2022 full year results
31 December 2021
22 April 2021
29 July 2021
28 October 2021
27 January 2022
31 March 2022
22 April 2022
5.00 p.m., 29 April 2022
12 May 2022
31 December 2022
21 April 2022
28 July 2022
27 October 2022
26 January 2023
Keppel Corporation Limited
OTHER INFORMATION PROXY FORM
eppel
Corporation
Keppel Corporation Limited
Company Registration No. 196800351N
(Incorporated in the Republic of Singapore)
ANNUAL GENERAL MEETING
IMPORTANT
1.
This AGM (as defined below) will be held by electronic means in accordance with the COVID-19
(Temporary Measures) (Alternative Arrangements for Meetings for Companies, Variable Capital
Companies, Business Trusts, Unit Trusts and Debenture Holders) Order 2020. The Notice of AGM
and this proxy form will be sent to shareholders (“Shareholders”) of the Company (as defined below)
by electronic means via publication on the Company’s website at https://www.kepcorp.com/en/
investors/agm-egm and the SGXNet. Printed copies of the Notice of AGM and this proxy form will
also be sent to Shareholders.
Alternative arrangements relating to attendance at the AGM by way of electronic means (including
arrangements by which the meeting can be electronically accessed via live audio-visual webcast or
live audio-only stream), submission of questions to the Chairman (as defined below)) in advance of or
live at the AGM, addressing of substantial and relevant questions at the AGM and voting at the AGM,
are set out in the Notice of AGM and the announcement by the Company dated 31 March 2022.
There will be no personal attendance at the AGM. Shareholders (excluding Investors (as defined
below)) who wish to vote at the AGM may:
(a)
(b)
(where such shareholders are individuals) vote live at the AGM; or
(where such shareholders are individuals or corporates): (i) appoint a proxy(ies) (other than the
Chairman) to attend, speak and vote at the AGM on their behalf; or (ii) appoint the Chairman as
proxy to attend, speak and vote at the AGM on their behalf. A proxy need not be a member of
the Company.
This proxy form is not valid for use by investors holding shares in the Company (“Shares”) through
relevant intermediaries (as defined in Section 181 of the Companies Act 1967 and such investors,
“Investors”) (including investors holding through the Central Provident Fund (“CPF”) and the
Supplementary Retirement Scheme (“SRS” and such investors, “CPF/SRS Investors”)) and shall be
ineffective for all intents and purposes if used or purported to be used by them. An Investor (including
a CPF/SRS Investor) who wishes to vote should refer to the instructions set out in Notice of AGM and
the announcement by the Company dated 31 March 2022.
Personal Data Privacy: By submitting this proxy form, the Shareholder accepts and agrees to the
personal data privacy terms set out in the Notice of AGM.
Please read the notes overleaf which contain instructions on, inter alia, the appointment of proxy
to attend, speak and vote at the AGM.
2.
3.
4.
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I/We ____________________________________________________________(Name(s)) __________________________ (NRIC/Passport Number/Co Reg Number)
of __________________________________________________________________________________________________________________________________ (Address)
being a member or members of KEPPEL CORPORATION LIMITED (the “Company”) hereby appoint
Name
Address
NRIC/Passport Number
and/or (delete as appropriate)
Name
Address
NRIC/Passport Number
Proportion of Shareholdings
(Ordinary Shares)
%
No. of Shares
Proportion of Shareholdings
(Ordinary Shares)
%
No. of Shares
or failing him/her, or if no persons are named above, the Chairman of the Annual General Meeting (“Chairman”), as my/our proxy or proxies to
attend, speak and vote on my/our behalf at the 54th Annual General Meeting of the Company (“AGM”) to be held by way of electronic means on
Friday, 22nd April 2022 at 3.00 p.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the resolutions to
be proposed at the meeting as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies (except where the Chairman
is appointed as my/our proxy) will vote or abstain from voting at his/her/their discretion on any matter arising at the meeting and at any
adjournment thereof. In the absence of specific directions in respect of a resolution, the appointment of the Chairman as my/our proxy for
that resolution will be treated as invalid.
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For *
Against *
Abstain *
Resolutions
Ordinary Business
1. Adoption of Directors’ Statement and Audited Financial Statements
2. Declaration of Dividend
3. Re-election of Teo Siong Seng as Director
4. Re-election of Tham Sai Choy as Director
5. Re-election of Loh Chin Hua as Director
6. Re-election of Shirish Apte as Director
7. Approval of fees to non-executive Directors for FY2022
8. Re-appointment of Auditors
Special Business
9.
10. Renewal of Share Purchase Mandate
11. Renewal of Shareholders’ Mandate for Interested Person Transactions
Issue of additional shares and convertible instruments
*
You may tick (4) within the relevant box to vote for or against, or abstain from voting, in respect of all your Shares for each resolution. Alternatively, you may indicate the
number of Shares that you wish to vote for or against, and/or abstain from voting, for each resolution in the relevant box.
Dated this _________________ day of ____________________________ 2022
Total Number of
Shares held
Signature(s) or Common Seal of Member(s)
Important: Please read the notes overleaf before completing this Proxy Form.
Glue all sides firmly. Stapling and spot sealing are disallowed.
Notes:
1. A Shareholder should insert the total number of Shares held in the proxy form. If a Shareholder only has Shares entered against his/her/its name in the Depository Register
(as defined in Part 3AA of the Securities and Futures Act 2001), he/she/it should insert that number of Shares. If he/she/it only has Shares registered in his/her/its name in
the Register of Members, he/she/it should insert that number of Shares. However, if he/she/it has Shares entered against his/her/its name in the Depository Register and
Shares registered in his/her/its name in the Register of Members, he/she/it should insert the aggregate number of Shares entered against his/her/its name in the Depository
Register and registered in his/her/its name in the Register of Members. If no number is inserted, the proxy form shall be deemed to relate to all the Shares held by the
Shareholder (in both the Register of Members and the Depository Register).
2.
(a) A Shareholder entitled to attend, speak and vote at a meeting of the Company, and who is not a relevant intermediary, is entitled to appoint one or two proxies to attend,
speak and vote instead of him/her/it. Where a Shareholder appoints two proxies, the proportion of the shareholding concerned to be represented by each proxy shall be
specified in the proxy form. If no percentage is specified, the first named proxy shall be deemed to represent 100 per cent of the shareholding and the second named
proxy shall be deemed to be an alternate to the first named proxy.
(b) A Shareholder who is a relevant intermediary is entitled to appoint more than two proxies to attend and vote at a meeting of the Company, but each proxy must be
appointed to exercise the rights attached to a different Share or Shares held by such Shareholder. Where more than one proxy is appointed, the number and class of
Shares in relation to which each proxy has been appointed shall be specified in the proxy form. In relation to a relevant intermediary who wishes to appoint more than
two proxies, it should annex to the proxy form the list of proxies, setting out, in respect of each proxy, the name, address, email address, NRIC/Passport Number and
proportion of shareholding (number of Shares, class of Shares and percentage) in relation to which the proxy has been appointed. For the avoidance of doubt, Agent
Bank/SRS Operator who intends to appoint CPF/SRS investors as its proxies shall comply with this Note.
Fold along this line (1)
Affix
Postage
Stamp
Keppel Corporation Limited
c/o Boardroom Corporate & Advisory Services Pte Ltd
1 Harbourfront Avenue
Keppel Bay Tower #14-07
Singapore 098632
Fold along this line (2)
3. There will be no personal attendance at the AGM. Shareholders (excluding Investors) who wish to vote at the AGM may:
(a)
(where such shareholders are individuals) vote live at the AGM; or
(b)
(where such shareholders are individuals or corporates):
(i) appoint a proxy(ies) (other than the Chairman) to attend, speak and vote at the AGM on their behalf; or
(ii) appoint the Chairman as proxy to attend, speak and vote at the AGM on their behalf.
Where a Shareholder (whether an individual or corporate) appoints a proxy(ies) (including the Chairman) to attend, speak and vote at the AGM on his/her/its behalf, he/she/
it should give specific instructions as to voting, or abstentions from voting, in respect of the resolutions in the Proxy Form. A proxy need not be a member of the Company.
For more information, please refer to the Notice of AGM and the announcement by the Company dated 31 March 2022.
4. The proxy form must be submitted with the Company in the following manner:
(a)
if submitted by post, be lodged with the Company’s Share Registrar, Boardroom Corporate & Advisory Services Pte Ltd, at 1 HarbourFront Avenue Keppel Bay Tower
#14-07 Singapore 098632; or
(b)
if submitted electronically, be submitted via email to keppel@boardroomlimited.com,
in either case, by 3:00 p.m. on 19 April 2022, being 72 hours before the time appointed for holding this AGM.
A Shareholder who wishes to submit the proxy form must first complete and sign the proxy form, before submitting it by post to the address provided above, or before
scanning and sending it by email to the email address provided above.
Shareholders are strongly encouraged to submit completed proxy forms electronically by email.
A Shareholder who wishes to appoint a proxy(ies) (other than the Chairman) must, in addition to submitting the proxy form, pre-register his/her/its proxy(ies) online at
https://www.kepcorp.com/en/agm2022 by 3.00 p.m. on 19 April 2022.
5. The proxy form must be under the hand of the appointor or of his/her attorney duly authorised in writing. Where the proxy form is executed by a corporation, it must be
executed either under its seal or under the hand of an officer or attorney duly authorised. Where a proxy form is signed on behalf of the appointor by an attorney, the letter
or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the proxy form, failing which the proxy form may
be treated as invalid.
6. The Company shall be entitled to reject the proxy form if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable
from the instructions of the appointor specified in the proxy form. In addition, in the case of Shareholders whose Shares are entered against their names in the Depository
Register, the Company shall be entitled to reject any proxy form lodged if such Shareholders are not shown to have Shares entered against their names in the Depository
Register as at 72 hours before the time appointed for holding the AGM as certified by The Central Depository (Pte) Limited to the Company.
7. Any reference to a time of day is made by reference to Singapore time.
EDITED AND COMPILED BY
Group Corporate Communications, Keppel Corporation
DESIGNED BY
Black Sun Pte Ltd
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