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Driving
Transformation
Annual Report 2022
Driving
Transformation
Keppel is transforming from a conglomerate
of diverse parts into a leading global
asset manager and operator, with strong
capabilities in energy and environment,
urban development and connectivity.
We are creating solutions that not only
deliver strong value, but also serve a wider
purpose for our stakeholders and the planet,
as we forge a sustainable future together.
Who We Are
A leading global asset manager and operator, creating
solutions for a sustainable future.
Group Overview
Key Figures
Group Financial Highlights
Global Presence
Chairman’s Statement
Interview with the CEO
Vision 2030 in Action
— Highlights of Achievements in 2022
— Focus Areas in 2023
— 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
— Asset Management
— Energy & Environment
— Urban Development
— Connectivity
— Scenario Planning
Financial Review
Group Structure
6
7
8
10
16
22
25
26
28
30
32
38
42
44
46
48
50
52
56
62
66
70
72
81
Governance
Corporate Governance
Risk Management
Regulatory Compliance
Financial Report
Directors’ Statement
Independent Auditor’s Report
Balance Sheets
Consolidated Profit or Loss Account
Consolidated Statement of
Comprehensive Income
Consolidated Statement 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
82
118
122
126
132
140
141
142
143
146
149
218
227
228
233
238
243
244
245
246
252
253
We are Driving
Transformation
Through streamlining our business
and pursuing an asset-light model.
Streamlining and Refocusing Our Business
Building new growth engines and expanding recurring income streams
We have simplified and refocused our business, with the
divestment of Keppel Logistics1 as well as the combination of
Keppel Offshore & Marine with Sembcorp Marine and resolution
of our legacy rigs and associated receivables. Our business units
are also transforming, expanding in areas such as renewables, clean
energy, decarbonisation solutions as well as sustainable urban
renewal, with a focus on growing recurring income.
Seizing Opportunities as OneKeppel
Through an Asset-light Model
Harnessing synergy across business units and tapping third-party
capital to jointly invest in growth engines
We are scaling up in our focus areas, leveraging the collective
strengths of the Group. In 2022, Keppel partnered the private
funds and/or business trust managed by Keppel Capital on several
joint investments into assets and platforms, including onshore
and offshore wind energy assets in Europe, Singapore’s first
hydrogen-ready power plant and a leading South Korean waste
management services company. The joint investments are part
of Keppel’s asset-light model, allowing us to make significant
investments without increasing our gearing significantly.
Recurring Income
Joint Investments
67%
Of FY 2022’s earnings2 or $560 million
comprised recurring income, an increase of
114% from $262 million in FY 2021.
$2.8b
Of energy & environment and sustainable
urban renewal-related investments
announced in 2022, undertaken by Keppel
together with the private funds and/or
business trust managed by Keppel Capital.
Includes Keppel Logistics’ businesses in Singapore, Malaysia, Vietnam and Australia, as well as UrbanFox.
1
2 Excludes discontinued operations.
Taking the next leap forward in our Vision 2030 strategy, we are accelerating the Group’s transformation to be a global asset manager and operator, with strong capabilities in energy and environment, urban development and connectivity, as we create value for investors and contribute to a sustainable future. We are Contributing
to Decarbonisation
Through our strategy of running
our business sustainably and
making sustainability our business.
Running Our Business Sustainably
We have committed to halve Scope 1 and 2 carbon emissions
by 2030, compared to 2020 levels, and achieve net zero by 2050.
We aim for 50% of the Group’s electricity use to be from renewables
by 2025, and 100% by 2030. We are expanding our tracking of
Scope 3 emissions to cover all 15 categories, and are working
with our supply chain and investments to improve energy efficiency
and reduce emissions where possible.
Key decarbonisation initiatives:
• Keppel Land and M1 have announced Science-Based Targets Initiative (SBTi)-validated emission
reduction targets, consistent with the reductions needed to limit global warming to 1.5°C.
• Keppel Infrastructure aims to reduce the emissions intensity of the Group’s power portfolio
and achieve net zero emissions by 2050.
• In 2022, Keppel Capital became a signatory of the United Nations-supported Principles for
Responsible Investing.
• Keppel Data Centres aims to achieve net zero Scope 1 and 2 emissions for all its new data
centre assets in Singapore by 2030.
Making Sustainability Our Business
Net zero commitments by governments and companies are creating
strong demand for renewables, clean energy and decarbonisation
solutions – areas where Keppel has strong capabilities and where
we are creating solutions for a sustainable future.
Key initiatives and achievements in 2022 include:
• Growing Keppel’s renewable energy assets from 1.1 GW at end-2021 to 2.6 GW as at end-20221.
• Commenced the first import of renewable energy into Singapore from Laos.
• Developing Singapore’s first hydrogen-ready power plant.
• Exploring the development of green hydrogen and ammonia projects and large-scale carbon
capture, utilisation and sequestration in Singapore.
• Pivoting Keppel Land from a traditional developer to focus on sustainable urban renewal.
• Exploring innovative proposals to reduce the carbon footprint of data centres, such as floating
data centres and green data centre parks.
• Launched the Keppel Sustainable Urban Renewal Fund.
Commitment to Sustainability
Renewable Energy Portfolio
Net Zero
Halve Scope 1 and 2 carbon emissions by
2030 from 2020 levels, and achieve net
zero by 2050.
2.6 GW1
Grew the Group’s renewable energy
portfolio to 2.6 GW as at end-2022 from
1.1 GW at end-2021.
1 On gross basis and includes projects under development.
Group Overview
Key Figures
Financial Highlights
Revenue1
$6.6b
Comparable with FY 2021.
Higher contributions from the
Asset Management, Energy &
Environment and Connectivity
segments were partly offset by lower
revenue from Urban Development.
Earnings per Share
$0.52
Decreased 7% from FY 2021’s
$0.56 per share.
Net profit of $927 million for FY 2022
translated into earnings per share of $0.52.
Net Gearing Ratio
0.78x
Higher than FY 2021’s net gearing
of 0.68x.
Mainly due to a higher level of investments,
payment of dividends, as well as the
$500 million share buyback programme
which was completed within 2022.
Sustainability Highlights
Return on Equity
8.1%
Decreased by 1.0 percentage point
from FY 2021’s 9.1%.
Return on Equity decreased mainly
due to lower net profit.
Net Asset Value per Share
$6.38
Decreased 0.5% from FY 2021’s
$6.41 per share.
Net Profit
$927m
Decreased 9% from FY 2021’s
net profit of $1.02 billion.
All segments were profitable in FY 2022.
Lower Urban Development earnings were
partly offset by stronger contributions
from the Asset Management and
Energy & Environment segments.
Cash Dividend per Share
33.0 cts
Same as FY 2021.
Total distribution for FY 2022 comprises
a proposed final cash dividend of
18.0 cents per share, and an interim
cash dividend of 15.0 cents per share.
Free Cash Outflow
$408m
Decreased from FY 2021’s inflow of
$1.76 billion.
Mainly due to a lower cash proceeds
from asset monetisation and higher
investments made.
Dow Jones Sustainability Indices
MSCI ESG Rating
Employee Engagement Score
DJSI
Included as a constituent of the Dow Jones
Sustainability World Index (DJSI World)
and the Dow Jones Sustainability
Asia Pacific Index (DJSI Asia Pacific)
in December 2022.
Ranked among the top 10% of the largest
2,500 companies globally and among the
top 20% of the 600 largest companies in
the Asia-Pacific developed region in the
S&P Global Broad Market Index based
on long-term environmental, social,
governance (ESG) and economic criteria.
AAA
Retained the highest AAA rating in the
Morgan Stanley Capital International
(MSCI) ESG ratings in December 2022.
Ranked among the top 8% of global
industrial conglomerates, based on ESG
criteria, in the MSCI All Country World
Index. Keppel has held the rating since
February 2020.
84%
This was higher than Mercer’s
global average of 80%.
88% of employees indicated that
they are proud to work for Keppel.
Employer Awards
Workplace Safety and Health Awards
Contribution to Worthy Causes
11 Awards
Clinched at the WSH Awards 2022.
$4.3m
Contributed to social investment
spending and industry advancement.
Top Employer
In Singapore for fourth consecutive year,
and in China for the first time2.
Also ranked as one of the World’s
Best Employers 2022 by Forbes.
1 Revenue from continuing operations.
2 Certified by Top Employers Institute.
6
Keppel Corporation Limited
Group Overview
Group Financial Highlights
Group Half-Yearly Results ($ million)
Revenue – Continuing operations
EBITDA – Continuing operations
Operating profit – Continuing operations
Profit before tax – Continuing operations
Attributable profit – Continuing operations
Attributable profit/(loss) – Discontinued operations
Attributable profit
Earnings per share (cents)
For the year ($ million)
Revenue – Continuing operations
Profit
EBITDA – Continuing operations
Operating – Continuing operations
Before tax – Continuing operations
Net profit – Continuing operations
Net profit/(Loss) – Discontinued operations
Net profit
Operating cash flow
Free cash flow
Per share ($)
Earnings
Net assets
Net tangible assets
At year end ($ million)
Shareholders’ funds
Perpetual securities
Non-controlling interests
Total equity
Net debt
Net gearing ratio (times)
Return on shareholders’ funds (%)
Profit before tax
Net profit
Shareholders’ value
Distribution (cents per share)
Interim dividend
Final dividend
Total distribution
Share price ($)
Total shareholder return (%)
n.m.f. denotes no meaningful figure.
1H
2022
2H
Total
1H
3,356
3,264
6,620
2,888
457
355
551
434
64
498
27.9
315
210
544
405
24
429
24.2
772
565
1,095
839
88
927
52.1
346
207
565
344
(44)
300
16.5
2021
2H
3,723
1,074
922
1,046
904
(181)
723
39.7
Total
6,611
1,420
1,129
1,611
1,248
(225)
1,023
56.2
2022
2021
% Change
6,620
772
565
1,095
839
88
927
260
(408)
0.52
6.38
5.49
11,178
401
334
11,913
9,238
0.78
10.5
8.1
15.0
18.0
33.0
7.26
49.3
6,611
1,420
1,129
1,611
1,248
(225)
1,023
(352)
1,756
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)
n.m.f
-46
-50
-32
-33
n.m.f.
-9
n.m.f.
n.m.f.
-7
n.m.f
n.m.f
-4
–
-13
-4
10
15
-13
-11
25
-14
–
42
n.m.f.
Annual Report 2022
7
Group Overview
Global Presence
5
6
4
1
2
3
Total FY 2022 Revenue1
$6.6b
Markets outside of Singapore
contributed to about 19% of the Group’s
revenue for FY 2022.
1
2
Asia (Ex Singapore)
$1,079m
Singapore
$5,393m
3
Australia
$58m
• China
• India
• Indonesia
• Japan
• Malaysia
• Myanmar
• The Philippines
• Republic of Korea
• Vietnam
8
Keppel Corporation Limited
4
Middle East
$73m
• Qatar
• The United Arab Emirates
5
6
North America
$4m
• The United States
Europe
$13m
• Azerbaijan
• Belgium
• Finland
• Germany
• Italy
• Luxembourg
• Poland
• Sweden
• The Netherlands
• The United Kingdom
1 Revenue from continuing operations.
Annual Report 2022
9
Group Overview
Chairman’s Statement
Driving
Transformation
We are transforming the
Company to drive growth
and deliver long-term value
to all our stakeholders.
Danny Teoh, Chairman
Dear Shareholders,
2022 was a transformational year for Keppel
as we simplified and focused our business,
and executed our asset-light strategy in line
with the Group’s Vision 2030. We divested
Keppel Logistics1 in mid-2022 and earlier
this year, completed the combination of
Keppel Offshore & Marine (Keppel O&M) with
Sembcorp Marine, and reached a resolution
to our legacy rigs and associated receivables.
Keppel today is a much more streamlined
company, which will focus on delivering
value to our stakeholders as a leading global
asset manager and operator, with strong
operational capabilities in Energy & Environment,
Urban Development and Connectivity. These
are areas in which Keppel has strong expertise
and track records, where we can both create
value for investors, and contribute to global
sustainable development efforts.
Robust Performance
Amidst a volatile international environment,
marked by the war in Ukraine, heightened
geopolitical tensions, slowing global growth,
inflation, and higher interest rates, Keppel
delivered robust performance in FY 2022.
The Group achieved a net profit of $927 million,
bolstered by stronger results in Asset
Management and Energy & Environment,
and Return on Equity (ROE) of 8.1%.
Importantly, recurring income made up
$560 million or 67% of the Group’s earnings2,
an increase of 114% from $262 million in
the preceding year, as the Group continues
to pivot away from an orderbook business
and lumpy property development profits.
In 2022, Keppel delivered Total Shareholder
Returns of 49.3%, driven by the Group’s
transformation and value creation.
Taking into account the Group’s strong
performance, the Board of Directors has
proposed a final cash dividend of 18 cents
per share. Together with the interim cash
dividend of 15 cents per share, we will
be paying out a total cash dividend of
of the legacy rigs to Asset Co, for which we
will be repaid over time, and the out-of-scope
assets, Keppel is unlocking close to
$9.4 billion of value from the offshore &
marine (O&M) transactions.
Growth at Speed and Scale
In last year’s annual report, I mentioned
Keppel’s plans to adopt an asset-light model,
through asset monetisation and leveraging
third-party funds for growth, as well as to
grow in sustainability-related areas such as
renewables, clean energy and decarbonisation
solutions. In 2022, Keppel made good
headway in these areas, which will continue
to be our priorities in the year ahead.
We have made significant progress in asset
monetisation, with over $4.6 billion in asset
monetisation announced by end-December
2022, since the start of the programme in
In FY 2023, Keppel will recognise a disposal gain of
approximately $3.3 billion arising from the combination
of Keppel O&M and Sembcorp Marine. Together with the
vendor notes issued to Keppel from the sale of the legacy
rigs to Asset Co, for which we will be repaid over time,
and the out-of-scope assets, Keppel is unlocking close
to $9.4 billion of value from the O&M transactions.
33 cents per share for the whole of 2022.
This is the same as the total cash dividend
paid for FY 2021.
It does not include the distribution in specie
on 1 March 2023 of approximately 19.1
Sembcorp Marine shares to our shareholders
for every Keppel Corporation share held,
with a value of $2.19 per Keppel Corporation
share3, based on Sembcorp Marine’s
closing price of 11.5 cents per share on
1 March 2023, which is the first trading day
of Sembcorp Marine post combination.
In FY 2023, Keppel will recognise a disposal
gain of approximately $3.3 billion4 arising
from the combination of Keppel O&M and
Sembcorp Marine. Together with the
vendor notes issued to Keppel from the sale
October 2020. Of this amount, $1.6 billion
was announced in 2022, putting us well
on track to exceed the higher end of the
Company’s $3-5 billion target by the end of
2023. The significant capital unlocked would
allow us to invest in growth initiatives as
well as reward shareholders.
Harnessing our asset-light model,
we announced about $2.8 billion worth of
energy & environment and sustainable urban
renewal-related investments in 2022, jointly
undertaken by Keppel together with the
private funds and/or business trust managed
by Keppel Capital. As at the end of 2022,
Keppel Capital has achieved its target of
$50 billion of Assets under Management
(AUM) and will next work towards our
longer-term AUM target of $200 billion.
Includes Keppel Logistics’ businesses in Singapore, Malaysia, Vietnam and Australia, as well as UrbanFox.
1
2 Excludes discontinued operations.
3 This figure of $2.19 is rounded to the nearest two decimal places; calculated based on a division of (i) the cash
equivalent amount of the dividend declared by the Company of $3,845,164,646.11, by (ii) the Company's issued
and paid-up share capital as at the Record Date of 1,751,959,918 KCL Shares (excluding treasury shares).
4 Arising from the Proposed Combination, based on the value of assets and liabilities of Keppel O&M (as Disposal
Group) for the Proposed Combination as of 28 February 2023, the gain on disposal recognised in the profit or
loss on the date of completion is approximately $3,300 million. The gain on disposal is subject to adjustment
for any reimbursement by the Company to Keppel O&M for certain expenditures incurred by Keppel O&M before
the completion of the combination, relating to assets sold by Keppel O&M to Asset Co to the extent that such
expenditures are in excess of an agreed sum.
10
Keppel Corporation Limited
Annual Report 2022
11
Group Overview
Chairman’s Statement
Whether through earning fees from asset management, Energy-as-a-Service or Real Estate-as-a-Service, we are working to grow the Group’s recurring income. (In picture: Keppel Infrastructure
@ Changi, Singapore’s first Green Mark Platinum Positive Energy building under the new and more stringent Green Mark Scheme, houses an intelligent operation nerve centre.)
As we execute Vision 2030 and transform
to be a global asset manager and operator,
Asset Management would not just be a
vertical within the Group, but also a key focus
of who Keppel is and how we create value.
It will be a horizontal that pulls the different
business units together to deliver value as
one integrated company. Tapping third-party
funds would allow the Group to grow at
much higher speed and scale, compared
to just relying on our balance sheet.
Keppel’s business priorities have also evolved,
with a growing focus on sustainability-related
solutions. Key initiatives undertaken in 2022
include commencing Singapore’s first
renewable energy import, developing
Singapore’s first hydrogen-ready power
plant, pivoting our real estate business
towards sustainable urban renewal and
senior living, and launching the Keppel
Sustainable Urban Renewal Fund. In the
Connectivity segment, we are growing our
data centre and subsea cable businesses,
while M1 continues to advance its
transformation into a cloud native
connectivity platform. Whether through
earning fees from asset management,
Energy-as-a-Service or Real Estate-as-a-
Service, we are working to grow the Group’s
recurring income.
We are also seeing greater collaboration and
integration among business units. Horizontal
teams have been established to evaluate
business opportunities for the Group across
verticals, looking at different asset classes
such as real estate, data centres and
infrastructure. From the initial investment
in greenfield or brownfield projects, to
the design and development followed by
operation and maintenance phases, to their
possible injection upon maturity into a REIT
or business trust managed by Keppel,
we can derive multiple earnings streams
from the assets from “cradle to maturity”.
This is a key strength for Keppel and one
which differentiates us from purely financial
investors. In 2022, external revenue from
cross-business unit collaboration across
the Group amounted to about $560 million1,
increasing by about 60% from 2020, when
we launched Vision 2030. We expect this to
continue growing over time, as we deepen
integration as OneKeppel.
We continue to invest in technology and
innovation to drive the Group’s growth.
These include sustainability-related
innovation such as the opening of
Keppel Infrastructure @ Changi, Singapore’s
first Green Mark Platinum Positive Energy
building under the new and more stringent
We are seeing greater collaboration and integration
among business units. Horizontal teams have been
established to evaluate business opportunities for the
Group across verticals, looking at different asset classes
such as real estate, data centres and infrastructure.
Green Mark scheme, and preparing for the
low-carbon economy through exploring green
ammonia and green hydrogen solutions.
We are also investing in digitalisation and
building a data lake as a single source of
truth. With the data in a form that facilitates
analytics as well as automation, we can
improve productivity and customer experience,
perform continuous assurance and audits,
and seize new opportunities through
changing how we serve our customers.
Artificial intelligence and machine learning
can enable us to respond more quickly to
changes in internal and external environments,
and make timely interventions and course
corrections when necessary.
Focus on ESG
During the year, we sharpened our focus on
sustainability with the establishment of the
Board Sustainability and Safety Committee
(BSSC) in May 2022. Sustainability and
safety have been included on the agenda of
the Board’s meeting each quarter and the
role of the former Board Safety Committee
has been subsumed under the BSSC.
We have announced our target to halve the
Group’s Scope 1 and 2 carbon emissions by
2030, compared to 2020 levels, and achieve
net zero by 2050. We continue to make steady
progress towards the target, including through
refocusing our portfolio on sustainability-
related solutions, improving energy efficiency
and harnessing renewables where possible.
We have been tracking how the Group
contributes to the United Nations’ Sustainable
Development Goals since 2016 and are also
implementing the recommendations of the
Task Force on Climate-related Financial
Disclosures. We view sustainability not just
through the lens of compliance or corporate
social responsibility, but also as a source of
opportunities and a way for us to create
value for the Company, as we help our
customers and communities on their
net zero journeys.
In 2022, we continued to advance our safety
journey, including encouraging front-line
staff to speak up when they encounter
any unsafe act or practice, as well as
leveraging technology to digitalise Health,
Safety and Environment (HSE) processes.
1 External revenue from cross-business unit collaboration is an internal management metric that includes share
of economic benefits from joint ventures, associates and certain investments.
Keppel’s business priorities have evolved, with a growing focus on sustainability-related solutions. We are pivoting our real estate business towards sustainable
urban renewal and senior living. (In picture: Keppel Land is entering China’s senior living market with its first assisted-living community in Nanjing City.)
12
Keppel Corporation Limited
Annual Report 2022
13
Group Overview
Chairman’s Statement
Employee Engagement
84%
Keppel’s engagement score in
the 2022 Employee Engagement
Survey, 4% higher than Mercer’s
global average.
Sadly, despite our best efforts, Keppel O&M
suffered three fatalities in two separate
incidents at its Singapore yard. We have
investigated the incidents and put in place
measures to prevent recurrence.
Governance is a key aspect of running our
business responsibly and we are focused
on enhancing corporate governance, as
well as compliance and risk management.
As part of the Board’s commitment to
achieve a good balance of skills, knowledge,
experience as well as diversity among
directors, we welcomed Mr Olivier Blum
and Mr Jimmy Ng as Independent Directors
on the Board with effect from May 2022.
Olivier is the Executive Vice-President of
Schneider Electric’s Energy Management
Business, and was previously Chief Strategy
& Sustainability Officer of the company;
while Jimmy is the Group Chief Information
Officer, as well as Head of Group Technology
& Operations at DBS Bank. Olivier and
Jimmy bring to the Board of Keppel their
wealth of experience and expertise – for
Olivier, in running companies sustainably
and driving sustainability-as-a-business on a
global scale, and for Jimmy, digitalisation as
a corporate strategy – and help ensure that
we have access to the best talent as we
drive the Group’s strategy.
Strong human capital management
is critical to a company’s success.
Our workforce remained highly engaged,
with an engagement score of 84% in the
2022 Employee Engagement Survey,
4% higher than Mercer’s global average.
We continued to invest in training and
development, strengthening succession
planning and deepening staff engagement.
In 2022, our workforce achieved an average
of more than 24 hours of training per
person, higher than our target of 20 hours.
We view sustainability not just through the lens of
compliance or corporate social responsibility, but also
as a source of opportunities and a way for us to create
value for the Company, as we help our customers and
communities on their net zero journeys.
We are committed to fair employment and
have also enhanced efforts to improve the
overall well-being of employees, including
both physical and mental health. To help
employees cope with rising prices, we
implemented a one-off cost of living subsidy
for more junior staff, and also enhanced
the flexible benefits programme for
junior to mid-level staff with effect from
January 2023.
Keppel believes that when our communities
thrive, we thrive. We contribute to society in
different ways, through charitable donations,
community investments, commercial initiatives,
as well as staff volunteerism. In 2022, we
contributed $4.3 million to worthy causes,
including donations made through Keppel
Care Foundation, the Group’s philanthropic
arm. New programmes unveiled in 2022
include a $1 million donation to Dementia
Singapore to be disbursed over three years,
as well as partnerships with different
stakeholders to support sustainability-
related education for the public and
school students. Beyond financial support,
We continued to advance our safety journey, including encouraging front-line staff to speak up when they encounter any
unsafe act or practice, as well as leveraging technology to digitalise Health, Safety and Environment processes.
New initiatives unveiled in 2022 include a $1 million donation to Dementia Singapore to be disbursed over three years.
Keppel’s staff also contributed more than
14,000 hours of volunteer service globally.
In China, Keppel’s staff collaborated with
local organisations to deliver food items
to vulnerable communities during the
COVID-19 related lockdowns, while in
Vietnam, we launched a Living Well
programme to provide clean drinking
water for about 20,000 villagers.
In recognition of our commitment to
corporate governance and sustainability,
Keppel was conferred the Singapore
Corporate Governance award at the
Securities Investors Association (Singapore)’s
Investors’ Choice Awards 2022, for a second
year running. We retained the highest MSCI
AAA ESG rating, which we have held since
early-2020, and were also admitted to the
DJSI World and Asia Pacific indices. We will
continue to enhance corporate governance
and sustainability practices, and aspire to
even higher standards.
Acknowledgements
I would like to express my deep appreciation
to fellow directors for their dedication
and wise counsel, which helped Keppel to
navigate the uncertain global environment
and deliver strong results. I am also grateful
to our shareholders, partners and other
stakeholders for their confidence and
support for Keppel.
In addition, I would like to express
my appreciation to Keppelites around
the world for their many contributions
to the Company. As the combination of
Keppel O&M and Sembcorp Marine has
just been completed on 28 February 2023,
I would also like to take this opportunity
to thank the former directors, management
and staff of Keppel O&M for their
valuable contributions to the Group
over the years.
2023 is an important year for Keppel as
we execute the next stage of the Company’s
transformation and growth to be a leading
global asset manager and operator,
providing solutions for a cleaner and better
world. We will continue to work together
with all stakeholders to create a sustainable
future together.
Yours sincerely,
Danny Teoh
Chairman
2 March 2023
14
Keppel Corporation Limited
Annual Report 2022
15
Group Overview
Interview with the CEO
Accelerating
Vision 2030
We will accelerate Keppel’s evolution
into a global asset manager with
strong operating capabilities,
focused on creating sustainability-
related solutions.
Q How would you sum up the
past year for Keppel?
A 2022 was a transformational and
productive year for Keppel on several counts.
First, we posted a robust set of results
despite challenging macro conditions,
bolstered by stronger earnings in Asset
Management and Energy & Environment.
The Group’s recurring income also more
than doubled year on year, contributing
to 67% of our net profit for FY 2022,
excluding discontinued operations.
Our Energy & Environment segment
saw a marked turnaround, driven mainly
by Keppel Infrastructure’s strong
performance. Asset Management also
recorded an improvement in earnings,
higher fee income, as well as better
operating performance across assets
under the REITs and business trust.
Urban Development’s performance was
impacted by headwinds faced in China,
though we are seeing improvements
in China following the exit from its
zero-COVID stance, as well as the
introduction of more supportive policies
that benefit the real estate sector.
In Vietnam, while there have been delays
in the approvals for new launches,
market fundamentals remain strong,
as seen from the strong demand for
new homes launched.
Our Connectivity segment also did well,
with M1 advancing its transformation
into a cloud native connectivity platform.
M1’s profits grew significantly, with the
recovery in roaming, subscriber growth
and higher revenue from its expanding
enterprise business. Our integrated
data centre business also continued
to grow its portfolio, leveraging our
asset-light model.
Importantly, we have made very good
progress in executing Vision 2030,
simplifying and focusing Keppel’s
business, with the successful
16
Keppel Corporation Limited
Loh Chin Hua, Chief Executive Officer
We have made very good progress in executing Vision 2030,
simplifying and focusing Keppel’s business, with the successful
divestment of Keppel Logistics and Keppel O&M, as well as
the resolution of our legacy rigs and associated receivables.
divestment of Keppel Logistics1 and
Keppel Offshore & Marine (Keppel O&M),
as well as the resolution of our legacy
rigs and associated receivables.
We will accelerate Keppel’s evolution
into a global asset manager with strong
operating capabilities, focused on
creating sustainability-related solutions,
which are seeing strong demand amidst
the growing global focus on sustainable
development and decarbonisation.
Q Can you share more about Keppel’s
transformation journey to be a global
asset manager and operator? What
are the plans for 2023 and beyond?
A Throughout our growth journey, the
Board and management of Keppel have
regularly transformed the Company to
ensure its competitiveness and relevance
in a fast-changing world.
In the past decade, we embarked on
a series of privatisations of our listed
operating units starting with Keppel Land
in 2015, followed by M1 and Keppel
Telecommunications & Transportation.
These allowed us to break down the
silos, simplify our businesses and align
them to the Group’s collective goals as
we forged a OneKeppel culture with all
parts executing on a common strategy.
In line with our efforts to refocus and
streamline the Group, we spun off our
logistics and the offshore & marine
(O&M) businesses, and are doing less of
residential development for sale. We are
moving away from businesses with
lumpy earnings, which are often valued at
discounts to book value, towards those
with recurring income that attract high
multiples. To be clear, logistics, O&M
and residential development are good
businesses, but they may not be the
best fit with Keppel’s Vision 2030, which
sees us focusing on growing recurring
income and building scalable businesses
that fully leverage our asset-light model.
Going forward, we will focus on fast-
tracking Keppel’s transformation from
a conglomerate of diverse parts into an
integrated business – one that harnesses
the Group’s strengths to invest for the
good of current and future generations,
while addressing the pressing challenges
of climate change.
As we advance our ambition to be
a leading global asset manager, our
operating platforms in Energy & Environment,
Urban Development and Connectivity will
remain important pillars and differentiators
for the Group. We will continue to strengthen
our engineering capabilities and technical
know-how, as well as drive innovation and
customer centricity.
1
Includes Keppel Logistics’ businesses in Singapore, Malaysia, Vietnam and Australia, as well as UrbanFox.
Annual Report 2022
17
By tapping on co-investment capital,
as we have done through the sizeable
joint investments undertaken by the Group
in 2022, we can do much more than
what our balance sheet alone allows.
Group Overview
Interview with the CEO
This unique combination of attributes
and capabilities is what investors
appreciate when they invest in
Keppel and the private funds that we
manage. As a trusted investor, which
also has strong operating capabilities
in sustainability-related solutions,
Keppel is a compelling partner for
our investors, customers and
other stakeholders.
Q Can you talk about the progress
of integration in the Group?
A We have made good progress
in realising synergies between
Keppel’s operating units, creating
and capturing value through our
asset-light model.
As an example, our integrated data
centre business, through collaboration
between Keppel Data Centres and
the private funds and REIT managed
by Keppel Capital, generated total
earnings of $66 million for the Group
in FY 2022. Today, most of the new
projects approved by the Group involve
cross-business unit collaboration,
compared to only a small proportion
just a few years ago.
Another strong case-in-point was
the $2.8 billion worth of energy &
environment and sustainable urban
renewal-related investments announced
in 2022, jointly undertaken by Keppel
together with the private funds and/or
business trust managed by Keppel Capital.
This allows us to make large investments
in our focus areas without pushing up
our gearing significantly.
To accelerate the integration of
our value chains, we established the
One Real Estate, One Infrastructure and
One Data Centre teams, comprising
personnel from across the Group’s
operating units to evaluate and
execute on opportunities in their
respective areas.
As we forge ahead with Vision 2030,
and run our business horizontally,
we expect to see overhead costs
reduced and Keppel become even
more nimble in seizing opportunities.
Working as OneKeppel, we will be able
to achieve more with less.
Q Keppel’s recurring income
more than doubled year on year
to $560 million in FY 2022.
What are Keppel’s plans to grow
recurring income further?
A A key tenet and strategy of Vision 2030
is to pivot away from lumpy profits in the
orderbook and property development
business and focus on expanding recurring
income. This is shaping up well for us, as
can be seen from our 2022 results, where
recurring income improved significantly.
The explosion of data is fuelling the
servitisation of businesses, where
industries are moving from traditional
client interactions to more connected,
long-term customer relationships
that are highly personalised. Digital
technologies such as IoT, generative
artificial intelligence, machine learning,
and the host of 5G-enabled wireless
communications are altering the playing
field irrevocably. To succeed in this
fast-changing digital economy,
businesses need to fully leverage and
exploit real-time data generated within
their ecosystems, to analyse and
optimise the use of their assets.
In many ways, these are what Keppel
has been striving to achieve through
the evolution of our operating units
as well as our digitalisation efforts.
Whether it is Keppel Land’s shift to
be an asset-light provider of urban
space solutions, with a focus on
providing Real Estate-as-a-Service;
Keppel Infrastructure’s offering of
Energy-as-a-Service (EaaS), or M1’s
transformation from a traditional telco
into a digital cloud-native platform –
these are all examples of Keppel’s pivot
towards innovative, customer-centric
service models.
The servitisation of our business is
bolstered by our asset-light strategy
and ability to tap third-party funds for
growth. Taken together, these initiatives
will allow the Group to change the nature
of our earnings and significantly expand
our base of recurring fee income.
Increasing digitalisation, including cloud computing, artificial intelligence and the metaverse, is generating demand for the
Group’s connectivity solutions.
18
Keppel Corporation Limited
Q Now that Keppel is very close to its
$5 billion asset monetisation target,
will you set a new target?
A Asset monetisation is a very key part of
our asset-light strategy, providing us
with the wherewithal to pursue our new
growth engines and initiatives under
Vision 2030. As I have said before, we
will not stop once we cross our $5 billion
target in 2023 but will continue to unlock
capital which can be redeployed to seize
new opportunities.
We said in June 2020 that the Group
had identified $17.5 billion of monetisable
assets, based on carrying value. These
did not include our operating platforms,
such as Keppel O&M, from which we
are unlocking a total realisable value
of $9.4 billion, including our Asset Co
vendor notes and out-of-scope assets.
Our goal is to eventually activate all
$17.5 billion of our monetisable assets,
which would not only free up space on
our balance sheet, but enable us to
pursue growth initiatives as well as
reward our shareholders.
Q What are the plans for the legacy
rigs in Asset Co and the out-of-scope
assets? Are you optimistic about
realising value from these assets
in the near term?
A Amidst the strengthening offshore rig
market, we are optimistic that Asset Co
will be able to substantially monetise the
legacy rigs and their associated receivables
over the next few years. We will likewise
be looking out for opportunities to
monetise the approximately $300 million
worth of out-of-scope assets, which are
non-core to Keppel.
Thus far, we have made good progress in
putting our legacy rigs to use. By the end
of 2022, all the available KFELS B Class
jackup rigs in the fleet have secured
bareboat charters, while there have
been active enquiries for the remaining
legacy rigs.
We are also hopeful that with continuing
improvements in the rig market, the
monetisation of the legacy rigs can
take place sooner, leading to an earlier
repayment of the vendor notes issued by
Asset Co to Keppel. The Asset Co vendor
notes come with a coupon rate of 4% that
translates into approximately $170 million
of interest income per annum. We will also
benefit from a redemption premium equal
to 5% of the outstanding principal amount
if and when the vendor notes are redeemed.
Keppel Infrastructure has been bolstering its EaaS offerings with energy optimisation and analytics, and other solutions.
Q How does Keppel look at capital
allocation? Which areas will
receive more focus moving forward,
as you grow Keppel’s AUM?
through the sizeable joint investments
undertaken by the Group in 2022,
we can do much more than what
our balance sheet alone allows.
A We are exploring many exciting investment
opportunities, as we continue to grow
Keppel’s business in line with Vision 2030.
Given Keppel’s track record and
capabilities, we are well placed to
seize opportunities in renewables,
decarbonisation solutions, sustainable
urban renewal and connectivity, which
are supported by macrotrends such as
decarbonisation, digitalisation and the
increasing global focus on climate action.
We have set an ambitious target to grow
our current $50 billion in assets under
management to reach $200 billion
by 2030. So when we think of capital
allocation, we will not just be investing
in areas that we want to grow in per se,
but also areas that global investors
would like to be in. These would include
assets and platforms that provide
solutions which help our customers on
their digitalisation and net zero journeys.
This is where asset management has
a key role to play in helping us achieve
our objectives and scale up our growth
engines. By tapping on co-investment
capital from Keppel Capital’s private
investors, or even the REITs and
business trust, as we have done
Q Keppel is making sustainability
a business. Can you talk about the
Company’s developments in the
areas of renewables, clean energy
and decarbonisation solutions?
A Over the past year, we have made bold
strides in expanding our solutions that
contribute to sustainable development,
building on the Group’s strong domain
knowledge and operational expertise.
We achieved many ‘firsts’, including
commencing Singapore’s first renewable
energy import; the development of the
600 MW Keppel Sakra Cogen Plant,
which will be Singapore’s first hydrogen-
ready and most advanced, high-efficiency
combined cycle gas turbine power plant;
and the opening of Keppel Infrastructure
@ Changi, Singapore’s first Green Mark
Platinum Positive Energy building under
the new and more stringent Green Mark
scheme. We are also gearing up for the
low-carbon economy through exploring
green ammonia and green hydrogen
solutions with international partners.
Keppel Infrastructure has been
bolstering its EaaS offerings with
energy optimisation and analytics,
Annual Report 2022
19
Group Overview
Interview with the CEO
We have identified sustainable urban renewal and senior living as key market segments where Keppel is well placed to compete, and which our investors find attractive.
energy storage, cooling, and electric
vehicle charging solutions. Such services
offer our customers a tangible and
practical pathway to decarbonisation
while minimising upfront costs, thus
expanding the potential for deployment
of low-carbon technologies. Since
Keppel Infrastructure went to market
with its end-to-end EaaS offerings in
late 2021, we have grown our cooling
capacity by 17%. The new EaaS contracts
secured have a weighted average expiry
of 10 years, and contribute to expanding
our recurring income.
We are positioning ourselves to
capture the growing demand for
sustainable infrastructure in Singapore
and the region, with the launch of our
flagship Keppel Core Infrastructure Fund
in 2022 with a target size of US$2.5 billion.
We will also be launching the Keppel Asia
Infrastructure Fund II, following the
success of Fund I, which has been
fully deployed with six quality assets.
Through these efforts, Keppel will be
able to contribute to expediting the
world’s energy transition and
decarbonisation efforts.
Q 2022 was a challenging year for
the China market. What is your
outlook for this key market
in 2023?
A Deleveraging policies, coupled with
the COVID-19 lockdowns, affected
China’s economy over the past year.
Nevertheless, our Urban Development
business performed creditably,
contributing a total of $282 million
to the Group’s net profit in FY 2022.
Our asset monetisation efforts in
China also remained healthy with the
divestment of two projects in Shanghai,
unlocking some $347 million of capital.
As China’s reopening from COVID-19
restrictions continues, many economists
expect the accelerated recovery of
the Chinese economy, underpinned
by stronger domestic demand and
higher GDP growth. In the first two
months of 2023, Keppel Land has
already seen more positive signs,
including an improvement in enquiries
and home sales.
The Chinese authorities have also
announced constructive policies such
as allowing developers more access to
financing and relaxing home ownership
regulations. As market conditions improve,
we expect both home sales and asset
monetisation to gain traction in 2023.
Q Which are some of the key
opportunities that Keppel is
positioning itself to capture
in urban space solutions?
A Building on Keppel’s strong track
record in the real estate business across
key cities in Asia, we see opportunities
to offer Real Estate-as-a-Service to
enhance our relevance in a world
characterised by flexible work
arrangements, climate action and
where digitalisation is redefining the
built environment. We have identified
sustainable urban renewal (SUR) and
senior living as key market segments
where Keppel is well placed to compete,
and which our investors find attractive.
A sizeable share of real estate
development over the next decade is
expected to be based on retrofitting and
repurposing existing buildings, which
are greener, less costly and faster than
new construction, and contribute to the
circular economy. By incorporating smart
and sustainable features into retrofitted
buildings, we can also help enhance the
assets’ performance and value.
The transformation of the 20-year-old
Keppel Bay Tower into Singapore’s
first Green Mark Platinum (Zero Energy)
commercial building is a good example
of SUR. Keppel Land is also expanding
into the region where there are many
opportunities to offer its SUR solutions
in key cities such as Seoul, where it
jointly acquired an office building with
Keppel Capital in December. To advance
our growth in this area, we launched
our Keppel Sustainable Urban Renewal
Fund with a target size of US$2 billion
in 2022.
The senior living sector is another
significant growth market, underpinned
by longer life expectancies and rising
affluence. We are seeing opportunities
across mature markets such as the
US where Keppel is already present
through our investment in Watermark
Retirement Communities, as well as
emerging ones in Asia such as China.
In 2022, we embarked on our first
dedicated senior living facility in Nanjing,
China, which will offer care capabilities
and around 400 beds. This will be a
showpiece of Keppel’s expertise and can
serve as a launchpad for expansion into
other markets in China and beyond.
20
Keppel Corporation Limited
Q Can you elaborate on the
opportunities that Keppel sees
in connectivity solutions?
A
In the age of rapid digitalisation, the real
game-changers are not smart assets and
solutions per se, but smart, connected
assets and solutions. At Keppel, we see
ourselves playing a pivotal role in
contributing to the digital revolution,
through our end-to-end solutions ranging
from state-of-the-art infrastructure such
as subsea cables and data centres,
to 5G network and technologies, which
will create value for both enterprises
and consumers.
Over the past few years, M1 has made
a huge leap in its transformation from
a traditional telco into a cloud native
connectivity platform. M1 is expanding
its enterprise solutions and developing
5G business applications to capture
Q What progress has Keppel made in its
journey as a sustainable company?
A We made significant progress in our
sustainability focus in 2022, with the
establishment of a Board Sustainability
and Safety Committee, and appointment
of a Chief Sustainability Officer. Today,
sustainability and climate change are
topics regularly discussed at Board and
management meetings, and guide the
Company’s strategy and risk management.
We continued to lower our Scope 1 and 2
carbon emissions in line with our net zero
target and expand our tracking of Scope 3
emissions. We have set a target for 50%
of electricity usage in our operations to
be from renewable energy sources by
2025, with a view to reaching 100% by
2030. We are continuing our efforts to
conserve water and reduce waste, and
have also sharpened our focus on
shareholders. We have in recent years
endeavoured to pay out about 50-60% of
our earnings. The final cash dividend of
18 cents, together with the interim dividend
of 15 cents, make up a total of 33 cents
for FY 2022, or about 63% of our earnings.
As a Group, we will continue investing
for growth. I am confident that as
we execute Vision 2030, we will have
sufficient capital to ramp up our growth
engines and also reward our shareholders.
As the Group’s recurring income increases,
it will give us greater confidence to pay
out more of our earnings as dividends.
Q How are you preparing people to drive
the next phase of Keppel’s growth?
A
In my time as CEO of Keppel, I have seen
how Keppelites dug deep to resolve difficult
challenges and engineer better outcomes
than what one might have expected.
We are making sustainability our business,
with many new green initiatives during the year.
new opportunities. In Singapore,
M1 has achieved more than 95%
outdoor coverage in its 5G standalone
network rollout. As M1 migrates
customers to its new cloud native digital
platform, which allows subscribers
to enjoy its new 5G plans, and cloud
services such as cloud gaming, among
others, it will be able to improve customer
acquisition and lower its cost to serve.
In the data centre space, we continue
to drive the design and development of
more energy-efficient and sustainable
assets. We are presently working on
our Floating Data Centre Module, and
also collaborating with other partners
to study, inter alia, the feasibility of
importing clean energy to power our
data centres in Singapore.
Meanwhile, we are making good progress
with the Bifrost Cable System, which is
expected to be ready for service in 2024.
When fully commissioned, it will be the
largest capacity high-speed transmission
cable across the Pacific Ocean.
Looking ahead, we see the trend of
increasing digitalisation, including cloud
computing, artificial intelligence and the
metaverse, generating even further demand
for the Group’s connectivity solutions.
1 On a gross basis, including projects under development.
biodiversity. Beyond environmental
factors, we are also strengthening
our performance in the governance
and social aspects of sustainability,
such as enhancing Board diversity, risk
management and employee well-being,
as well as contributing to the community.
Very importantly, we are making
sustainability our business, with many
new green initiatives during the year,
such as in renewables and sustainable
urban renewal, which I mentioned earlier.
The Group’s portfolio of renewable energy
assets has more than doubled to 2.6 GW1
at the end of 2022, as we progress
towards our target of 7 GW by 2030.
We are encouraged to see our
sustainability efforts recognised in
international indices such as MSCI and
DJSI, and will continue to do our part
to contribute to a sustainable future.
Q Keppel has been paying out a total
cash dividend of 33.0 cents per
share for the past two years. Is this
a sustainable level moving forward?
Keppel has in turn strived to make the
Company a great place for employees
to fulfil their individual aspirations.
As we enter the next phase of our evolution,
we have redefined who Keppel is and
how we create value, namely, “A Leading
Global Asset Manager and Operator,
Creating Solutions for a Sustainable
Future.” The first part of the statement
describes the business we run, while
the latter defines our purpose.
To ride the next wave, we will need
Keppelites with the right mindsets and
skillsets. We will continue to invest in
our people, training them to remain
relevant in a changing landscape, while
bolstering the Company’s capabilities
in asset management as well as our
operating platforms.
I am heartened to see that Keppelites
are highly engaged, with a score of
84% in the 2022 Employee Engagement
Survey, 4% higher than Mercer’s global
average. 88% of Keppelites also indicated
that they are proud to work for Keppel.
A While we do not have a specific dividend
policy, the Board and the management
are cognisant that dividends are an
important consideration for our
I am confident that, working together
as OneKeppel, and supported by highly
energised employees, Keppel can
achieve our Vision 2030 goals by 2025.
Annual Report 2022
21
Group Overview
Vision 2030 in Action
Highlights of
Achievements in 2022
1. Accelerate Business Transformation
During the year, we made good progress in executing
our Vision 2030.
Scaling Up in Vision 2030 Growth Areas
• Achieved AUM of $50 billion by end-2022.
• Keppel Capital completed more than $7.7 billion
in acquisitions and divestments and launched
flagship funds for infrastructure and sustainable
urban renewal (SUR).
• Expanded business in renewables, clean energy
and environmental solutions, and bolstered
Energy-as-a-Service offerings. Reached final
investment decision for 600 MW state-of-the-art
hydrogen-ready, advanced combined cycle power
plant. Exploring green ammonia and green hydrogen
solutions to support low-carbon economy.
• More than doubled announced portfolio of renewable
projects to 2.6 GW from 1.1 GW at start of 2022.
• Pivoting away from traditional developer model to
offer Real Estate-as-a-Service, with focus on SUR
and senior living. Embarked on first senior living
community in Nanjing, China.
• Driving development of energy-efficient and
sustainable assets with proposed Floating Data Centre
Module and green data centre park. Scaled up data
centre presence with acquisitions in China and the UK,
bringing total portfolio to 32 assets.
• Making good progress with the Bifrost Cable System
to be service-ready in 2024.
• Making headway in M1’s transformation into a cloud
native connectivity platform, with continued enterprise
business growth. Achieved over 95% outdoor 5G
standalone network coverage.
Simplifying and Focusing the Group’s Business
• Completed offshore & marine transactions
by early-2023.
• Completed divestment of logistics business in
Southeast Asia and Australia.
Asset Monetisation
• Announced asset monetisation of more than
$4.6 billion since 4Q 2020, of which $1.6 billion
was in 2022.
• $3.6 billion1 cash collected as at end-2022.
Executing Asset-light Business Model
• Announced joint investments worth $2.8 billion
with private funds and business trust managed
by Keppel Capital in energy & environment and
SUR-related assets and platforms in line with
OneKeppel approach.
Advancing Cross-Business Unit Collaboration
• External revenue from cross-business unit
collaboration across the Group amounted
to about $560 million2, increasing by
about 60% from 2020, when Vision 2030
was launched.
• Majority of new projects launched by Group
involved cross-business unit collaboration.
• Advanced value-chain integration by
establishing OneRE, OneInfra and OneDC
teams3 across the Group’s focus areas.
1
Includes $0.2 billion received on the sale of 1 Borr rig, which has
been transferred to Asset Co as part of initial working capital.
2 External revenue from cross-business unit collaboration is an
internal management metric that includes share of economic
benefits from joint ventures, associates and certain investments.
OneRE – One Real Estate; One Infra – One Infrastructure;
OneDC – One Data Centre.
3
4 The recurring income in FY 2021 was restated, as Keppel O&M’s
income was re-classified as discontinued operations.
2. Drive Financial
Performance
Net Profit
$927m
Compared to $1.02b
for FY 2021
Recurring Income
$560m
More than double of
$262m4 in FY 2021
Gearing
Cashflow
0.78x
at end-2022, compared
to 0.68x at end-2021
$408m
outflow, compared
to $1.76b inflow
in FY 2021
ROE
8.1%
Compared to 9.1%
for FY 2021
Total Dividend
33 cts
Cash dividend per
share, unchanged
from FY 2021
22
Keppel Corporation Limited
Annual Report 2022
23
Group Overview
Vision 2030 in Action
3. Develop Human
Capital
Continue Staff Engagement
and Development
• Ranked as one of the World’s Best
Employers 2022 by Forbes.
• Certified by Top Employers Institute as
a Top Employer in Singapore for fourth
consecutive year, and in China for the first time.
• Achieved strong engagement score of 84%,
4% above Mercer’s global average.
• Achieved average of more than 24 training
hours per employee, with more than
80,000 training places.
Enhance Succession Planning
• Ongoing efforts to strengthen succession
bench strength through leadership
development programme at group
and individual levels.
• Board mentorship programme was positively
received with strong commitment from
mentees and board mentors. Programme
duration is extended to provide continuous
support and feedback to mentees to
enhance leadership effectiveness and
elevate readiness for succession.
4. Enhance Governance,
5. Champion
Compliance,
Risk Management
and Safety
Governance
• Established Board Sustainability and Safety
Committee (BSSC), with clear terms
of reference to sharpen the focus on
sustainability issues. Former Board Safety
Committee subsumed under terms of
reference of BSSC.
• Enhanced Board Diversity Policy to include
other aspects of diversity such as race/
ethnicity and nationality.
• Augmented Board’s skills, knowledge,
experience and diversity with appointment
of two new independent directors with
experience and expertise in sustainability
and digitalisation.
• Continued to roll out the ISO 37001 Anti-Bribery
Management System across the Group.
Compliance and Risk Management
• Enhanced overall risk management and
compliance frameworks in response to
volatile international environment.
• Conducted Group-wide scenario planning
exercise to assess potential risks from
several global macroeconomic, geopolitical
and climate-related scenarios, and
developed mitigation plans where required.
Safety
• Suffered three fatalities in two incidents
at Keppel O&M’s yard in Singapore.
Investigated incidents and put in place
measures to prevent recurrence.
Sustainability
Work Towards ESG Goals, including
Carbon Emissions Reduction Targets1
• Included in the DJSI World and Asia-Pacific
Indices; maintained MSCI AAA ESG rating.
• Continued to work on reducing Scope 1
and 2 carbon emissions.
• Expanding tracking of Scope 3 emissions
to cover all 15 categories.
• Conducted scenario analyses in line with
recommendations of the Task Force on
Climate-related Financial Disclosures to
assess the Group’s exposure and response
to climate-related risks and opportunities.
• Committed to Singapore’s Green
Nation Pledge.
Make Positive Impact on
the Community
Volunteers
• More than 14,000 hours of community
service, exceeding 12,000 hours in 2021.
Contribution to Worthy Causes
• $4.3 million contributed to social
investment spending and industry
advancement.
1 Further details will be provided in Keppel’s Sustainability Report
to be published in May 2023.
Focus Areas in 2023
Accelerate Business Transformation
• Drive business transformation to be a leading global asset manager and operator,
with strong operating capabilities in Energy & Environment, Urban Development
and Connectivity.
• Exceed $5 billion in asset monetisation by end-2023.
• Work towards AUM target of $200 billion by end-2030.
• Drive further integration to realise OneKeppel synergies.
• Continue digitalisation efforts to support business transformation.
Drive Financial Performance
• Achieve Vision 2030 financial targets, including mid- to long-term ROE target of 15%.
• Grow recurring income.
• Maintain gearing below 1.0x.
Develop Human Capital
• Continue to deepen staff engagement.
• Develop talent pool and grow capabilities in line with Vision 2030 transformation.
• Enhance succession planning.
Enhance Governance, Compliance, Risk Management & Safety
• Ensure strong governance, risk management, compliance, controls and safety standards.
• Enhance the Company’s ethics and compliance culture through a culture
advancement programme.
Champion Sustainability
• Work towards ESG goals, including long-term carbon emissions reduction targets.
• Make a positive impact on the community.
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Group Overview
Vision 2030 in Action
Technology
and Innovation
We are harnessing technology and innovation to drive
transformation and achieve Keppel’s Vision 2030 plans.
Keppel has a strong track record in
innovation and transformation.
During the year, the Group’s innovation efforts
were centred around Keppel’s Vision 2030
strategy, from assessing the impact of mid-
to long-term technological and business
model shifts on the Group, to accelerating
the development of new growth engines and
strengthening the resilience of its businesses
through differentiation.
Technology and innovation efforts are driven
both at the Group and business unit (BU)
levels. BUs focus on the key growth areas
identified as part of Vision 2030, leveraging
their technical and operational expertise
and network of partners and in-country
presence. At the Group level, Keppel Technology
& Innovation drives technology foresight,
identifies long-gestation opportunities in
collaboration with BUs, and cross-fertilises
ideas among BUs, leveraging their distinct
capabilities to create unique competitive
advantages for the Group.
In addition, the Group Digital Office (GDO)
was established in March 2022 to catalyse
digital transformation. Headed by the Chief
Digital Officer, the GDO drives digitalisation
and automation to improve efficiency across
the Group’s assets and operations.
Beyond in-house capabilities, the Group also
taps the insights of the Keppel Technology
Advisory Panel (KTAP), comprising eminent
business leaders and industry experts from
across the world, which guides the Group’s
innovation journey and provides technology
foresight. This includes monitoring of
early-stage industry developments,
and new technologies as well as future
scenario mapping. Through the KTAP
members, Keppel is also able to access
their networks so as to stay updated on
emerging megatrends, the latest technologies
and the changing global landscape.
To address complex and interrelated issues
that may be difficult for the Group to solve
alone, Keppel adopts a robust ecosystem
and value chain approach, working in close
partnership with the industry stakeholders
including institutes of higher learning,
government agencies, global and local
corporates, as well as venture funds and
start-ups. Our close collaboration with
strategic partners helps us to develop
innovative, differentiated and integrated
solutions. An example is Keppel Infrastructure’s
collaboration with Mitsubishi Heavy Industries
to carry out a feasibility study on the
development of a 100% ammonia-fuelled
power plant in Singapore, which can contribute
to building a more resilient and sustainable
energy sector in Singapore and the region.
As part of Vision 2030, we are embedding
sustainability and customer centricity in our
innovation efforts. We help our customers
in their decarbonisation efforts through
our suite of energy-efficient solutions,
clean energy and digital solutions.
Innovation Across Time Horizons
Keppel views its technology and innovation
efforts across three time horizons.
Engine 1: We focus on enhancing and
defending our current revenue streams
through efficiency improvements enabled
by technology and digital strategies,
such as developing more energy-efficient
data centres in our Connectivity segment.
Engine 2: We seek to accelerate the
development and commercialisation
of our prioritised new engines of growth,
through business model and technology
innovation. Working with partners, we build
new adjacent solutions that have strong
scalability and growth potential, and
strengthen the Keppel differentiation in the
marketplace. Such developments include
our sustainable urban renewal solutions.
Engine 3: Further out in the horizon, we maintain
strong technology foresight on emerging,
disruptive or game-changing technology,
assessing their potential mid- to long-term
impact on our businesses, and looking to
capture new and disruptive revenue streams
or future-proof our existing business.
Innovation Across Our
Business Segments
Asset Management: We are delivering to
investors in our funds, REITs and business
trust, access to Keppel’s proprietary-developed
assets with unique technologies. For instance,
Keppel Infrastructure Trust signed a
non-binding term sheet in 2022 to acquire
Keppel’s interest in the entity that owns
the Keppel Marina East Desalination Plant,
which was developed by, and will continue
to be operated and maintained by
Keppel Infrastructure.
Energy & Environment: We are focused on
developing decarbonisation and integrated
environmental solutions. In the area of
low-carbon power, together with our partners,
we have advanced the development of clean
energy value chains, such as renewables
imports, ammonia and hydrogen. In the
environmental space, we have partnered
with the National Environment Agency to
study the feasibility of carbon capture for
waste-to-energy plants in Singapore.
Urban Development: We are developing
new living and working concepts, seizing
opportunities in up-and-coming real estate
segments, such as sustainable urban renewal
and senior living, with a strong focus on
improving the customer experience. We look
to develop Real Estate-as-a-Service solutions
to grow our recurring income.
Connectivity: We are enhancing the
sustainability of our data centres through the
development of power-efficient solutions, such
as data centre-grade infrastructure solutions.
M1 is transforming itself from a traditional
telco to a cloud native connectivity platform,
and is leveraging its 5G network to develop
innovative 5G use cases jointly with partners,
such as Gardens by the Bay and Electronic
Sports to enable metaverse experiences.
Keppel has also invested directly into
high-growth companies and start-ups,
as well as in venture funds, which help us
accelerate our learning and value-add to our
ecosystem. This includes our investment in
Envision AESC – one of the world’s leading
electric vehicle battery companies. We are
also collaborating with the wider Envision
Group, a leading green technology partner
and net zero tech partner, to explore the
development and supply of low-carbon
electricity solutions.
Case Study
Piloting Singapore’s First
Membrane-based Nearshore
Floating PV System
Keppel Infrastructure was awarded a grant from the Energy Market Authority
(EMA) and JTC to pilot Singapore’s first membrane-based nearshore floating
solar photovoltaic (PV) system at Jurong Island. The pilot PV system consists
of three circular platforms, which will have an installed capacity of 1.5 MWp.
Compared to conventional floating PV systems used in calmer water bodies
such as reservoirs, this membrane-based PV system is designed based
on floating PV specialist Ocean Sun’s technology to harness solar energy
reliably amid sea conditions, including strong waves and wind. This is
achieved through the flexible circular surface membranes which undulate
with the waves, providing a favourable distribution of loads and forces,
thereby reducing stress to the PV system.
The reinforced membranes for the PV panels also ensure the lowest
material usage of any floating PV system, enabling resource conservation.
The system is also easy to deploy and install, with increased efficiency from
direct water cooling.
When completed, Keppel Infrastructure’s pilot membrane-based nearshore
floating PV system can serve as a model for future scaling and replication
in nearshore waterbodies in Singapore as well as overseas.
With limited land space in Singapore, this robust and innovative system
can help to catalyse the deployment of renewable energy using unutilised
sea space.
The award was part of EMA and JTC’s Jurong Island Renewable Energy
Request for Proposals to accelerate the development of clean energy
innovations for implementation on the island. Projects will be funded
by a $6 million joint commitment by EMA and JTC, with support from
Enterprise Singapore.
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Annual Report 2022
27
Collaboration
and Integration
We are focused on driving collaboration and
integration to realise synergies and drive growth.
In 2022, most of the Group’s new initiatives
involved cross-business unit collaboration.
To accelerate the integration of our
value chains, we established One Real Estate
(OneRE), One Infrastructure (OneInfra) and
One Data Centre (OneDC) teams, comprising
senior personnel from across the Group’s
business units (BUs) to evaluate and execute
on opportunities across our focus areas.
The cross-BU teams adopt a horizontal
approach, i.e. cradle-to-maturity,
in evaluating opportunities across
the projects’ development stages and
life cycles, whether they are investments
by the Group’s operating entities, private
funds, listed REITs or business trust.
By bringing together Keppel’s different
experience and capabilities, this OneKeppel
approach allows Group to create value beyond
what each business unit can achieve on its
own. It also allows the Group to undertake
more complex deals, without depending
solely on its balance sheet. By drawing on
the unique strengths of each operating unit,
pooling talent and resources, as well as
tapping third-party capital, the Group is able
to realise synergies and optimise strategic
execution and resource allocation, thus
achieving more with less.
Growing at Speed and Scale
In 2022, the Group announced more than
$2.8 billion worth of energy & environment
and sustainable urban renewal-related
investments, jointly undertaken by Keppel
together with the private funds and/or
business trust managed by Keppel Capital.
1. Seizing Opportunities in
Onshore and Offshore Wind Energy
Keppel Corporation and Keppel
Infrastructure Trust announced the joint
acquisition of interests in European
onshore and offshore wind energy
assets for $679 million. These comprise
stakes in onshore wind assets in
Norway, Sweden and the United Kingdom
sponsored by Fred. Olsen Renewables,
a leading developer, operator, and owner
of renewable energy assets, as well as a
1
2
3
Powering a low-carbon future.
Expanding capabilities in environmental infrastructure.
German offshore wind farm operated by
Ørsted, which is a world leader in offshore
wind power. Together, these investments
added more than 700 MW to Keppel’s
growing renewable energy portfolio, which
expanded to about 2.6 GW by the end
of 2022.
2. Powering a Low-carbon Future
Keppel Infrastructure has reached final
investment decision on the 600 MW
Keppel Sakra Cogen Plant, Singapore’s
first hydrogen-ready and most advanced,
high-efficiency combined cycle power plant.
Running initially on natural gas as a primary
fuel, the Plant is designed to operate on
fuels with at least 30% hydrogen content
and has the capability of shifting to run
entirely on hydrogen. The Keppel Sakra
Cogen Plant is intended to be owned
by Keppel Asia Infrastructure Fund
and Keppel Infrastructure, reflecting the
Group’s strong development capabilities
and asset-light business model as it seizes
opportunities in the energy transition.
3. Expanding Capabilities in
Environmental Infrastructure
Keppel Infrastructure Trust, Keppel Asia
as a beachhead to explore
other environmental and
Energy-as-a-Service opportunities.
Infrastructure Fund and Keppel Infrastructure
jointly acquired a 100% stake in South
Korean waste management company,
Eco Management Korea Holdings (EMK)
for approximately $666 million. Operating
six waste-to-energy (WTE) plants and
five sludge drying facilities, EMK has
the third largest incineration capacity
in Korea. It is also the largest waste oil
refiner and owns and manages a landfill,
which has the fourth largest capacity
in Korea. The investment in EMK is
a prime example of how Keppel and
the private funds and business trust
can collaborate to seize growth
opportunities swiftly.
Leveraging Keppel Seghers’ leading
WTE technology, Keppel Infrastructure
can complement EMK’s growth in the
South Korean market. Keppel Infrastructure
can also tap EMK’s presence in South Korea
4. Engendering Leading Edge
Data Centre Solutions
Keppel is exploring the development
of a nearshore data campus project,
that brings together the Group’s
diverse expertise in developing and
operating data centres as well as clean
energy and infrastructure solutions.
Datapark+ is envisioned to be a scalable,
state-of-the-art, low-carbon, modular
data centre campus, with centralised
utilities that deploys renewables
to reduce its carbon emissions,
and with an extensive hydrogen
transport network, thereby accelerating
Singapore’s transition to hydrogen.
With the growing investor demand
for clean critical infrastructure, Keppel
is exploring opportunities to bring in
third-party operators and co-investors
for this landmark project.
4
Seizing opportunities in onshore and offshore wind energy.
Engendering leading edge data centre solutions.
Group Overview
Ecosystem for Value Creation
As a global asset manager with strong operating capabilities
across Energy & Environment, Urban Development and Connectivity,
we create solutions that help to build a sustainable future.
We are accelerating the execution of Keppel’s Vision 2030 plans,
supporting our customers and communities on their journeys to
net zero, while creating value for our investors and stakeholders.
Our business model, underpinned by strong collaboration and integration across business units, provides a robust
ecosystem that allows us to create and capture value as OneKeppel. From the time an asset is being created till
after its injection into a Keppel-managed trust 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 Value Creating Business Model
Private Funds
Design and Build
Own and Operate
Stabilise and Monetise
REITs and Trust
Real Assets We Create, Operate and Maintain
Keppel Marina East Desalination Plant, Singapore
Data centre in Greater Beijing, China
Keppel Bay Tower, Singapore
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Annual Report 2022
31
The assets held by the Group contribute regular revaluation gains. As the assets mature and are derisked, they can be monetised through the listed REITs and business trust that we manage, as well as to third parties. The process of asset monetisation enables the Group to unlock value and recycle capital to seize new opportunities.We sponsor and manage listed REITs and a business trust which can serve as platforms for capital recycling. Mature assets that Keppel develops and operates are well-suited for these listed entities whose investors seek stable, recurring incomes. Keppel can earn recurring fee income from the management of the REITs and business trust, as well as the operation and maintenance of their respective assets.In addition, through Keppel’s stakes in the listed vehicles, we benefit from the performance and contributions from the REITs and business trust. This also ensures the alignment of Keppel’s interests with those of the respective unitholders.Through the private funds that Keppel creates and manages, we can bring on board third parties to co-invest in assets that Keppel intends to develop or acquire across our focus areas of Energy & Environment, Urban Development and Connectivity. This extends Keppel’s capital base to seize opportunities, while we earn recurring fees from managing the private funds.Keppel has a strong track record in designing and building high-quality real assets, including energy and environmental infrastructure, data centres and commercial and residential properties, among others. We derive fees from the design and development phase for assets held through the private funds. We also earn development margins from projects which are sold/delivered to customers, such as residential projects and turnkey solutions.Completed assets which Keppel owns, including those owned together with the private funds and listed REITs and business trust that we manage, can yield steady cashflows and recurring income for the Group. We can also earn fees from the management and operation of these assets. Group Overview
Sustainability Framework
We are committed to environmental stewardship,
responsible business practices, and investing in people
and communities wherever we operate.
Our Strategy
Keppel has a two-pronged sustainability strategy of running our business sustainably, and making sustainability our business by providing
solutions that contribute to global sustainable development and decarbonisation efforts.
Our approach to sustainability is underpinned by the three pillars of (i) Environmental Stewardship, (ii) Responsible Business, and
(iii) People and Community, which address the environmental, social and governance (ESG) aspects of sustainability.
Environmental Stewardship
Responsible Business
People and Community
We are committed to combatting climate
change, improving resource efficiency
and reducing our environmental impact.
We are refocusing the Group’s portfolio
on solutions for a sustainable future,
such as renewables, clean energy and
decarbonisation solutions.
We have set quantitative targets to reduce
the Group’s carbon emissions, as well as
water and waste intensity. We have also
set targets to increase renewable energy
utilisation, and grow our portfolio of
renewable energy assets. We are
monitoring the latest developments in
climate change and taking steps to both
manage climate-related risks and seize
opportunities by providing solutions that
contribute to climate action, including
driving sustainable urban renewal and
exploring innovative solutions such as
the development of climate-resilient
nearshore developments and energy-
efficient floating data centres.
The long-term sustainability of our
business is driven at the highest level of
the organisation through a strong and
effective board, good corporate governance
and prudent risk management, including
the evaluation of ESG risks.
People are the cornerstone of our
businesses. 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 and
innovation across the Group, leveraging
technology and our asset-light model
to provide solutions that contribute to
sustainable development and combatting
climate change, while creating value for
all our stakeholders.
We have set targets to increase our
research and development expenditure
on sustainability-linked innovation and
are also working closely with stakeholders
in our value chain to enhance their
sustainability performance.
We strive to create value and uplift
communities wherever we operate.
We support initiatives that contribute
to protecting the environment,
promoting education and caring for
the underprivileged, with the goal of
building a sustainable future together.
We have committed to contribute up
to 1% of the Group’s net profit to
worthy causes.
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Dow Jones Sustainability
World Index
Dow Jones Sustainability
Asia Pacific Index
MSCI ACWI
and MSCI World ESG
Leaders Index1
iEdge SG ESG Indices
and iEdge Singapore
Low Carbon Indices
FTSE4Good Index Series
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Euronext
Vigeo World
120 Index
Securities Investors
Association (Singapore)
Investors’ Choice Awards 2022
Singapore Corporate Governance
Award (Big Cap), and
Outstanding CEO Award
Champion of Good 2022
by the National Volunteer
and Philanthropy Centre
World’s Best Employers 2022
by Forbes
Sustainability Governance
The Board and management of Keppel
Corporation are committed to sustainability,
which is at the core of the Company’s strategy.
The Board and management consider
sustainability issues in the Company’s business
and strategy, determine the material ESG
factors and oversee the management and
monitoring of the material ESG factors.
Sustainability-related topics, including
environmental and climate change issues,
as well as social and governance aspects,
are regularly discussed by the Board, which
meets six times a year, and as warranted by
circumstances. Since July 2022, sustainability
has been included in the agenda of each
Board meeting.
In May 2022, the Board established a Board
Sustainability and Safety Committee (BSSC) to
provide even greater focus on sustainability
matters. The role of the former Board Safety
Committee has been subsumed under the BSSC.
sustainability-related trends and developments,
reviewing the Company’s sustainability
strategy, ensuring that the Group has in
place an effective sustainability governance
structure, overseeing the adoption of and
progress towards the Company’s sustainability
goals, reviewing the processes for identifying,
assessing and managing climate-related risks
and opportunities, overseeing the Company’s
health, safety, and environmental (HSE)
performance, among others. The BSSC also
makes regular visits to the Group’s projects
and work sites, including interacting with
the Group’s contractors and suppliers, to
monitor and better understand the Group’s
sustainability and safety performance.
Each quarter, the Chairman of the BSSC
provides an update to the Board on key
issues deliberated by the BSSC. The BSSC
also considers management’s proposals on
sustainability-related policies and practices
and makes recommendations to the Board
where relevant.
and performance, including sustainability
issues. MExCo also determines the Group’s
key sustainability policies and targets,
before they are presented to the BSSC. The
committee is chaired by CEO Mr Loh Chin Hua
and comprises senior management from
across the Group, including the Chief Financial
Officer, CEOs of key business units and the
Chief Sustainability Officer (CSO).
The CSO, who reports to the CEO as well as
the BSSC, coordinates and drives the Group’s
sustainability efforts. The CSO chairs the
Group Sustainability Working Committee,
comprising heads of corporate functions and
representatives from across businesses units,
which monitors and executes the Group’s
sustainability efforts. The CSO also heads
the Group Sustainability department, which
manages different aspects of the Group’s
sustainability efforts, including preparing
Keppel’s sustainability report, with inputs
from business units and members of the
Group Sustainability Working Committee.
The BSSC is chaired by non-independent
and non-executive director Mr Teo Siong
Seng, and its members include Chairman of
Keppel Corporation Mr Danny Teoh, CEO and
Executive Director Mr Loh Chin Hua, as well
as Independent Director Mr Olivier Blum, who
has extensive experience in sustainability.
The BSSC meets at least four times a year.
Its roles include monitoring international
While the BSSC maintains broad oversight over
sustainability issues, other Board Committees,
namely the Audit, Nominating, Remuneration
and Board Risk Committees, also address
specific aspects of sustainability relevant to
their respective committees.
At the management level, the Management
Executive Committee (MExCo), which meets
every month, oversees Keppel’s strategy
To embed sustainability throughout
the Company and ensure accountability,
sustainability targets have been included
in the performance appraisal of senior
management across the Group, including
both annual remuneration and long-term
incentives. Environmental sustainability
targets, including carbon emissions
reduction, account for 7.5% of the
Company’s performance scorecard.
Implementing TCFD Recommendations
Since 2020, Keppel has supported the
Task Force on Climate-related Financial
Disclosures (TCFD), and started
implementing its recommendations to
better assess and report on the financial
impact of climate-related risks and
opportunities on the Group’s business.
Keppel has the necessary governance
structures at both the Board and
management levels to monitor
climate-related issues, which are
taken into consideration in the
determination of Keppel’s strategy.
The Company has put in place
risk management frameworks to
address climate-related risks. In 2022,
the Company identified climate change
as a key risk which is monitored by
the Board Risk Committee under
the Group-wide Enterprise Risk
Management framework. The Group
has also conducted scenario
analyses with support from external
advisors to better assess the
Group’s exposure and response to
climate-related risks and opportunities.
Climate-related metrics and targets
have been established, including
reduction of carbon emissions,
utilisation of renewable energy and
growing the Group’s portfolio of
renewable energy assets.
1 The use by Keppel Corporation of any MSCI ESG Research LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or index
names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of Keppel Corporation by MSCI. MSCI services and data are the
property of MSCI or its information providers, and are provided ‘as-is’ and without warranty. MSCI names and logos are trademarks or service marks of MSCI.
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 2023. 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.
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Keppel Corporation Limited
Annual Report 2022
33
Group Overview
Sustainability Framework
Contributing to Sustainable Development
The Board and management of Keppel
Corporation review annually and determine
the ESG factors material to the Group’s
business, taking into account the Group’s
business strategy, market conditions and
stakeholder concerns. The materiality
review helps the Company to focus its
sustainability strategy, management
practices and reporting on the most
significant impacts and factors in order
to create sustainable value over the
long term.
In 2022, Keppel conducted a comprehensive
review of its material ESG factors, supported
by an independent consultant, taking
into account the Group’s business
transformation and refocused portfolio
as the Company accelerates its execution
of Vision 2030. The seven material ESG
factors were grouped under Keppel’s three
sustainability pillars of Environmental
Stewardship, Responsible Business as
well as People and Community, which
correspond with the environmental,
governance, and social aspects of
sustainability respectively. Further
details on our review of material ESG
factors will be provided in Keppel
Corporation’s Sustainability Report to
be published in May 2023.
As a company committed to sustainability,
Keppel contributes, both directly and
indirectly, towards the achievement of the
United Nations Sustainable Development
Goals (SDGs). We have identified 10 SDGs
which represent the Group’s most significant
impacts on the sustainable development
agenda. They include areas where Keppel
is making the most positive impacts on
the SDGs, as well as areas where we
have a responsibility to prevent and
mitigate potential negative impacts.
The table below outlines how Keppel
is contributing to the SDGs, organised
based on the Group’s material
ESG factors.
Strategic Pillar: Environmental Stewardship
Material Factor
Climate Action & Environmental
Management
Impact on SDGs
Approach
Keppel is committed to both running our business sustainably, and making sustainability our
business through providing solutions that contribute to a greener world. This involves focusing
our portfolio on sustainability-related solutions and innovations, building resilience against climate
change risks, and seizing climate-related opportunities for growth. We are also committed to
minimising our environmental impact by reducing greenhouse gas emissions, energy consumption,
water consumption and waste generation, as well as preventing pollution and preserving
biodiversity in our operations.
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.
We have been tracking Scope 3 emissions since 2019 and are progressively expanding our
coverage. We are working towards disclosing all 15 relevant categories of Scope 3 emissions in our
2022 sustainability report.
Since 2020, Keppel has adopted a 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.
Keppel has set a target to grow our renewable energy portfolio to 7 GW by 2030, and has
announced renewables projects with a total capacity of 2.6 GW as at end-2022, including projects
under development.
Within our operations, Keppel has set a target for 50% of the Group’s electricity use to be from
renewable energy sources by 2025, with a view to reaching 100% by 2030.
Keppel has also set targets to achieve a 10% reduction in waste intensity and 20% reduction in
water consumption intensity by 2030 from 2019 levels.
In 2022, Keppel Corporation signed on to the Singapore Green Nation Pledge, which comprises a list
of commitments intended to help make Singapore green, liveable and climate resilient.
Keppel is refocusing our portfolio on solutions for a sustainable future. In 2022, we actively
expanded our business in Vision 2030 growth areas, such as renewables, clean energy and
environmental solutions. These include commencing Singapore’s first renewable energy import, the
development of Singapore’s first hydrogen-ready power plant, the Keppel Sakra Cogen Plant, the
opening of Keppel Infrastructure @ Changi, Singapore’s first Green Mark Platinum Positive Energy
building under the new and more stringent Green Mark scheme, and exploring green ammonia and
green hydrogen opportunities with international partners. In the area of clean water, Keppel
operates the Keppel Marina East Desalination Plant, Singapore’s first large-scale, dual-mode
desalination plant, which contributes to strengthening the country’s water security. Keppel is also
seizing opportunities in sustainable urban renewal, and continuing to develop innovative solutions
for greener data centres.
Strategic Pillar: Responsible Business
Material Factor
Corporate Governance & Risk Management
Impact on SDGs
Material Factor
Economic Contribution to Society
Approach
Keppel recognises that good corporate governance is essential to the sustainability of the Company’s
businesses, and that non-compliance with laws and regulations may pose financial and reputational
risks. We are committed to ensuring strong corporate governance and regulatory compliance, robust
risk management, including of sustainability-related risks, as well as high standards of ethical business
conduct, including zero tolerance for fraud, bribery, and corruption.
Highlights
In 2022, Keppel appointed two new independent directors, Mr Oliver Blum and Mr Jimmy Ng, to our
Board with effect from 1 May 2022. Mr Blum and Mr Ng are also members of the Board Sustainability
and Safety Committee and the Board Risk Committee respectively. Mr Blum has extensive experience
in both running companies sustainably and driving sustainability-as-a-business on a global scale, while
Mr Ng has rich expertise in driving digitalisation as a corporate strategy. Their appointments reflect
Keppel’s commitment to achieve a good balance of skills, knowledge, talents, experience as well as
diversity among directors, and ensures that Keppel can benefit from the best talent as we execute the
Group’s Vision 2030.
Amidst significant global risks in 2022 arising from the Russia-Ukraine conflict, volatility in commodity
prices, rising interest rates and inflation, disruption in global supply chains, and slowdown of China’s
economy, Keppel continued to operate effectively and was able to manage these risks through robust
risk management practices and planning.
Given our zero tolerance for fraud, bribery, corruption and violation of laws and regulations, we continue
to enhance our Compliance Framework including digitisation of Know Your Client processes through
a system platform implemented across Keppel and roll out of the ISO 37001 Anti-Bribery Management
System across business units. In 2022, the main entities achieving ISO 37001 certification comprised
Keppel Infrastructure Qatar and Belgium, and Keppel Land India.
In 2022, 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 on
managing the global macro risks and mitigating the impact on business where possible. Cybersecurity
risk continues to be one of our significant risks and we continuously enhance our technology controls to
prevent and detect cyber-attacks. We also focused on climate-related risks to improve monitoring and
assessment of the impact of climate change on business operations and assets, in line with the
recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
Approach
Keppel creates value for all stakeholders through running a successful and resilient business, which
provides good dividends for shareholders, jobs for communities, and tax revenue for governments. By
growing our business as a provider of sustainability-related solutions, Keppel contributes to the
economic advancement of society, while also advancing environmental sustainability.
Highlights
Keppel’s business operations generate employment, opportunities for suppliers, products and services
for customers, tax revenues for governments and dividends for shareholders.
Impact on SDGs
In 2022, Keppel achieved a net profit of $927 million. Total cash dividend for FY 2022 is 33.0 cents per share.
Material Factor
Supply Chain Management
Impact on SDGs
Keppel is committed to ensuring that its approach towards tax management is executed responsibly
and with integrity. Keppel’s Group Tax department monitors and maintains oversight of Keppel’s tax
matters by regularly collaborating with, and closely supporting, the business and finance teams, as well
as other internal stakeholders on various tax planning initiatives and tax compliance matters.
Approach
Keppel believes in building a resilient, responsible, and diversified supply chain. We are committed to
integrating sustainability criteria in the selection, monitoring and evaluation of suppliers and engaging
with suppliers to adopt sustainable and responsible business practices, to minimise social and
environmental impacts as well as manage risks across our supply chains.
Highlights
All our suppliers are qualified in accordance with our requisition and purchasing policies and screened
based on ESG criteria. Qualified suppliers are expected to sign and abide by Keppel’s Supplier Code of
Conduct, which is publicly available online.
Keppel worked closely with our customers and suppliers to mitigate the impacts of supply chain
disruptions due to the pandemic, labour shortages and the global energy crisis.
As part of our efforts to enhance sustainability performance within our supply chain, Keppel Corporation
also collaborated with UN Global Compact Network Singapore to provide carbon management training
for the Group’s suppliers from Small and Medium Enterprises.
Keppel has been progressively enhancing our identification and monitoring of the emissions generated
by our supply chain, and we are working towards disclosing all 15 relevant categories of Scope 3
emissions in our 2022 sustainability report.
34
Keppel Corporation Limited
Annual Report 2022
35
Group Overview
Sustainability Framework
Strategic Pillar: People and Community
Material Factor
Human Capital Management
Impact on SDGs
Material Factor
Health & Safety
Impact on SDGs
Approach
Keppel recognises that its people are fundamental to the Company’s performance. We seek to build a
highly trained workforce led by people-centric leaders. We are committed to building positive employee
well-being, upholding fair employment practices, and empowering a diverse and engaged workforce.
Highlights
The Group continued to conduct our annual Employee Engagement Survey, and performed well, with a
score of 84% in 2022, higher than Mercer’s global average of 80%. 88% of our staff indicated that they
are proud to work for Keppel.
Keppel is committed to being a fair employer. As of April 2022, all our business units in Singapore have
signed the Employers’ Pledge of Fair Employment Practices by the Singapore Tripartite Alliance for Fair
& Progressive Employment Practices.
We continued to foster a positive learning culture with Keppel’s Global Learning Festival and to
encourage employees to take charge of their careers through the Global Career Festival. In 2022,
the Group achieved an average of more than 24 hours of training per employee, higher than the target
of 20 hours. More regular performance conversations were also introduced between managers and
employees to drive sustained employee engagement and performance.
To support holistic employee well-being, the Company organised various well-being initiatives, which
include Financial Well-Being Month, Physical Well-Being Month, Mental Well-Being Month and
Appreciation Month.
Migrant workers are an important part of Keppel’s workforce, especially in the offshore and marine
sector. Keppel Offshore & Marine’s entities in Singapore were audited and certified to be in conformance
with the Dhaka Principles for Migration with Dignity for the responsible recruitment and employment of
migrant workers in 2022.
In recognition of how Keppel develops and looks after our people, Keppel Corporation was ranked
as one of the World’s Best Employers 2022 by Forbes and was awarded the SkillsFuture Employer
Award (Gold) 2022. Keppel Group was also re-certified as a Top Employer Singapore 2023 by the
Top Employers Institute.
Approach
Keppel is committed to providing a safe and healthy working environment. We believe in a pro-active
safety culture and advocate for continuous improvements in health and safety standards, both in our
operations and in the broader community. We also ensure high safety standards for our products and
services to safeguard customer health and safety.
Highlights
Keppel places the highest priority on the health and safety of our stakeholders. The Company’s
leadership sets the tone and leads by example in strengthening our safety culture. Recognising the
pivotal role played by front-line staff in building our safety culture, in 2022, we sharpened our focus to
engage and empower them to be more active in intervening and speaking up when they encounter any
unsafe act or practice.
The Group made significant progress in leveraging technology to digitalise key HSE processes, including
the reporting of hazards, further enhancing our efforts in empowering employees to speak up for safety.
In 2022, the total number of hazards reported via the mobile HSE application was significantly higher
compared to the year before.
Underscoring our proactive approach in designing and building safe products, and safeguarding the
health and safety of all our stakeholders, the Group developed guidelines in Design for Safety (DfS)
and has since applied it to all major developments in and out of Singapore.
Regrettably, despite our best safety efforts, the Group recorded three fatalities in two incidents at
our shipyard in Singapore in 2022. We have investigated the incidents and put in place measures
to prevent recurrence.
Strategic Pillar: People and Community
Material Factor
Community Development
Approach
Keppel believes that the Company does well when the community does well. We aim to uplift and
give back to communities wherever we operate, building lasting positive relationships and effective
partnerships, including through staff volunteerism. We invest in worthy causes, focusing in particular
on supporting education, caring for the underprivileged, and protecting the environment.
Highlights
In 2022, the Group invested around $4.3 million in social investment spending and industry
advancement, including close to $1.9 million disbursed through Keppel Care Foundation, the Group’s
philanthropic arm.
Since its establishment in 2012, Keppel Care Foundation has disbursed over $52 million in support of
worthy causes.
In view of the trend of ageing populations and the increasing number of dementia patients, in 2022,
Keppel pledged $1 million over three years to Dementia Singapore to support the needs of persons
with dementia and their caregivers.
We also launched the Living Well programme in Vietnam, in which Keppel Land and Keppel Infrastructure
collaborated to provide clean drinking water for about 20,000 villagers.
In Shanghai, China, employees from Keppel Land China and Keppel Capital China collaborated with
local organisations to deliver food items to the elderly and construction workers who had difficulty
accessing food and other daily necessities during the COVID-19-related lockdowns.
Keppel also committed $300,000 over three years to Gardens by the Bay to support public education
tours on nature and sustainability, and supported the Singapore Environment Council’s School Green
Awards, which serves as a platform for students to develop and showcase their environmental efforts.
In addition, Keppel Land extended the very well-received ‘R.I.S.E. to the Challenge’ public outreach
programme, which aims to raise awareness on rising sea levels and the pressing need for climate
action, for another two years.
Beyond financial support, Keppel staff also volunteer their time and services to the community. In
2022, Keppel Volunteers contributed more than 14,000 hours of community work, despite constraints
imposed by the COVID-19 pandemic.
Impact on SDGs
Social Investment Spending and Industry Advancement
by Project Type in 2022 (%)
Healthcare/Care for the Underprivileged
Environment
The Arts/Community Development Projects
Industry Advancement
Education
Total
$4.3 million
36.0
27.3
25.1
6.5
5.1
100.0
36
Keppel Corporation Limited
Annual Report 2022
37
Group Overview
Board of Directors
N
R
SS
Board Committee(s) served on:
Nominating Committee (Member);
Remuneration Committee (Member);
Board Sustainability and Safety Committee
(Member)
Academic & Professional Qualification(s):
Associate member of the Institute of Chartered
Accountants in England & Wales
Present Directorships (as at 1 January 2023):
Listed companies
Nil
Other principal directorships
Nil
Danny Teoh, 67
Chairman
Non-Executive and Non-Independent Director
Date of first appointment as a director:
1 October 2010
Date of last re-election as a director:
2 June 2020
Length of service as a director
(as at 31 December 2022):
12 years 3 months
SS
Board Committee(s) served on:
Board Sustainability and 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 2023):
Listed companies
Nil
Other principal directorships
Keppel Offshore & Marine Ltd (Chairman)
(appointment till 28 February 2023);
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)
Loh Chin Hua, 61
Executive Director and Chief Executive Officer
Date of first appointment as a director:
1 January 2014
Date of last re-election as a director:
22 April 2022
Length of service as a director
(as at 31 December 2022):
9 years
Major Appointments (other than directorships):
Nil
Past Directorships held over the preceding
5 years (from 1 January 2018 to
31 December 2022):
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
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 2018 to
31 December 2022):
Various fund companies under management
of Alpha Investment Partners Limited;
Various companies under Keppel Group
of companies
Others:
Nil
Board Committees
N
Nominating Committee
A
Audit Committee
R
Remuneration Committee
BR Board Risk Committee
SS
Board Sustainability and
Safety Committee
38
Keppel Corporation Limited
Board Committee(s) served on:
Remuneration Committee (Chairman);
Nominating Committee (Member)
R
N
Academic & Professional Qualification(s):
Master of Economics, University of Bonn, Germany;
Master of Business Administration, Haas School
of Business, University of California, Berkeley
Major Appointments (other than directorships):
Advisory Partner, Bain & Company Southeast Asia
Past Directorships held over the preceding
5 years (from 1 January 2018 to
31 December 2022):
Inchcape plc; Singapore Chinese Orchestra
Company Limited
Present Directorships (as at 1 January 2023):
Listed companies
Nil
Others:
Nil
Other principal directorships
Leap Philanthrophy Ltd; Advanced Micro Foundry
Pte. Ltd.; Delaware Consulting International CVBA;
Keppel Telecommunications & Transportation Ltd
Till Vestring, 59
Non-Executive and Lead Independent Director
Date of first appointment as a director:
16 February 2015
Date of last re-election as a director:
2 June 2020
Length of service as a director
(as at 31 December 2022):
7 years 11 months
Board Committee(s) served on:
Board Risk Committee (Chairman);
Audit Committee (Member)
BR
A
Academic & Professional Qualification(s):
Bachelor of Business Administration
(First Class Honours), University of Singapore
Present Directorships (as at 1 January 2023):
Listed companies
Nil
Other principal directorships
Keppel Capital Holdings Pte. Ltd.;
Eastspring Investments Group Pte. Ltd.
Veronica Eng, 69
Non-Executive and Independent Director
Date of first appointment as a director:
1 July 2015
Date of last re-election as a director:
2 June 2020
Length of service as a director
(as at 31 December 2022):
7 years 6 months
Board Committee(s) served on:
Nominating Committee (Chairman);
Remuneration Committee (Member)
N
R
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
Major Appointments (other than directorships):
Professor (Practice), NUS Business School
Past Directorships held over the preceding
5 years (from 1 January 2018 to
31 December 2022):
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
Past Directorships held over the preceding
5 years (from 1 January 2018 to
31 December 2022):
Association to Advance Collegiate Schools
of Business (AACSB) International
Jean-François Manzoni, 61
Non-Executive and Independent Director
Date of first appointment as a director:
1 October 2018
Date of last re-election as a director:
23 April 2021
Length of service as a director
(as at 31 December 2022):
4 years 3 months
Present Directorships (as at 1 January 2023):
Listed companies
Nil
Others:
Nil
Other principal directorships
IMD Foundation Board; IMD Scholarship
Foundation
Annual Report 2022
39
Group Overview
Board of Directors
SS
Board Committee(s) served on:
Board Sustainability and Safety Committee
(Chairman)
Major Appointments (other than directorships):
The United Republic of Tanzania in Singapore
(Honorary Consul)
Academic & Professional Qualification(s):
Degree in Naval Architecture and
Ocean Engineering, University of Glasgow,
United Kingdom
Present Directorships (as at 1 January 2023):
Listed companies
Singamas Container Holdings Ltd.;
COSCO Shipping Holding Co., Ltd.;
Wilmar International Limited
Other principal directorships
Pacific International Lines (Pte) Ltd;
PIL Pte. Ltd.
Past Directorships held over the preceding
5 years (from 1 January 2018 to
31 December 2022):
Enterprise Singapore (Board Member);
COSCO Shipping Energy Transportation Co., Ltd.;
Business China
Others:
National University of Singapore
(Pro-Chancellor); Singapore Chinese Chamber
of Commerce & Industry (Honorary President);
Immediate Past Chairman of Singapore
Business Federation
Teo Siong Seng, 68
Non-Executive and Non-Independent Director
Date of first appointment as a director:
1 November 2019
Date of last re-election as a director:
22 April 2022
Length of service as a director
(as at 31 December 2022):
3 years 2 months
Board Committee(s) served on:
Audit Committee (Chairman);
Board Risk Committee (Member)
A
BR
Major Appointments (other than directorships):
Nanyang Polytechnic (Board member);
Mount Alvernia Hospital (Board 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
Past Directorships held over the preceding
5 years (from 1 January 2018 to
31 December 2022):
Singapore Institute of Directors (Chairman);
Housing & Development Board;
Accounting and Corporate Regulatory Authority
Tham Sai Choy, 63
Non-Executive and Independent Director
Date of first appointment as a director:
1 November 2019
Date of last re-election as a director:
22 April 2022
Length of service as a director
(as at 31 December 2022):
3 years 2 months
Present Directorships (as at 1 January 2023):
Listed companies
DBS Group Holdings Limited
Others:
Nil
Other principal directorships
DBS Bank Ltd.; DBS Bank (China) Limited;
DBS Foundation Ltd; EM Services Pte Ltd
(Chairman); Keppel Offshore & Marine Ltd
(appointment till 28 February 2023);
Singapore International Arbitration Centre
Board Committee(s) served on:
Audit Committee (Member);
Board Risk Committee (Member);
Remuneration Committee (Member)
A
BR
R
Academic & Professional Qualification(s):
Bachelor of Law (Honours), University of Singapore
Present Directorships (as at 1 January 2023):
Listed companies
Nil
Other principal directorships
HSBC Bank (Singapore) Limited;
Singapore Totalisator Board;
Keppel Land Limited
Penny Goh, 70
Non-Executive and Independent Director
Date of first appointment as a director:
2 January 2020
Date of last re-election as a director:
2 June 2020
Length of service as a director
(as at 31 December 2022):
3 years
40
Keppel Corporation Limited
Major Appointments (other than directorships):
Allen & Gledhill LLP (Senior Adviser)
Past Directorships held over the preceding
5 years (from 1 January 2018 to
31 December 2022):
Keppel REIT Management Limited
(the Manager of Keppel REIT);
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
Major Appointments (other than directorships):
Fullerton India Credit Company Limited, India
(Adviser)
Past Directorships held over the preceding
5 years (from 1 January 2018 to
31 December 2022):
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; Pierfront Capital
Mezzanine Fund Pte Ltd; Pierfront Capital
Fund Management Pte. Ltd.; KP Management
(GL) Pte. Ltd.; KPCF Investments Pte. Ltd.;
Commonwealth Bank of Australia
Others:
Nil
Major Appointments (other than directorships):
Nil
Past Directorships held over the preceding
5 years (from 1 January 2018 to
31 December 2022):
Nil
Others:
Nil
Board Committee(s) served on:
Audit Committee (Member);
Board Risk Committee (Member)
A
BR
Academic & Professional Qualification(s):
Qualified as a Member of the Institute of
Chartered Accountants in England and Wales;
Member of the Institute of Chartered
Accountants, India
Present Directorships (as at 1 January 2023):
Listed companies
Standard Chartered PLC, London
Other principal directorships
Keppel Infrastructure Holdings Pte. Ltd;
Singapore Life Holdings Pte. Ltd.;
Singlife Financial Advisers Pte. Ltd. (Chairman)
Shirish Apte, 70
Non-Executive and Independent Director
Date of first appointment as a director:
1 July 2021
Date of last re-election as a director:
22 April 2022
Length of service as a director
(as at 31 December 2022):
1 year 6 months
SS
Board Committee(s) served on:
Board Sustainability and Safety Committee
(Member)
Academic & Professional Qualification(s):
Master Business Administration and
General Management, Grenoble Business
School (GEM), France
Present Directorships (as at 1 January 2023):
Listed companies
Nil
Other principal directorships
Delta Dore, France; Aveva Group PLC,
United Kingdom; Luminous Power
Technologies (P) Ltd, India (Chairman)
Olivier Blum, 52
Non-Executive and Independent Director
Date of first appointment as a director:
1 May 2022
Date of last re-election as a director:
N.A.
Length of service as a director
(as at 31 December 2022):
8 months
BR
Board Committee(s) served on:
Board Risk Committee (Member)
Academic & Professional Qualification(s):
Bachelor of Science Degree in Information
Systems, National University of Singapore
Masters in Business Administration,
Nanyang Technological University
Major Appointments (other than directorships):
Steering Committee of Asian Institute of
Digital Finance (Committee Member)
Past Directorships held over the preceding
5 years (from 1 January 2018 to
31 December 2022):
Nil
Present Directorships (as at 1 January 2023):
Listed companies
Nil
Others:
Nil
Other principal directorships
Singapore Clearing House Pte Ltd;
Evolve Digitech Pte Ltd
Jimmy Ng, 58
Non-Executive and Independent Director
Date of first appointment as a director:
1 May 2022
Date of last re-election as a director:
N.A.
Length of service as a director
(as at 31 December 2022):
8 months
Annual Report 2022
41
Group Overview
Keppel Group Boards of Directors
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
Keppel REIT Management
(Manager of Keppel REIT)
Tan Swee Yiow
Chairman
Senior Managing Director of
Urban Development,
Keppel Corporation
Ian Roderick Mackie
Lead Independent Director
Alan Rupert Nisbet
Independent Director
Christina Tan
Chief Executive Officer,
Keppel Capital
Mervyn Fong
Independent Director
Yoichiro Hamaoka
Independent Director
Cindy Lim
Chief Executive Officer,
Keppel Infrastructure
Keppel DC REIT Management
(Manager of Keppel DC REIT)
Christina Tan
Chairman
Chief Executive Officer,
Keppel Capital
Kenny Kwan
Lead Independent Director
Lee Chiang Huat
Independent Director
Tan Tin Wee
Chief Executive,
National Supercomputing Centre, Singapore
Dileep Nair
Independent Director
Low Huan Ping
Independent Director
Yeo Siew Eng
Independent Director
Thomas Pang Thieng Hwi
Chief Executive Officer,
Keppel Telecommunications & Transportation
Keppel Infrastructure Fund
Management (Trustee-manager
of Keppel Infrastructure Trust)
Daniel Cuthbert Ee Hock Huat
Chairman
Mark Andrew Yeo Kah Chong
Independent Director
Kunnasagaran Chinniah
Independent Director
Susan Chong Suk Shien
Chief Executive Officer,
Greenpac (S) Pte Ltd
Adrian Chan
Independent Director
Christina Tan
Chief Executive Officer,
Keppel Capital
Keppel Pacific Oak US REIT
Management (Manager of
Keppel Pacific Oak US REIT)
Peter McMillan III
Chairman
Co-founder,
Pacific Oak Capital Advisors LLC
Soong Hee Sang
Lead Independent Director
Kenneth Tan Jhu Hwa
Co-Managing Partner and Managing Director,
Southern Capital Group Private Limited
Sharon Wortmann
Independent Director
Lawrence Sperling
Independent Director
Bridget Lee
Chief Executive Officer,
Keppel Capital Alternative Asset
42
Keppel Corporation Limited
Keppel Offshore & Marine
(until 28 February 2023)
Keppel Telecommunications
& Transportation
M1
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
Manjot Singh Mann
Chief Executive Officer,
M1
Chua Hsien Yang
Managing 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
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
Managing Director of
Group Mergers & Acquisitions,
Keppel Corporation
Chor How Jat
Chief Operating Officer
(effective 27 February 2023)
Keppel Land
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
Francois van Raemdonck
Director of Group
Strategy and Development,
Keppel Corporation
Loh Chin Hua
Chairman
Chief Executive Officer,
Keppel Corporation
Chan Hon Chew
Chief Financial Officer,
Keppel Corporation
Manjot Singh Mann
Chief Executive Officer
Tan Wah Yeow
Independent Director
Guy Daniel Harvey Samuel
Independent Director
Thomas Pang Thieng Hwi
Chief Executive Officer,
Keppel Telecommunications & Transportation
Gerald Yong
Chief Executive Officer,
Cuscaden Peak Investments Private Limited
Janice Wu
Executive Vice President,
Corporate Development,
Cuscaden Peak Investments Private Limited
Annual Report 2022
43
Group Overview
Keppel Technology Advisory Panel
The Keppel Technology Advisory Panel
supports Keppel’s transformation
initiatives through technology foresight.
Established in 2004, the Keppel Technology
Advisory Panel (KTAP) brings together
thought leaders and business veterans from
key industries relevant to Keppel. Drawing
from the diverse experience, knowledge and
network of its members, KTAP supports
Keppel’s transformation initiatives under
Vision 2030 and efforts to stay abreast of
the changing global technology landscape.
Assisted by Keppel Technology & Innovation,
as well as innovation teams across the Group,
KTAP guides the process of technology
foresight, providing input for innovation
priorities under Vision 2030. KTAP’s work
includes driving the Group’s exploration of
emerging trends in technology and industry
and providing advice for innovation projects.
Panel members are also heavily involved
in nurturing the Group’s collaboration with
external innovation ecosystems globally.
Through KTAP, Keppel gains early access
to strategic innovations under development
and receives a continuous injection of new
ideas and perspectives.
KTAP convenes Keppel’s annual technology
foresight conference, which brings together
thought leaders across academia, startups
and industries to share their perspectives
on emerging technology and megatrends.
At the 2022 conference, over 25 distinguished
speakers shared their expertise, ideas and
vision of the future with over 300 participants,
including Keppel’s Board, management
and key leadership teams across our
lines of business. A wide range of topics
was discussed at this platform, including
connectivity technologies, such as the
metaverse, quantum computing and Web3;
the next horizon for the energy transition;
the evolving carbon economy; impact
investing and sustainability; as well as
new business models for service delivery.
Moving forward, KTAP will continue to assess
technology developments and explore
groundbreaking ideas in the aforementioned
areas, and also drive technology foresight
in new domains as part of Keppel’s efforts
to fuel the momentum for innovation
across the Group.
From left: Mr Ed Ansett, Mr Danny Teoh (Chairman of Keppel Corporation), Mr Chua Kee Lock, Dr Ng Wun Jern (Chairman of KTAP), Professor Cheong Koon Hean
and Mr Loh Chin Hua (CEO of Keppel Corporation). Not in picture: Dr Romain Debarre.
44
Keppel Corporation Limited
Topics discussed at 2022’s KTAP technology foresight conference included connectivity technologies such as Web3,
Metaverse and quantum computing.
KTAP Members
Dr Ng Wun Jern (Chairman)
Dr Romain Debarre
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.
Chua Kee Lock
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 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 Debarre is the Managing Director of the
Kearney Energy Transition Institute and a
Partner in Kearney’s Energy & Process Industries
Practice. He possesses diverse experience in
energy, business strategy and scientific research.
He is a recognised energy expert who forges
close ties between governments, companies
and academics to leverage technological
opportunities and reduce carbon emissions.
Professor Cheong Koon Hean
Professor Cheong is concurrently chairman
of Ministry of National Development’s
Centre for Livable Cities Advisory Panel and
Singapore University of Technology and Design’s
Lee Kuan Yew Centre for Innovative Cities. She
is also a board trustee of National University of
Singapore, a council member of the International
Federation for Housing and Planning and a
board member of CapitaLand Group. She was
formerly CEO of the Housing & Development
Board from 2010 to 2020 overseeing the
development and 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.
Ed Ansett
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.
Annual Report 2022
45
Group Overview
Senior Management
Keppel Corporation
Loh Chin Hua
Chief Executive Officer
Chan Hon Chew
Chief Financial Officer
Corporate Services
Tan Swee Yiow
Senior Managing Director
Urban Development
Kevin Chng
Deputy Chief Financial Officer
(effective 1 March 2023)
Francois van Raemdonck
Director
Group Strategy & Development
Managing Director
Keppel Technology & Innovation
Chua Hsien Yang
Managing Director
Group Mergers & Acquisitions
Yeo Meng Hin
Director
Group Human Resources
Ho Tong Yen
Chief Sustainability Officer
Director
Group Corporate Communications
Caroline Chang
General Manager & Head
Group Legal
Tok Soo Hwa
General Manager
Group Control & Accounts
Kenneth Lui
General Manager
Group Risk & Compliance
Tay Guan Chew
General Manager
Group Tax
Jason Chin
General Manager
Group Information Technology
Martin Ling
General Manager
Group Cyber Security
Jaggi Ramesh Kumar
General Manager
Group Health, Safety & Environment
Aw Boon Tiong
General Manager
Group Treasury
46
Keppel Corporation Limited
Raghupathi Rao
General Manager
Group Internal Audit
Eric Goh
Chief Representative, China
Linson Lim
Chief Representative, Vietnam
Ho Kiam Kheong
Chief Representative, India
Robert Sung
Chief Representative, Korea
(effective 1 February 2023)
Teo Eng Cheong
Chief Executive Officer
Sino-Singapore Tianjin Eco-City
Investment And Development
Asset Management
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
Sharon Tay
Chief Executive Officer
(Keppel Asia Infrastructure Fund)
Keppel Capital Alternative Asset
Jee Kim
Chief Executive Officer
(Core Infrastructure)
Keppel Capital Alternative Asset
Carina Lim
Chief Executive Officer
(Keppel Education Asset Fund)
Keppel Capital Alternative Asset
Energy & Environment
Chris Ong
Chief Executive Officer
Keppel Offshore & Marine1
Kevin Chng
Chief Financial Officer
Keppel Offshore & Marine1
Chor How Jat
Chief Operating Officer
Keppel Offshore & Marine1
Tan Leong Peng
Managing Director
New Energy/Business
Keppel Offshore & Marine1
Ron Maclnnes
President
Keppel Offshore & Marine USA1
Keppel Letourneau1
Keppel AmFELS1
Marlin Khiew
President
Keppel FELS Brasil1
Leong Kok Weng
President
Keppel Philippines Marine1
Ng Seng Chong
President
Keppel Nantong Shipyard1
Keppel Nantong Heavy Industries1
Cindy Lim
Chief Executive Officer
Keppel Infrastructure
Max Ng
Acting Chief Financial Officer
Keppel Infrastructure
Tan Boon Leng
Managing Director
Projects, Supply Chain and HSSE
Keppel Infrastructure
Janice Bong
Managing Director
Power & Renewables
Keppel Infrastructure
Jackson Goh
Managing Director
Environment
Keppel Infrastructure
Chua Yong Hwee
Managing Director
New Energy
Keppel Infrastructure
1 Until 28 February 2023.
Goh Eng Kwang
Executive Director
Water Services
Keppel Infrastructure
Ng Yong Seng
Senior General Manager, Greater China
Keppel Infrastructure
Urban Development
Louis Lim
Chief Executive Officer
Keppel Land
Tan Boon Ping
Chief Financial Officer
Keppel Land
Samuel Henry Ng
President
Singapore and Developed Markets
Keppel Land
Head
Sustainable Urban Renewal & Nearshore
Development
Keppel Land
Wong Liang Kit
President, China
Keppel Land
Head, Large-Scale Integrated
Development/Townships
Keppel Land
Joseph Low
President, Vietnam
Keppel Land
Ho Kiam Kheong
President, India
Keppel Land
Allen Tan
President, Indonesia & Regional Investments
Keppel Land
Head, Urban Living
Keppel Land
Keith Low
Head, Retail
Keppel Land
Nathaniel Farouz
Head, Senior Living
Keppel Land
Connectivity
Unions
Thomas Pang
Chief Executive Officer
Keppel Telecommunications & Transportation
Keppel FELS Employees Union
(until 28 February 2023)
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
(until 28 February 2023)
Eileen Yeo
General Secretary
NTUC Central Committee Member
Singapore Industrial &
Services Employees’ Union
Muhammad Shariffudin
President
Richard Sim
General Secretary
Desmond Tan
Executive Secretary
Union of Power & Gas Employees
Tay Seng Chye
President
Abdul Samad Bin Abdul Wahab
General Secretary
S. Thiagarajan
Executive Secretary
Wong Man Li
Chief Financial Officer
Keppel Telecommunications & Transportation
Wong Wai Meng
Chief Executive Officer
Keppel Data Centres
Michael Martin Coleman SR
Chief Technology Officer
Keppel Data Centres
Jimmy Tan
Chief Operating Officer
Keppel Data Centres
Jonathan Sim
Head (North Asia)
Keppel Data Centres
Loo Tong Mun
Senior Vice President
Keppel Networks
Manjot Singh Mann
Chief Executive Officer
M1
Chief Digital Officer
Keppel Corporation
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
Jan Morgenthal
Chief Digital Officer
M1
Annual Report 2022
47
Group Overview
Investor Relations
We build trust and create value through
active and transparent communication
with the investment community.
Shareholding by Investors (%)
In 2022, as the Company accelerated the
execution of Vision 2030, we continued
to effectively engage shareholders in
the investment community to keep
them apprised of the Company’s latest
developments and seek their feedback.
Stakeholder Engagement
The Company employs various platforms
to provide current and prospective investors
with information necessary to make
well-informed investment decisions,
with an emphasis on timely, accurate and
transparent disclosure of information.
During the year, we held about 175 in-person
and virtual meetings with institutional
investors from Singapore, Malaysia,
Hong Kong, Japan, the United Kingdom
(UK), the United States (US), and other
countries. With the easing of travel
and meeting restrictions, we also held
site visits and travelled overseas on
investor roadshows.
In addition, we participated in the 29th
Annual CITIC CLSA Flagship Investors’
Forum 2022, and hosted an investor tour
of the Keppel Marina East Desalination
Plant in Singapore with Citigroup as well as
investor visits to the Group’s overseas assets.
14 sell-side research houses currently
provide coverage on Keppel Corporation.
In addition to semi-annual results briefings
and voluntary business updates in the
intervening quarters, we also held briefings
for media and analysts on the proposed
offshore and marine transactions. We
continued to actively engage sell-side analysts,
working with them to help the investment
community better understand Keppel’s
strategy and progress towards Vision 2030.
In 2022, we held our virtual Annual General
Meeting (AGM) and separately also convened
a virtual Extraordinary General Meeting
(EGM) on the proposed transaction involving
the Asset Co transfer and the proposed
combination of Keppel Offshore & Marine
(Keppel O&M) and Sembcorp Marine, as well
as the proposed distribution in specie of
Sembcorp Marine shares. At these meetings,
we implemented voting by electronic means
to enable shareholders to exercise their
voting rights effectively.
Shareholders were provided opportunities to
submit questions pertaining to the proposed
resolutions prior to as well as live at the
virtual AGM and EGM. The responses to
48
Keppel Corporation Limited
substantial and relevant pre-submitted
questions were addressed in writing,
released on SGXNet and made available
on our website prior to the meetings.
In addition, our CEO gave presentations,
and the Board addressed all key questions
raised by shareholders during these
meetings. The presentation materials,
voting results and meeting minutes were
also released on SGXNet and our website.
The Company values regular and constructive
dialogue with retail shareholders. Since
2017, the Company has been collaborating
with the Securities Investors Association
(Singapore) (SIAS) to hold briefings for
retail shareholders. In 2022, the Company
continued to hold its annual briefing hosted
by SIAS on the Company’s performance
and developments, as well as a separate
dialogue session with retail shareholders
on the aforementioned offshore & marine
transactions. The two events hosted by
SIAS drew a total of close to 170 participants.
All materials presented on these occasions
were made available on SGXNet and the
Company’s website in a timely manner,
to ensure fair disclosure of information
for the benefit of all shareholders.
Keppel has been a long-term sponsor of
the SIAS Investor Education Programme,
through which more than 2,500 retail
shareholders benefit from complimentary
SIAS memberships each year, providing
them with access to a wide range of webinars,
workshops, and useful resources for investors.
Institutions
Retail
Total
49.2
50.8
100.0
Shareholding by Geography (%)
Singapore
Asia (ex Singapore)
North America
Europe
Others*
Total
33.6
3.2
11.6
8.5
43.1
100.0
* Others comprise the rest of the world, as well as
unidentified holdings and holdings below the
analysis threshold as at 10 February 2023.
Mr Till Vestring, Lead Independent Director, and Mr Loh Chin Hua, CEO, accepted the Singapore Corporate Governance Award
(Big Cap) on behalf of the Company, and the Investors’ Choice Outstanding CEO Award, respectively.
Also pictured: Guest-of-Honour, Mr Alvin Tan, Minister of State, Ministry of Culture, Community and Youth and Ministry of Trade
and Industry (third from left), and Mr David Gerald, President and CEO of SIAS (first from left).
Recognition for Corporate
Governance Practices
As an affirmation of Keppel’s continuous
efforts to improve corporate governance
practices, the Company received a number
of awards in 2022 for its corporate
governance practices, including open and
transparent shareholder communications,
as well as robust sustainability practices.
At the SIAS Investors’ Choice Awards 2022,
Keppel Corporation was conferred Winner
of the Singapore Corporate Governance
Award (Big Cap) for the second consecutive
year, while our CEO Mr Loh Chin Hua
was presented the inaugural Investors’
Choice Outstanding CEO Award.
Keppel Corporation also won the Best
Annual Report (Gold, Large Cap) Award at
the Singapore Corporate Awards 2022.
Investor Relations Resources
All announcements are made available on
our corporate website immediately after they
are released to SGXNet to ensure fair, equal
and timely dissemination of information.
In 2022, the Company conducted live
webcasts of our half-yearly results briefings,
and media and analyst teleconferences for
our 1Q and 3Q voluntary business updates.
Archives of the webcasts, management
speeches and presentation materials
were made available at our website on
the same day the results and business
updates are released on SGXNet.
Transcripts of the question-and-answer
sessions at these briefings were also
Keppel’s senior management actively engaged the investment community in 2022, via results briefings and business update
conferences, as well as in-person and virtual meetings.
released on SGXNet and posted on
Keppel’s website in a timely manner.
Our mobile-friendly website (www.kepcorp.com)
serves as an accessible repository of
company information, such as announcements,
half-yearly results and voluntary business
updates, annual reports, investor events,
stock and dividend information, and
investor presentation slides. Shareholders
and investors can also subscribe to
email alerts or reach out to Keppel’s
Investor Relations personnel via the
dedicated email address
(investor.relations@kepcorp.com) or
the contact number found at our website.
Shareholder Information
As at 10 February 2023, institutions
formed 49.2% of our shareholder base,
while retail investors accounted for the
remaining 50.8%. Shareholders in Singapore
held approximately 33.6% of our issued
capital, while those in the rest of Asia,
North America, and Europe held 3.2%,
11.6%, and 8.5%, respectively.
Investor Relations Calendar
The following key events were held in 2022 to engage investors and analysts:
Q1
4Q & FY 2021 results
conference and live webcast
Post-results meeting hosted
by CGS-CIMB and other
meetings with investors
Q2
1Q 2022 business update
teleconference for media
and analysts
Post-business update meeting
hosted by Citigroup and other
meetings with investors
Non-deal roadshow to New
York hosted by Citigroup
Live webcast of 54th AGM,
held by electronic means
Media and analyst briefing
on the proposed offshore
and marine transactions
Q3
2Q & 1H 2022 results
conference and live webcast
Post-results meeting hosted
by Macquarie and other
meetings with investors
Non-deal roadshow to London
hosted by CGS-CIMB
Citi-SGX-REITAS REITs/
Sponsors Forum investor tour
of the Keppel Marina East
Desalination Plant in Singapore
Annual briefing for retail
shareholders, hosted by SIAS
Participation in the 29th
Annual CITIC CLSA Flagship
Investors’ Forum 2022
Q4
3Q & 9M 2022 business
update teleconference for
media and analysts
Post-business update
meeting hosted by HSBC and
other meetings with investors
Pre-EGM dialogue session
for retail shareholders,
hosted by SIAS
Live webcast of the EGM on
the proposed offshore and
marine transactions held by
electronic means
Annual Report 2022
49
Performance Review
Operating &
Market Review
Since Vision 2030 was announced
in 2020, Keppel has made significant
progress in accelerating the execution
of the Vision, with a view to achieving
its targets by 2025.
Asset Management
We tap third-party funds for growth, while delivering
sustainable returns to investors and unitholders.
Refer to pages 52 to 55
Energy & Environment
We provide energy and environmental solutions that
are essential for sustainable development.
Refer to pages 56 to 61
Urban Development
We provide sustainable and innovative urban space
solutions, with a growing focus on sustainable
urban renewal and senior living.
Refer to pages 62 to 65
Connectivity
We connect people and businesses in the
digital economy.
Refer to pages 66 to 69
50
Keppel Corporation Limited
Vision 2030: The Next Phase
In 2022, Keppel continued to advance its
Vision 2030 plans, simplifying and focusing
its business, investing in new growth areas
while executing its asset-light strategy.
During the year, the Group successfully
divested Keppel Logistics1. This was
followed by Keppel Offshore & Marine’s
combination with Sembcorp Marine,
and the resolution of the legacy rig assets
and associated receivables, which were
completed by 28 February 2023.
In the next phase of Vision 2030, Keppel
is accelerating its transformation from a
conglomerate of diverse parts into a global
asset manager and operator, with strong
capabilities in energy and environment,
urban development and connectivity,
which is well positioned to seize
opportunities through creating solutions
for a sustainable future.
Executing Our Strategy
We continue to grow our assets under
management (AUM), expanding our asset
classes and growing recurring fee income.
As at 31 December 2022, our AUM had
crossed $50 billion, and we are working
towards a target of $200 billion by the end
of 2030.
As a centre piece of Keppel’s asset-light
business, asset management is increasingly
playing a critical role as a horizontal that
pulls all operating units together to deliver
value, as one integrated company. During
the year, we announced about $2.8 billion
worth of energy & environment and
sustainable urban renewal-related
investments, jointly undertaken by
Keppel together with the private funds
and/or business trust managed by
Keppel Capital.
The investments included onshore and
offshore wind energy assets in Europe,
a waste management services platform
in Korea as well as the development of
Singapore’s first hydrogen-ready advanced
combined-cycle power plant, among others.
The ability to tap third-party funds allows us
to make significant investments in our
growth areas without relying solely on
Keppel’s balance sheet.
Furthering our ambitions in renewables,
clean energy and decarbonisation solutions,
we commenced Singapore’s first renewable
energy import, and are exploring green
ammonia and green hydrogen solutions with
international partners as we prepare the
Group to support the low-carbon economy.
Keppel Land continued its transformation
from a traditional real estate developer into
an asset-light provider of innovative and
sustainable urban space solutions. In 2022,
it expanded its sustainable urban renewal
offerings in Korea and also embarked on
its first senior living community in China.
We are expanding our data centre portfolio
and exploring ways to reduce the carbon
footprint of data centres. During the year,
we acquired new data centre assets in China
and the UK. We also made good progress
in the development of the Bifrost Cable
System, which is set to meet the growing
digital connectivity needs between
Southeast Asia and the west coast of
North America, when completed in 2024.
Meanwhile, M1 continues to advance
on its multi-year transformation from
a traditional telco into a cloud native
connectivity platform. In 2022, M1’s
enterprise business grew steadily to
become a significant revenue contributor.
At year end, M1 had achieved over 95%
outdoor coverage in its 5G Standalone
network rollout in Singapore and launched
various 5G solutions providing fast-speed
connectivity, immersive metaverse
experiences and edge computing solutions.
To fully harness the Group’s synergies,
we are driving integration across our
operating units through the establishment
of the One Real Estate, One Infrastructure
and One Data Centre teams, which will
evaluate and execute on opportunities
in our focus areas.
Right Space, Right Time
With the world focusing increasingly on
sustainable development, climate change
and digitalisation, Keppel is in the right
space and at the right time to provide
solutions which are good for the planet,
people and the Company. Guided by
our focus on sustainability, leveraging
an asset-light model, and harnessing
technology and the Group’s strong track
record, Keppel will contribute to advancing
sustainability, while accelerating growth.
1
Includes Keppel Logistics’ businesses in Singapore, Malaysia, Vietnam and Australia, as well as UrbanFox.
Annual Report 2022
51
Performance Review
Operating & Market Review
Asset
Management
We tap third-party funds for growth,
while delivering sustainable returns
to investors and unitholders.
Earnings Highlights ($ million)
Revenue
EBITDA
Operating Profit
Profit before Tax
Net Profit
2022
195
94
91
340
311
2021
162
116
113
327
301
Progress in 2022
Focus for 2023/2024
• Assets under management (AUM) grew to
$50 billion1 from $42 billion as at end-2021.
• Set AUM target of $200 billion by end-2030.
• Completed over $7.7 billion in acquisitions
and divestments across different asset classes.
• Listed REITs and Trust continued to drive
value, delivering sustainable returns
to unitholders.
• Keppel Capital became a signatory to the
United Nations-supported Principles for
Responsible Investment.
• Leveraged Keppel ecosystem to originate
two new flagship funds — Keppel Core
Infrastructure Fund (KCIF) and Keppel
Sustainable Urban Renewal Fund (KSURF).
• Harness the strengths and capabilities of the
Group to grow AUM and expand sources of
recurring income.
• Enhance sustainability efforts in line with
Keppel’s Vision 2030 and continue to create
long-term value for investors.
• Grow new flagship funds KCIF and KSURF.
• Launch the follow-on Keppel Asia
Infrastructure Fund II.
52
Keppel Corporation Limited
Keppel announced $2.8 billion worth of energy & environment and sustainable urban renewal-related investments, jointly undertaken by Keppel and the Keppel Capital-managed private funds
and business trust.
One of Keppel Capital’s key strengths is its ability
to harness the synergies of the Keppel ecosystem
of Developer-Operator-Manager capabilities.
The Asset Management arm of
Keppel Corporation comprises
Keppel Capital, as well as the Group’s
holdings in the listed REITs and
business trust, and private funds.
While 2022 was a turbulent year for the
international economy, with heightened
geopolitical tensions and economic
uncertainty over rising interest rates and
inflationary pressures, Keppel Capital’s
listed entities and private funds successfully
completed over $7.7 billion in acquisitions
and divestments across different asset
classes. As at end-2022, Keppel Capital
achieved its 2022 target AUM1 of $50 billion.
With global markets grappling with volatility
and uncertainty, the Group saw an increased
demand for real assets with long-term
steady cash flows, which provide resilient
and stable portfolio returns.
Keppel Capital’s investment discipline and
diversification across quality real asset
classes of infrastructure, real estate and
data centres in key geographies reinforced
its resilience amidst challenging conditions.
2022 also saw growing international focus
on climate action, sustainable urbanisation
and the circular economy, as well as
increasing digitalisation. These macrotrends
have increased the demand for assets
and businesses that Keppel is involved in,
including data centres, renewable energy,
alternative assets, and prime real estate,
further enhancing Keppel Capital’s unique
value proposition.
During the year, Keppel announced about
$2.8 billion worth of energy & environment
and sustainable urban renewal-related
investments, jointly undertaken by Keppel
together with the Keppel Capital-managed
private funds and/or business trust.
Keppel Capital has also been
aligning itself with global initiatives,
and is now a signatory to the
United Nations-supported Principles for
Responsible Investment, in addition to
its commitment to the United Nations
Global Compact. Also, as a CDP capital
markets signatory, Keppel Capital
continues to play its part in driving
corporate environmental transparency
toward a low-carbon, sustainable future.
One of Keppel Capital’s key strengths is
its ability to harness the synergies of the
Keppel ecosystem of Developer-Operator-
Manager capabilities. Leveraging these
capabilities, two new flagship funds
were conceptualised during the year –
the Keppel Core Infrastructure Fund (KCIF)
and the Keppel Sustainable Urban Renewal
Fund (KSURF). Both funds have attracted
positive interest from global investors.
1 Gross asset value of investments and uninvested capital commitments on a leveraged basis to project fully-invested AUM.
Annual Report 2022
53
Performance Review
Operating & Market Review
Asset Management
KDC Fund II entered a strategic partnership with Heying, a wholly-owned subsidiary of Tianjin Zhengxin Group, to jointly develop Huailai Data Centre, a greenfield data centre in Greater Beijing.
KCIF aims to deliver a stable yield
with long-term sustainable returns by
investing in high-quality investments
with predominantly contracted and
stable revenues. This strategy leverages
Keppel’s expertise, network, proprietary
technologies and deep operational
insights to generate added value for
the fund through prudent investment,
operational enhancement and
best-in-class management of quality
infrastructure assets.
KSURF seeks to decarbonise buildings
through implementing solutions that
enhance energy efficiency and achieve
sustainability targets while delivering
financial returns. With a ‘brown-to-green’
strategy focused on the commercial real
estate in Asia Pacific, this sustainability-
dedicated fund is attracting keen interest
from investors.
Real Estate
In 2022, Keppel REIT expanded its portfolio
with the acquisition of KR Ginza II
(formerly known as Ginza 2-chome),
marking Keppel REIT’s entry into the Tokyo
office market – a strategic move to enhance
geographical and income diversification.
With a CASBEE1 A rating, the asset reflects
Keppel REIT’s commitment towards
acquiring green and energy-efficient assets.
Exemplifying Keppel’s asset-light business
model, Keppel Land collaborated with the
Group’s private funds, the Keppel Asia
Macro Trends Fund IV (KAMTF IV) and
the KB Bank Discretionary Fund, to jointly
acquire Samhwan Building, a freehold
office tower in Seoul, South Korea. Keppel
will undertake asset enhancement initiatives
and refurbishment works to enhance the
asset’s operational efficiency, performance
and value. With the asset well positioned to
benefit from the rising demand for quality
office spaces in Seoul, this joint investment
is a valuable addition to Keppel Capital,
which has managed close to $3.4 billion of
assets in South Korea since 2004.
In line with Keppel’s asset-light business
model, Keppel Land, Keppel Vietnam Fund
(KVF) and a co-investor of KVF acquired
three residential land sites in Hanoi,
on which the Group will develop about
1,260 homes.
Meanwhile, Keppel Pacific Oak US REIT
(KORE) completed the divestments of
Powers Ferry and Northridge Center I & II
in Atlanta, Georgia, at prices above their
last valuations conducted in 2021.
This is in line with the Manager’s portfolio
optimisation strategy, and improves
KORE’s financial flexibility.
Data Centres
The rapid growth of cloud computing
platforms and artificial intelligence has
accelerated the trend of digitalisation,
driving demand for quality and sustainable
data centres. Keppel DC REIT continued
to grow its portfolio with acquisitions in
China and the UK. In the UK, Keppel DC
REIT acquired a data centre in London,
strengthening the REIT’s presence in the
top global data centre hub of London.
Strengthening its presence in Asia Pacific,
Keppel DC REIT also acquired two data
centres in Guangdong, one of China’s
most established data centre markets
and a major technology hub.
On the private funds side, Keppel Data
Centre Fund II (KDC Fund II) closed with
US$1.1 billion of total commitments,
including co-investment capital. The fund
attracted commitments from a diverse
group of institutional investors in Asia and
Europe, including the Asian Infrastructure
Investment Bank. By collaborating
with Keppel Data Centres to leverage
their technical know-how in data centre
management and operations, as well as
their expertise in developing green,
energy-efficient data centres, Keppel Capital
is able to deliver a wider range of client
services as well as higher investor returns.
During the year, KDC Fund II entered a
strategic partnership with Heying, a
wholly-owned subsidiary of Tianjin Zhengxin
Group, to jointly develop Huailai Data Centre,
a greenfield data centre in Greater Beijing,
China’s tier 1 data centre market. In line
with Keppel’s commitment to sustainability,
the data centre will be equipped with
energy-saving technology capable of
reducing energy consumption by 50%
or more compared to traditional chilled
water systems.
1 Comprehensive Assessment System for Built Environment Efficiency.
54
Keppel Corporation Limited
Infrastructure continues to be an exciting space
for Keppel, with decarbonisation and sustainable
urbanisation trends accelerating demand for such
essential real assets.
Infrastructure
Keppel Infrastructure Trust (KIT) enhanced
its portfolio with the completion of five
acquisitions in 2022. The acquisitions extend
KIT’s footprint into new geographies, namely
Germany, Norway, Sweden, the Kingdom of
Saudi Arabia and South Korea, and marked
its maiden participation in the renewable
energy sector. The transactions include two
wind farm acquisitions in Europe, namely
a 20.5% stake in an offshore wind farm in
Germany and a 13.4% stake in a European
onshore wind platform comprising three
wind farm assets across Norway and
Sweden. KIT also completed its minority
and non-controlling investment in the
Aramco Gas Pipelines Company in the
Kingdom of Saudi Arabia, a strong and
growing business underpinned by one of
the world’s largest reserves of natural gas.
KIT collaborated with Keppel Asia
Infrastructure Fund (KAIF) and Keppel
Infrastructure (KI) to jointly acquire Eco
Management Korea Holdings (EMK), a
waste management and recycling services
provider with six waste-to-energy plants and
five sludge drying facilities in South Korea.
Beyond income diversification, the
acquisition supports both South Korea’s
green agenda and Keppel’s Vision 2030.
In Singapore, KIT completed the acquisition
of the remaining 30% stake in SingSpring
Desalination Plant, enhancing the
operational and business continuity of the
asset. KIT has also signed a non-binding
term sheet with KI to acquire a 50%
equity stake in the Keppel Marina East
Desalination Plant, Singapore’s first and
only large-scale dual mode plant which
can treat both seawater and rainwater
drawn from the Marina Reservoir.
During the year, KAIF together with its
co-investor and Keppel Corporation,
raised their joint venture’s effective stake
in Cleantech Solar Asia Pte Ltd, the asset
company of Cleantech Renewable Assets
from 25.5% to 75.5%. It also completed the
acquisition of 800 Super, a joint transaction
with KI and KAIF’s first investment in
Singapore’s environment sector.
Infrastructure continues to be an exciting
space for Keppel, with decarbonisation
and sustainable urbanisation trends
accelerating demand for such essential
real assets.
Alternative Assets
Riding on the resilient and fast-growing
education sector in Asia Pacific, the
Keppel Education Asset Fund (KEAF)
completed the acquisition of a strategic
stake in a premium UK international school
in Singapore, further adding to its portfolio
of quality education assets. During the year,
KEAF also completed the retrofitting and
refurbishment of a vacant university campus
in Tokyo into a premium UK international
school. The asset has been handed over
to the tenant, and the long-term lease
commenced in October 2022. Looking
ahead, Keppel Capital is confident that the
demand for quality real estate for schools
and campuses will continue to be well
supported by macrotrends including rapid
urbanisation, an expanding middle class
and rising affluence, as well as a continued
focus on quality education.
Keppel-Pierfront Private Credit Fund,
which is managed by Keppel Capital’s
private credit platform Pierfront Capital,
announced a final close of approximately
US$700 million in investable capital,
including co-investment commitments.
The fund will provide loans to companies
with defensive infrastructure-like business
models and attractive risk-adjusted
returns, spanning asset classes such as
transportation, renewable energy and
core infrastructure.
KIT collaborated with KAIF and KI to jointly acquire EMK, a leading integrated waste management services player in
South Korea.
Annual Report 2022
55
Performance Review
Operating & Market Review
Energy &
Environment
We provide energy and environmental
solutions that are essential for
sustainable development.
Earnings Highlights ($ million)
Revenue1
EBITDA1
Operating Profit/(Loss)1
Profit/(Loss) before Tax1
Net Profit/(Loss) from continuing operations
Net Profit/(Loss) from discontinued operations
1 Numbers are for continuing operations.
2022
4,230
119
86
215
172
88
2021
3,560
(261)
(291)
(193)
(189)
(225)
Progress in 2022
Focus for 2023/2024
• OneInfra team will continue asset-light
strategy and leverage third-party funds to
pursue opportunities in power & renewables,
new energy, and environmental solutions.
• Strengthen bundled rooftop solar, cooling,
energy storage and electric vehicle charging
through Energy-as-a-Service offerings.
• Continue to grow renewable energy portfolio
to achieve 7 GW target by 2030.
• Expand environment solutions with value-
added enhancements that improve circularity
and reduce carbon intensity.
• Announced around $2.6 billion of joint
investments in solar, wind, energy and
environmental assets and platforms with
private funds and business trust managed
by Keppel Capital.
• Opened intelligent Operations Nerve Centre,
co-located in Keppel Infrastructure @ Changi,
Singapore’s first Green Mark Platinum Positive
Energy building under the new and more
stringent Green Mark scheme.
• Commenced import of hydroelectric renewable
energy into Singapore via the Lao PDR-Thailand-
Malaysia-Singapore Power Integration Project.
• Developing Singapore’s first hydrogen-ready
advanced combined cycle power plant.
• Signed MOUs to explore several initiatives
spanning carbon capture at WTE plants, R&D
for hybrid floating renewable energy systems,
and green hydrogen and green ammonia value
chain with international partners.
• Keppel O&M secured charters for all available
KFELS B Class legacy rigs.
56
Keppel Corporation Limited
Keppel Corporation is expanding into the wind energy business, alongside Keppel Infrastructure Trust, through joint investments in offshore and onshore wind energy assets
in Europe.
The global energy crisis presents strong tailwinds for
the Group to leverage its deep capabilities and proven
track record to help its customers expedite their
energy transition.
The Energy & Environment segment
provides technology-based solutions and
services spanning power and renewables,
new energy, environment, as well as
offshore & marine (O&M). The segment
comprises Keppel Infrastructure,
Keppel Renewable Energy (which has
been integrated under Keppel Infrastructure
with effect from 1 March 2023) and
Keppel O&M (which was merged with
Sembcorp Marine on 28 February 2023).
Over the course of 2022 and up to early
2023, Keppel streamlined its business,
through the combination of Keppel O&M
and Sembcorp Marine, as well as
the resolution of its legacy rigs and
associated receivables.
The Russia-Ukraine war has pushed energy
security up the international agenda, with
governments actively seeking to reduce their
reliance on traditional energy sources and
secure alternative energy supplies. Coupled
with the higher energy prices and increasing
global focus on climate change, recent
developments have given new impetus to
the global shift to renewables and clean
energy. Supported by the net zero carbon
emission commitments of governments and
businesses, the current market landscape
presents strong tailwinds for the Group to
leverage its deep capabilities and proven
track record to help its customers expedite
their energy transition.
Harnessing its asset-light model, the
Group made around $2.6 billion worth of
energy & environment-related investments,
jointly undertaken by Keppel together with
the private funds and/or business trust
managed by Keppel Capital. These include
investments in offshore and onshore wind
energy assets across Europe, as well as
a solar energy platform in Asia. Reflecting
the Group’s continued integration efforts,
a One Infrastructure (OneInfra) team,
comprising senior members from
Keppel Infrastructure and Keppel Capital,
worked closely together to seize opportunities
in decarbonisation and environmental
solutions, investing in waste management
businesses in Singapore and South Korea.
With its expertise in the development
and operation of sustainable solutions as
well as asset management capabilities,
Keppel is well placed to leverage third-party
funds to pursue inorganic opportunities
such as acquiring assets, operating
platforms and technologies. Looking ahead,
the OneInfra team is actively exploring
opportunities in power & renewables, new
energy, and environmental solutions.
In line with Vision 2030, Keppel has
been strengthening its recurring income
sources from electricity sales, operations
and maintenance of essential infrastructure
and bolstering its Energy-as-a-Service (EaaS)
portfolio with offerings such as energy
optimisation and analytics, energy storage,
cooling and electric vehicle (EV) charging.
Such services offer customers tangible
and realisable pathways to carbon neutrality,
while also achieving cost savings for
customers. Together, these solutions
enable the Group to contribute towards
efforts in achieving the world’s energy
transition and decarbonisation ambitions.
Annual Report 2022
57
Performance Review
Operating & Market Review
Energy & Environment
Keppel MET Renewables, a joint venture between Keppel Infrastructure and Swiss-based MET Group, will pursue and invest in solar and onshore wind assets across Western Europe, starting
with an initial portfolio of 213 MW of solar projects in Italy.
Power & Renewables
During the year, Keppel grew its renewables
portfolio from 1.1 GW to 2.6 GW1, as it gains
ground on its 7 GW target by 2030.
expected to benefit from the growing
demand for renewable energy in
the region.
Keppel Infrastructure formed Keppel MET
Renewables, a joint venture with Swiss-based
MET Group, to pursue and invest in both
greenfield and brownfield solar and onshore
wind assets across Western Europe.
Keppel MET Renewables was seeded
with an initial portfolio of 213 MW of
solar projects in Italy, and has a target to
scale up to at least 1 GW of operating and
ready-to-build renewable energy projects.
As part of the 2.6 GW portfolio, Keppel
co-invested approximately $679 million in
onshore and offshore wind energy assets
across Germany, Norway, and Sweden,
alongside Keppel Infrastructure Trust.
The investments will provide Keppel
not only with stable recurring income,
but also a strong deal flow pipeline in
well-established markets in the Nordics
and the United Kingdom.
In Asia, Keppel, along with Keppel Asia
Infrastructure Fund (KAIF) and KAIF’s
co-investor, increased their stake in
Cleantech Solar Asia, the asset company
of a leading solar energy platform from
25.5% to 75.5%. With solar assets located
in India and ASEAN, the platform is
Keppel is also pioneering cross-border
power trade of renewable energy into
Singapore, with the commencement
of the nation’s first import of hydropower
under the Lao PDR-Thailand-Malaysia-
Singapore Power Integration Project.
As at end-2022, more than 180 GWh of
electricity had been successfully transmitted
into Singapore’s power grid. In addition,
Keppel Infrastructure is pursuing other
renewable energy opportunities and
cross-border interconnections with
Cambodia, Lao PDR and Indonesia.
Other opportunities are in the pipeline
for Keppel Infrastructure to scale up
its offerings in the renewable energy
sector. It was awarded a grant from the
Energy Market Authority and JTC Corporation
to pilot Singapore’s first membrane-based
nearshore floating solar photovoltaic
system, which is designed to harness solar
energy reliably amid rough sea conditions.
Keppel Infrastructure is also collaborating
with the National University of Singapore
and Nanyang Technological University to
develop a first-of-its-kind floating hybrid
renewable energy system to harness solar,
wind, and tidal energy for continuous
power generation.
1 On a gross basis, including projects under development.
58
Keppel Corporation Limited
Beyond renewables, the Group is at
the forefront of efforts to decarbonise
Singapore’s power generation sector.
Keppel Infrastructure is building the nation’s
first hydrogen-ready and most advanced
combined cycle gas turbine power plant.
When completed in 2026, the 600 MW
Keppel Sakra Cogen plant will be the most
energy-efficient power plant in Singapore,
capable of saving up to 220,000 tonnes
per year of CO2 emissions, as compared
to Singapore’s average operating
efficiency for equivalent power generated.
In line with Keppel’s asset-light business
model, the Keppel Sakra Cogen Plant is
intended to be owned by Keppel Energy
and KAIF.
Keppel Infrastructure completed a high
efficiency (HE) upgrade for a generating unit
in Keppel Merlimau Cogen Plant, the first
HE upgrade in Southeast Asia. Following
the upgrade, the unit is delivering improved
efficiency and flexibility, while reducing its
fuel consumption, carbon footprint, and
environmental impact.
In 2022, Keppel Renewable Energy entered
into late-stage development for its flagship
500+ MW solar project in Queensland,
Australia. Keppel Renewable Energy has also
been collaborating with Keppel Data Centres
to explore the import of renewable energy
from Indonesia.
Since 1 March 2023, Keppel Renewable
Energy has been integrated under
Keppel Infrastructure to optimise synergies.
New Energy
Keppel Infrastructure positioned itself
to capture the demand for decarbonisation
in Singapore and around the region through
its sustainable EaaS offerings. In 2022, it
secured multi-year contracts with a total
value of over $250 million. Moving forward,
the EaaS business model is expected to add
to the sources of quality recurring income
for the Group.
The effectiveness of the sustainable
EaaS concept is demonstrated in the
retrofitted Keppel Infrastructure @ Changi,
which showcases Keppel’s ability to
blend innovation and sustainability into
a value-added energy service. Keppel
Infrastructure @ Changi houses Keppel
Infrastructure’s intelligent operations nerve
centre, which harnesses smart technologies,
such as artificial intelligence and IoT to
streamline processes, improve productivity,
and enhance the reliability of Keppel’s
assets and operations.
The building is expected to yield about
600,000 kWh/year of renewable energy,
more than double of the building’s
consumption, earning it the highest
accolade of Green Mark Platinum
Positive Energy by the Building and
Construction Authority.
Keppel Infrastructure continued to expand
its energy-efficient district cooling services.
The construction of the district cooling
systems in Bulim Phase 1 of the Jurong
Innovation District in Singapore and in the
Sam Yan commercial area in Bangkok are
progressing well.
The Group leveraged its asset-light model to invest
about $2.6 billion in energy & environment-related assets
and platforms in 2022, alongside the private funds
and/or business trust managed by Keppel Capital.
Mr Koichi Watanabe, CEO of Jurong Engineering; Ms Cindy Lim, CEO of Keppel Infrastructure; Mr Loh Chin Hua, CEO of Keppel Corporation; Dr Tan See Leng, Minister for Manpower & Second
Minister for Trade and Industry; Mr Ngiam Shih Chun, Chief Executive of Energy Market Authority; and Mr Osamu Ono, CEO of Mistubishi Power Asia Pacific were present at the signing of the
engineering, procurement and construction contract for the construction of the Keppel Sakra Cogen Plant.
Annual Report 2022
59
Performance Review
Operating & Market Review
Energy & Environment
Gearing up for the low-carbon economy,
Keppel Infrastructure explored partnerships
in the low-carbon ammonia/hydrogen,
carbon capture utilisation and sequestration
(CCUS) and decarbonisation spaces.
It signed a Memorandum of Understanding
with Greenko, one of India’s leading
renewable energy companies, to explore
green ammonia and renewable opportunities
to meet the growing demand for low-carbon
energy in India, Singapore and globally.
It also entered into a joint study with
Pertamina Power Indonesia and Chevron
New Energies to explore the development
of selected green hydrogen and green
ammonia projects using geothermal energy
located primarily in Sumatera, Indonesia.
During the year, Keppel Infrastructure
formed a consortium with Air Liquide,
Chevron and PetroChina to advance the
development of large-scale CCUS solutions
and integrated infrastructure in Singapore.
Environment
In 2022, the OneInfra team leveraged
third-party capital for the acquisition of
South Korean waste management company,
Eco Management Korea, and Singaporean
environmental services company, 800 Super.
The transactions complement and broaden
the range of environmental services that
In line with Keppel’s Vision 2030,
Keppel Infrastructure has been
strengthening its recurring income
sources from electricity sales,
operations and maintenance
of essential infrastructure and
bolstering its EaaS portfolio.
Keppel Infrastructure offers, and create
opportunities to synergise operations.
Notwithstanding the impact of the COVID-19
pandemic on construction and development,
Keppel Infrastructure forged ahead with the
construction of the Hong Kong Integrated
Waste Management Facility and Tuas Nexus
Integrated Waste Management Facility,
achieving good progress in 2022. In Australia,
Keppel Seghers is supporting the client
in the final commissioning works of the
Kwinana Waste-to-Energy (WTE) project,
Australia’s first thermal WTE facility.
Carbon capture for WTE is a key target on
Keppel’s decarbonisation roadmap, as it
spearheads the decarbonisation of Singapore’s
waste infrastructure through a joint study
with the National Environment Agency on
the feasibility of carbon capture for selected
WTE plants in Singapore as well as the
potential development of a pilot carbon capture
facility integrated with these plants. In Europe,
Keppel Seghers is an active member of the
European Supplier of Waste-to-Energy and
the chair of its CCUS taskforce.
In line with the Group’s plans to advance the
circular economy, Keppel Seghers, together
with its partners, is exploring the treatment
and use of Incineration Bottom Ash (IBA) as
an alternative construction material for WTE
plants. In Qatar, plans for plastic recycling
and use of IBA are already underway to
improve the circularity of the Domestic Solid
Waste Management Center (DSWMC). This
will reduce the volume of IBA going to the
landfill, thus improving the circularity of
waste streams and prolonging the lifespans
of existing landfills.
During the 2022 FIFA World Cup, Keppel
Seghers supported the Government of
Qatar in managing the higher volumes of
waste through treatment at the DSWMC.
Leveraging its strong track record in Qatar,
Keppel Seghers will continue to widen its
presence in the Gulf Cooperation Council
countries, many of which have embarked
on WTE projects as a means of diverting
waste from conventional landfills.
At the same time, there continues to be strong
demand for energy-efficient WTE plants in other
regions where Keppel Seghers is present.
Europe is facing the need to replace ageing
WTE plants with more energy-efficient
technology, in order to maximise energy
recovery from waste. Meanwhile, in
Southeast Asia, where most waste is still
being landfilled, there has been burgeoning
demand to explore WTE as a sustainable
waste management alternative. Keppel Seghers,
with its broad international experience and
strong execution track records, is well poised
to meet the growing interest from governments.
Keppel continues to expand its customer base for EaaS offerings, such as district cooling, solar panels and EV chargers.
60
Keppel Corporation Limited
Carbon capture for WTE is a key target in Keppel’s decarbonisation roadmap. (In picture: Keppel Seghers’ Beijing Fangshan District Circular Economy Industrial Park.)
Offshore & Marine
In 2022, amid improving conditions in the
offshore and marine sector, Keppel O&M
secured about $8.1 billion of new orders,
bringing its net orderbook to $11.0 billion,
the highest level since 2007. This includes
two floating production storage and
offloading units for Petrobras.
During the year, Keppel O&M continued to
strengthen its foothold across the value
chain of offshore renewables. Keppel O&M
completed a wind turbine installation
vessel crane upgrade project and secured a
contract to build its sixth offshore substation.
Its first two offshore wind substations for
Ørsted, which were for the Greater Changhua
1 & 2a wind farms in Taiwan, have
successfully generated their first power.
In specialised shipbuilding, Keppel O&M
achieved several industry ‘firsts’ with the
successful completion of its maiden
autonomous vessel project. Capable of
autonomous vessel navigation as well as
collision detection and avoidance, the
Maju 510 tug, owned and operated by
Keppel Smit Towage, is the first vessel in
the world to receive the Autonomous and
Remote-Control Navigation Notations from
ABS classification society. Keppel O&M
also delivered to Dutch maritime company
Van Oord the Vox Ariane and Vox Apolonia,
high-specification dual-fuel dredgers
with several features that reduce fuel
consumption and carbon emissions,
including the ability to run on liquefied
natural gas.
The offshore drilling market has seen
continued fixture activity, predominantly
in the Middle East, resulting in a steady
upward trajectory of utilisation and day
rates for jackup rigs. As at end-2022, all
of Keppel O&M’s available KFELS B Class
legacy jackup rigs had secured bareboat
charters. It successfully bareboat-chartered
four of its legacy B Class rigs and redeployed
another two B Class rigs to drilling contractors
in the Middle East, securing stable recurring
charter income over the next three to five years.
With effect from 28 February 2023, Keppel O&M
has been merged with Sembcorp Marine
to create a premier global player offering
solutions in offshore renewables, new
energy and cleaner solutions in the O&M
sector. Keppel’s legacy rig assets and
associated receivables have also been
transferred to Asset Co, the majority of
which is owned by external investors.
Amidst the improving offshore rig market,
Keppel is hopeful that the monetisation
of the legacy rigs can take place sooner,
leading to earlier repayment of the vendor
notes issued by Asset Co. Keppel has
received $4.25 billion in vendor notes,
which come with a coupon rate of 4% that
translates into approximately $170 million
of interest income per annum.
Annual Report 2022
61
Performance Review
Operating & Market Review
Urban
Development
We provide sustainable and innovative
urban space solutions, with a growing
focus on sustainable urban renewal
and senior living.
Earnings Highlights ($ million)
Revenue
EBITDA
Operating Profit
Profit before Tax
Net Profit
2022
904
319
288
418
282
2021
1,629
1,036
993
1,072
763
Progress in 2022
Focus for 2023/2024
• Established OneRE team, comprising
Keppel Land and Keppel Capital, focused on
sustainable urban renewal (SUR) investments.
• Acquired Samhwan Building in partnership
with private funds managed by Keppel Capital,
expanding Keppel Land’s SUR footprint into
South Korea.
• Accelerate asset monetisation and unlock
capital that can be reinvested for growth
and higher returns, leveraging the Group’s
asset-light model.
• Keep developing operating capabilities and
seek opportunities in the new growth engines
of SUR and senior living.
• Monetised two assets in China with total
• Invest strategically and selectively in new
proceeds of about $347 million.
• Entered China’s senior living market with
the announced acquisition of a senior living
facility project in Nanjing.
• Announced acquisition of a stake in a
residential site in Shanghai alongside
co-investors through Keppel’s China Urban
Development Investment Programme.
• Re-entered Hanoi, alongside Keppel Vietnam
Fund and its co-investor, with the announced
acquisition of a 49% interest in three residential
land plots.
projects across Asia Pacific, the US, the UK
and Europe with a focus on providing
Real Estate-as-a-Service.
• Continue to develop innovative solutions to
redefine urban spaces in collaboration with
other Keppel business units.
• Continue to develop the Sino-Singapore
Tianjin Eco-City in China as a model for
sustainable urbanisation.
62
Keppel Corporation Limited
The joint investment of Samhwan Building (left) in Seoul by Keppel Land and Keppel Asia Macro Trends Fund IV and KB Bank Discretionary Fund managed by Keppel Capital is a prime
example of the Group’s ability to harness complementary strengths and tap third-party funds for growth.
As part of its pivot to an asset-light model, Keppel Land has
been reinvesting in new growth engines and shoring up
capabilities in sustainable urban renewal and senior living,
which will add further streams of recurring income.
The Urban Development segment
delivers innovative, multi-faceted urban
space solutions as well as end-to-end
master development of smart, sustainable
urban projects. It comprises Keppel Land,
Keppel Urban Solutions (which has
been integrated under Keppel Land
with effect from 1 January 2023),
and the Group’s associated company,
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
As the world transitions to living with
COVID-19, pandemic-driven changes
over the past three years continue to
have a lasting impact on the future of
work, fuelled by new technologies and
digitalisation. The design and practice
of work, which in turn shape the mix
of physical and digital workspaces
required to meet business outcomes,
are also evolving as organisations
respond to hybrid work trends
and the growing need for more
sustainable operations.
More companies are seeking offices that
offer flexible spaces, digital platforms or
shared amenities that also promote health
and wellness of employees. In addition,
companies are also increasingly looking
for sustainable features that not only
reduce the carbon footprint of the
buildings but also uplift the quality of
life of the occupiers.
Meanwhile, increasing life expectancy, rising
affluence, and cultural shifts continue to
drive the expansion of ageing populations
and deepen focus on well-being and healthy
ageing, boosting demand for senior living
facilities with community-based services.
Keppel Land has been positioning itself to
seize opportunities from these macrotrends,
with its pivot to be an asset-light provider
of innovative and sustainable urban space
solutions. To advance its transformation,
Keppel Land is strategically monetising
its assets, while reinvesting in new growth
engines and operating platforms in the
areas of sustainable urban renewal (SUR)
and senior living, which will add further
streams of recurring income.
In 2022, Keppel Land embarked on its
first dedicated senior living facility project
in Nanjing, China. To be fitted out and
operated by Keppel Land, the facility is
expected to open in 2H 2023. Located in
Nanjing’s Qixia district and with a capacity
of around 400 residents, it will be a premier
assisted living community with care
capabilities. Designed as a low-carbon
and environmentally friendly project,
the Nanjing assisted living community
project will serve as a launchpad for
Keppel’s expansion into other senior
living markets in China and beyond.
During the year, Keppel Land expanded
into South Korea with the acquisition of
Samhwan Building in Seoul jointly with
private funds managed by Keppel Capital,
where it will apply its SUR capabilities
to retrofit, future-proof and extend the
lifespan of the office building. Keppel Land
will deploy its in-house design capability
to map out customer or tenant journeys,
before formulating suitable configurations
or services that value-add to their
experiences. It will also harness digital
technologies and the IoT to develop
Annual Report 2022
63
Performance Review
Operating & Market Review
Urban Development
smart platforms that can both enhance user
experience as well as greatly reduce the
asset’s carbon footprint.
Keppel Land is committed to redefining
urban spaces for a sustainable future. For
the existing assets that it manages, such
as Keppel Bay Tower, the first commercial
building in Singapore to be certified as a
Green Mark Platinum (Zero Energy) building,
Keppel Land deploys continual improvement
principles, regularly upgrading building
performance and offering services that
promote occupier wellness. In all its
operating markets, Keppel Land pursues
the top two tiers of green building ratings.
For its firm commitment to raise the
sustainability performance of its assets,
Keppel Land received several prestigious
sustainability accolades in 2022. These
include the Singapore Green Building Council
– Building and Construction Authority (BCA)
Leadership in Sustainability Award, the
Overall Top Real Estate Developer Globally
by Euromoney, and the second position in Asia
in GRESB’s Diversified – Non-listed category.
Accelerating its shift towards an asset-light
model, Keppel Land works closely with
Keppel Capital to tap third-party funds to
invest in quality projects, while generating
fee-based income from asset development
and operation. Examples include the
abovementioned Samhwan Building in Seoul
and a 49% interest in three residential land
plots in Hanoi alongside private funds
managed by Keppel Capital. During the year,
Keppel Land also invested in a residential
site in Shanghai together with co-investors
through the China Urban Development
Investment Programme (CUDIP), under
which Keppel Land and Keppel Capital
serve respectively as overall development
manager and investment manager.
The CUDIP aims to invest in residential
developments in Tier 1 and Tier 2 gateway
cities in China alongside co-investors.
Advancing the Group’s ambition as one
integrated business, Keppel Land and
Keppel Capital established the One Real
Estate (OneRE) team, which harnesses
Keppel’s complementary strengths across
real estate solutions and asset management
to source for deals and undertake SUR
projects. Through such efforts, Keppel Land
will focus on delivering on-the-ground
development or operational capabilities,
while Keppel Capital acts as a financial
twin, prospecting new investors and
raising funds, thus allowing the Group
to scale up quickly in its key markets in
an asset-light manner.
In Singapore, cooling measures announced
in September 2022 and rising interest rates
have placed pressure on sentiments in the
residential market. Keppel Land sold about
30 residential units in 2022, lower year-on-
year partly due to a lack of new launches
and reduced inventory. In the office space,
while demand is expected to moderate
given the ongoing consolidation in the
technology sector, rents are expected
to be boosted by the limited new office
pipeline. Expected to be completed
towards the end of 2024, the Keppel Towers
redevelopment will incorporate features,
technology and services that meet
the highest standards in sustainability,
connectivity, wellness and flexible working.
In the retail space, following major asset
enhancement works, Keppel Land officially
opened i12 Katong, a living laboratory
for novel retail concepts and a ‘phygital’
environment. The retail mall is on track to
obtain the BCA Green Mark Platinum award
and had an occupancy rate of above 95% at
end-2022.
Keppel Land deploys its in-house design capability to formulate
suitable configurations or services and harnesses digital
technologies to develop smart platforms that can enhance user
experience as well as reduce an asset’s carbon footprint.
Keppel Land has built a strong and diverse track record in Vietnam, winning several industry-leading awards and drawing good buyer demand for its
developments. (In picture: Celesta Avenue in Ho Chi Minh City, was named the Best Housing Development at PropertyGuru Vietnam Property Awards.)
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Keppel Corporation Limited
In China, the real estate market faced
considerable headwinds in 2022, as market
sentiments were impacted by the economic
slowdown and the COVID-19-related
restrictions. Despite the challenging
environment, Keppel Land monetised two
projects in Shanghai, with total proceeds
of about $347 million. Keppel Land also
sold about 1,080 homes in China.
As China’s real estate sector moves away
from a debt-driven growth model, Keppel
is well placed to work with local developers
by leveraging its capabilities in deal sourcing
and fund-raising to invest in attractive sites.
Following the relaxation of China’s zero-COVID
policy and the introduction of policies that
support the real estate sector, the market
has started to show signs of improvement
since the end of 2022. Meanwhile, the
demand for quality homes in well-located
areas is expected to be resilient over the mid
to long term, underpinned by urbanisation
trends and growing affluence.
In Vietnam, the economy grew 8.0% in 2022,
the highest increase in the last decade,
backed by strong domestic retail sales
and exports. In the real estate sector, while
demand remained healthy, challenging
approval processes limited the number
of new launches in the country. In 2022,
Keppel Land sold about 70 homes in
Vietnam, noticeably lower compared
to 2021. However, reflecting the strong
market demand, the first batch of units
launched at Keppel Land’s Celesta Avenue
in Ho Chi Minh City was fully sold within
a month.
During the year, Keppel Land was awarded
12 prestigious awards from PropertyGuru
Vietnam for developing some of the
country’s finest and most sustainable
mixed-use and residential developments.
Together with Keppel Urban Solutions,
Keppel Land continued to develop a smart
and sustainable planning roadmap for
Saigon Sports City, which is expected
to be a model integrated smart and
sustainable development. Keppel Urban
Solutions is also targeting similar large-scale
development projects in other markets.
Since 1 January 2023, Keppel Urban
Solutions has been integrated under
Keppel Land to streamline the Group’s
business and optimise synergies.
In India, the net absorption in office markets
is on track to return to its 5-year average
of the pre-pandemic era, as the country is
expected to become an attractive spot for
global shared-services firms to expand
operations. During the year, Keppel Land
completed the acquisition of the remaining
49% stake in a Grade A commercial
office project in Bangalore. It sold about
730 homes across two projects in
Bangalore and Mumbai.
In Indonesia, strong demand for quality
landed homes around Jakarta continued
to boost sales despite the pandemic.
Keppel Land sold about 280 units, primarily
from a new launch of the Wisteria project
in East Jakarta. Meanwhile, Chillax,
a lifestyle and placemaking commercial
hub situated on the former International
Financial Centre Tower 1 site, was
successfully launched in November 2022.
Sino-Singapore Tianjin Eco-City
Keppel leads the Singapore consortium,
which works with its Chinese partner to
guide the 50-50 joint venture, SSTEC, in its
role as master developer of the Eco-City.
In 2022, the Eco-City continued to grow as
a vibrant, smart and green city, attracting
residents to live, work and play in. Its
current population of 130,000 people1
and 20,000 registered companies1 are
well served by highly accessible quality
amenities, as well as the two newly opened
large-scale commercial complexes and an
outdoor sports and activities hub. In 2022,
more than 3,300 homes were sold in the
Eco-City, including more than 300 homes
from projects developed by SSTEC.
In 2022, Keppel’s various business units
enhanced their sustainability-related
offerings in the Eco-City. Keppel Land
secured the Tianjin Climate Exchange
Carbon Neutrality certification for the retail
mall of Seasons City, its first commercial
development in the Eco-City. Keppel Land
is also developing a carbon-neutral smart
precinct in the Eco-City’s Northern District
that is aligned with China’s ‘dual carbon’ goals.
Keppel Infrastructure successfully developed
its first rooftop solar photovoltaic system at
the Landmark Building, supplying clean energy
to the tenants. Its second rooftop solar
photovoltaic system is currently under
development at one of the ready-built
factories in the Eco-Innovation Park.
To cater to the population growth, the
Sino-Singapore Tianjin Eco-City Water
Reclamation Centre, a joint venture between
Keppel Infrastructure and Tianjin Eco-City
Investment and Development Co. Ltd,
commenced phase 2 of its development,
offering an additional water treatment
capacity of 70,000 tonnes per day.
1
Includes the Central Fishing Port and Tourism District.
Keppel Land’s Total Asset Distribution
By Country (%)
as at 31 December 2022
Singapore
China
Vietnam
Indonesia
Others
Total
37.0
40.0
12.4
5.5
5.1
$12.3 billion
100.0
Keppel Land’s Total Asset Distribution
by Segment (%)
as at 31 December 2022
Property Trading
Property Investments
Others
Total
33.9
61.4
4.7
$12.3 billion
100.0
Annual Report 2022
65
Performance Review
Operating & Market Review
Connectivity
We connect people and businesses
in the digital economy.
Earnings Highlights ($ million)
Revenue
EBITDA
Operating Profit
Profit before Tax
Net Profit
2022
1,291
187
62
70
37
2021
1,260
288
86
86
64
Progress in 2022
Focus for 2023/2024
• Scaled up data centre business with new
• Continue to expand portfolio of quality data
acquisitions in China and the UK, expanding
Keppel’s portfolio to 32 data centres across
19 cities in Asia Pacific and Europe.
centre assets.
• Commence Bifrost Cable System’s cable
laying operations.
• Achieved ready-for-service status for initial
phases of five data centre projects across
Malaysia, Indonesia, China and Australia.
• Made good progress in manufacturing cables
• Continue to pursue innovative data centre
solutions, such as the Floating Data Centre
Module, hydrogen production and a low-carbon
energy hub.
for the Bifrost Cable System.
• M1 achieved more than 95% outdoor
coverage in its 5G standalone network
rollout in Singapore, and implemented
over 20 5G use cases.
• M1 continued expanding into regional markets,
with acquisition of Glocomp Systems in Malaysia.
• Divested logistics businesses in Southeast Asia
and Australia, including Urban Fox.
• M1 to work towards achieving nationwide
5G coverage and providing 5G standalone
offshore coverage for the Southern coast
of Singapore.
• M1 to continue to accelerate 5G-enabled
platforms or initiatives to support digital
transformation of enterprise customers,
deliver an integrated digital offering to
consumer customers, and expand its cloud
and enterprise business regionally.
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Keppel Corporation Limited
Keppel Data Centres is exploring artificial intelligence and machine learning technologies in daily operations and management, leveraging advanced sensor networks and big data analyses to
perform predictive maintenance of its data centre infrastructure.
Keppel is uniquely positioned to provide integrated
end-to-end data centre solutions, from the provision of
clean energy to the development and operation of green
data centres, to the raising of funds, to the monetisation
of stabilised assets through Keppel DC REIT.
its enterprise solutions and developing
smarter, future-ready solutions and
more 5G use cases across sectors.
M1 also continued expanding its
regional footprint with the acquisition of
Malaysia-based digital solutions provider
Glocomp Systems.
such as Web 3.0, metaverse, and
blockchain, are driving significant
demand for data and digital connectivity.
Bandwidth demand is projected to increase
significantly for the foreseeable future,
propelling the growth of the global data
centre market.
The Connectivity segment comprises Keppel
Telecommunications & Transportation
(Keppel T&T) and M1, whose business
activities span data centres, subsea cable
systems as well as telecommunications.
In 2022, both Keppel T&T and M1 focused
on transforming their businesses and
sharpening their value propositions to better
capture growing opportunities in digital
connectivity. In line with Keppel’s Vision
2030, Keppel T&T streamlined and focused
its business by divesting Keppel Logistics1
and monetising its non-core operations,
including divesting Asia Airfreight Terminal
Company and Radiance Communications.
Keppel T&T continued to deliver high-quality
and operationally reliable data centre
infrastructure, while exploring ways to
substantially reduce its carbon footprint.
Data Centres
In an increasingly digitalised world, data
centres are playing increasingly important
roles in the digital ecosystem. Even as the
world makes a return to post-COVID-19
normalcy, businesses and consumers
continue to embrace hybrid work practices
and the use of conferencing platforms,
and push towards further digitalisation,
deepening reliance on data-hungry
technologies, such as cloud computing,
artificial intelligence and IoT.
Meanwhile, M1 advanced its transformation
from a traditional telco to a cloud native
connectivity platform. It is building up
In addition, the scaling up of disruptive,
data-generating technologies,
1
Includes Keppel Logistics’ businesses in Singapore, Malaysia, Vietnam and Australia, as well as UrbanFox.
Keppel is uniquely positioned to provide
integrated end-to-end data centre solutions,
from the provision of clean energy to the
development and operation of high-quality
green data centres, to the raising of funds
to invest in greenfield developments, to the
monetisation of stabilised assets through
Keppel DC REIT.
In 2022, the One Data Centre team,
comprising Keppel Data Centres and the
private funds and Keppel DC REIT managed
by Keppel Capital, worked closely together
to seek new development and acquisition
opportunities in Asia Pacific and Europe.
Annual Report 2022
67
Performance Review
Operating & Market Review
Connectivity
Keppel Capital raised US$1.1 billion for
Keppel Data Centre Fund II (KDCF II), and
is tapping Keppel Data Centres’ expertise
in developing, operating and maintaining
quality data centres to capture investment
opportunities in greenfield and brownfield
data centre assets. In 2022, KDCF II
acquired a majority stake in Huailai Data
Centre in Greater Beijing, China for which
Keppel Data Centres will implement global
best practices for data centre operations.
During the year, KDC REIT acquired a data
centre in London, the United Kingdom and
two data centres in Guangdong, China. With
these acquisitions, Keppel has expanded its
portfolio to 32 data centres across 19 cities
in Asia Pacific and Europe.
Keppel T&T is focused on scaling up
Keppel’s data centre businesses, by
developing and managing data centres
in a smart, green and connected manner.
Amid rising concerns over climate change,
carbon footprint and energy security,
Keppel Data Centres continues to prioritise
sustainability as a key guiding principle,
integrating sustainable design and
energy-efficiency technologies to
reduce the carbon footprint and water
consumption of its assets. As a testament
to Keppel Data Centres’ commitment
to environmental sustainability, Keppel
Data Centre Singapore 7 (KDC SGP 7)
M1 has achieved more than 95% outdoor
coverage in its 5G SA network rollout in
Singapore and has implemented more
than 20 5G use cases or applications.
in Genting Lane was awarded the Building
and Construction Authority (BCA) Green
Mark Platinum Award, the highest green
accolade conferred by BCA specifically
for new data centre developments.
also working with other partners to study
the feasibility of establishing a long-term,
stable supply chain of sustainable liquid
hydrogen from Western Australia and gaseous
hydrogen from Indonesia to Singapore.
To enhance its sustainability efforts,
Keppel Data Centres is also pursuing
innovative ideas with industry partners.
Together with industry partners, it is
studying the feasibility of developing
a low-carbon energy hub and microgrid
system, with inputs from various
sustainable energy sources, including
imported renewable power and hydrogen.
The companies will also explore the
project’s scalability and exportability
to other sites and overseas markets.
During the year, Keppel Data Centres
further enhanced its capabilities and
service offerings to effectively support the
dynamic business needs of its customers.
To improve the operational reliability of
its assets, Keppel Data Centres is exploring
artificial intelligence and machine learning
technologies in daily operations and
management, leveraging advanced
sensor networks and big data analysis
to perform predictive maintenance of
its data centre infrastructure.
In addition, Keppel Data Centres is also
making progress on its Floating Data Centre
Module. It has received approval from the
regulatory authorities to proceed and is in
leasing negotiations with the site owner for
project deployment. Keppel Data Centres is
Together with AsiaPac Technology
(AsiaPac), a wholly-owned subsidiary
of M1, Keppel Data Centres is introducing
intra-Asia interconnectivity across its
data centres, by delivering turnkey cloud
implementation solutions to its clients.
KDC SGP 7 in Genting Lane has achieved the BCA Green Mark Platinum Award, based on the Green Mark for New Data Centres. This is the highest green accolade conferred by Singapore’s
BCA specifically for new data centre developments. The data centre incorporates green features such as energy-efficient equipment and advanced technologies to improve performance of
the chiller plant and data hall cooling systems, as well as reduce water consumption.
68
Keppel Corporation Limited
The collaboration enables clients to easily
transform their existing infrastructure to
take full advantage of a secure hybrid
multi-cloud framework. By packaging
Keppel’s world-class data centre colocation,
stronger intra-Asia connectivity, and hybrid
multi-cloud services into an integrated,
synergistic offering, Keppel Data Centres
is able to deliver a holistic and seamless
digital transformation offering to its clients.
Subsea Cable Systems
The intra-Asia interconnectivity across
Keppel’s data centres will be enhanced by
Keppel’s Bifrost Cable System (Bifrost), a
multiple fibre pair, high-capacity submarine
cable system that Keppel T&T is developing
with other partners, connecting Singapore
directly to the west coast of North America.
During the year, Keppel T&T made good
progress on the Bifrost project, signing
definitive agreements with several
customers and receiving enquiries from
potential customers in India and ASEAN.
Keppel T&T is commencing cable laying
operations in early 2023, and is targeting to
achieve ready-for-service status in 2H 2024.
When fully commissioned, Bifrost will
be the single largest high-speed capacity-
bearing subsea optical cable across the
Pacific Ocean, and will help to address
the demand-supply gap arising from the
retirement of a large number of cable
systems in the next decade, as well as
the rapid growth in internet traffic related
to social and messaging platforms and
services from over-the-top operators.
Digital Connectivity
Today, customers look for more than just
convenience and accessibility of connectivity.
They seek lower latency, higher speeds,
as well as novel virtual or augmented
reality experiences, which will further boost
demand for 5G. M1 is meeting the needs of
today’s customers with the ongoing digital
transformation of its products and services,
particularly the development of its 5G
network. By end-2022, M1 has achieved
more than 95% outdoor coverage in its 5G
standalone (SA) network rollout in Singapore,
and has implemented more than 20 5G use
cases or applications for the consumer,
enterprise and government sectors,
as well as across the Keppel ecosystem.
Working in partnership with M1, Keppel
Offshore & Marine was the first in Southeast
Asia’s maritime industry to implement an
immersive 5G Augmented and Virtual Reality
Smart Glasses solution at its yard, optimising
the efficiency of remote operations.
Harnessing 5G’s high-speed and
low-latency connectivity, M1 is collaborating
with Gardens by the Bay and Electronic
Sports to provide immersive metaverse
M1 is collaborating with Gardens by the Bay and Electronic Sports to provide fast-speed 5G connectivity and immersive
metaverse experiences that complement Gardens by the Bay’s physical offerings.
experiences in Gardens by the Bay’s indoor
venues, delivering rich content in the form
of extended reality and gamification to visitors
on the go. M1 is also adding new layers
of interactivity and immersiveness in
Singapore’s museums, as it collaborates
with its subsidiary AsiaPac and Keppel
Data Centres, to provide 5G SA connectivity
and edge computing solutions to the
National Museum of Singapore and
Children’s Museum Singapore.
In the world’s first public and largest maritime
testbed at sea, M1 collaborated with the
Maritime and Port Authority of Singapore
and the Infocomm Media Development
Authority (IMDA) to provide a 5G SA network
to trial, develop and deploy new maritime
5G use cases. As a result of a separate trial
with IMDA and Airbus, M1 co-developed the
world’s first aeronautical and maritime 5G
SA modem, which is on par with military-
grade modems and is commercially ready.
M1 is also expanding its cloud and
enterprise solutions and capturing new
profit pools. Its enterprise business has
been growing steadily, making up about 33%
of M1’s revenue in 2022, up from 20% in
2020. In 2022, M1 also acquired digital
solutions provider Glocomp Systems.
As M1 broadens its enterprise offerings,
it continues to strengthen its consumer
business in line with its digital
transformation into a cloud native
connectivity platform. To cater to
changing customer needs and expectations,
M1 is offering hyper-personalisation
services and migrating customers to
its new cloud native digital platform.
The integration of M1’s digital services
will allow customers to enjoy its new
5G plans, and cloud services such as
cloud gaming. It will also improve
customer acquisition and lower M1’s
cost to serve.
In 2022, M1 expanded its customer base
to 2.5 million, up from 2.2 million in 2021.
It achieved the second-largest postpaid
customer base in Singapore at 1.9 million
customers. Its average revenue per user
has grown across its postpaid and fibre
broadband segments, and roaming
revenue has increased with the progressive
reopening of economies post pandemic.
Aligned with the Group’s sustainability
commitment and strategy, M1 continues
to implement various carbon emissions
reduction initiatives in its daily operations.
M1 will embark on the continuous overhaul
and upgrade of its equipment, software,
and building infrastructure, to achieve
better energy efficiency. In 2022, M1’s
science-based targets were validated by
the Science Based Targets initiative.
Annual Report 2022
69
Performance Review
70
Keppel Corporation Limited
Scenario Planning
We are building a future-ready company,
identifying risks and opportunities as
we execute Keppel’s Vision 2030 plans.
Planning for an Uncertain World
Amidst an uncertain global environment
characterised by heightened geopolitical
tensions, slowing economic growth,
financial volatility and increasingly frequent
extreme climate events, Keppel conducted
a scenario planning exercise in 3Q 2022
to test and enhance the resilience of
Keppel’s Vision 2030 strategy.
The scenario planning exercise, conducted
based on an established scenario planning
methodology, involved Keppel Corporation’s
senior management, as well as the
leadership teams in the different business
units. The scenarios as well as the strategic
responses to the scenarios were then
presented and discussed at Keppel
Corporation’s Board Strategy Offsite in
end-September 2022.
Three Alternative Scenarios
A set of three scenarios was developed
using an inductive methodology. At a broad
level, each scenario was defined in terms of
a range of outcomes in the 2030 timeframe
along three primary dimensions: (i) the
geopolitical and economic order; (ii) the
climate change response and energy
transition landscape; and (iii) the global
financial environment.
In terms of the geopolitical dimension,
the scenarios envisaged a range of plausible
international political configurations and
dynamics ranging from a deeply decoupled
and conflictual world, to a multipolar
environment characterised by greater
stability and more balanced global growth.
Beyond the ongoing conflict in Ukraine,
the scenarios also explored the possible
implications of an escalation in Cross-Strait
tensions. In terms of the global financial
environment dimension, the scenarios
depicted a range of alternative levels and
geographic patterns of economic growth,
as well as varying degrees of financial
system stability, in particular with respect
to monetary policy and its various
potential effects.
On climate change and the energy transition,
the scenarios considered a range of
potential global warming trajectories,
alternative speeds of the energy transition,
the nature of the global response to climate
change, as well as varying degrees and
forms of climate-related physical and
transition risks. One of the three scenarios
was based on the relatively benign 1.5°C
global warming trajectory, corresponding to
the range of potential temperature changes
by 2081-2100 in SSP1-2.61. To ensure
rigorous testing of the resilience of the
Group’s strategy and risk management,
the other two scenarios were built on 3.5°C
and 4.0°C global warming trajectories2,
which envisaged significantly higher climate
risks, and more frequent and extreme
climate-related events. In terms of the global
response to climate change, the scenarios
explored a range of possibilities, from
unified global mitigation efforts to disparate
adaptation-centred efforts.
While the full impacts of the scenarios,
especially those related to climate change,
may manifest themselves more clearly over
a longer period, this exercise was focused
on developing a set of plausible scenarios
IPCC AR6 WGII Technical Summary.
1
2 The global warming trajectories in these two scenarios are consistent with the SSP3-7.0 and SSP5-8.5
scenarios respectively.
Keppel is well placed to provide solutions to help its customers and stakeholders on their journeys to net zero.
that represent a range of future operating
conditions that Keppel may face over
the next 5-10 years, and which would
be particularly relevant to Keppel as
the Group executes its Vision 2030.
The scenarios did not assign probabilities
to specific future conditions, but rather
served to generate inputs to the Board
and management when considering
the Company’s strategy, while also
identifying risks and opportunities.
Responding to Uncertainty
Beyond specific responses to individual
scenarios, the Group also identified and
considered a range of ‘no regret’ actions that
would be likely to generate the greatest
expected strategic value across all three
scenarios, in order to strengthen the
future-readiness of the group strategy.
These robust actions included, for example,
raising the Group’s fund-raising capabilities,
anticipatory regulatory awareness, and
strengthening the Group’s networks of
investors across its targeted markets,
in line with Keppel’s Vision 2030 plans
to be a leading global asset manager
and operator. Through the review of
alternative plausible geopolitical scenarios,
the Group also discussed its long-term
human resource requirements and
the importance of strengthening talent
with relevant market knowledge in
different geographies.
On the climate change and energy
transition front, across all three scenarios,
it was envisaged that there would be
growing demand for renewables, clean
energy, decarbonisation solutions and
climate-resilient infrastructure – sectors
which Keppel already operates in and
which represent considerable growth
opportunities for the Group. The importance
of incorporating climate-related risk
assessment in future strategies was
emphasised across scenarios, whether
in terms of decarbonising the Group’s
operations, assessing specific acquisition
targets, or evaluating the commitment
and capacity of local governments to
address physical climate risks when making
long-term investment decisions. Importantly,
Keppel also discussed how the Group
could leverage its unique strengths and
track record to offer solutions to help
its customers and stakeholders on their
journeys to net zero.
Beyond the initial scenario analysis exercise,
a set of qualitative and quantitative signposts
was also identified to facilitate the monitoring
of future operating conditions, thus helping
the Company to take suitable anticipatory
actions and adjust its strategy in response
to the evolving landscape.
Annual Report 2022
71
Performance Review
72
Keppel Corporation Limited
Financial Review
We will sustain value creation
through execution excellence,
and strong financial discipline.
Group Overview
The Group achieved a net profit including
discontinued operations of $927 million
for 2022. All segments were profitable with
improved year-on-year (yoy) performance
from Energy & Environment and Asset
Management. In 2022, Asset Management
was the largest contributor with net profit
of $311 million, representing a third of the
Group’s earnings. Despite the headwinds
in some markets, our Urban Development
business continued to contribute significantly,
accounting for $282 million or 30% of
the Group’s profits. Reversing the net loss
in the prior year, Energy & Environment
contributed a net profit of $172 million,
or 19% of the Group’s bottom-line.
Connectivity and Corporate & Others
accounted for 8% of the Group’s profit.
Discontinued operations registered a
net profit of $88 million, compared to
FY 2021’s net loss of $225 million.
The performance including discontinued
operations translated to earnings per share
of 52.1 cents, as compared to 56.2 cents
in 2021. Correspondingly, Return On Equity
(including discontinued operations) (ROE)
was 8.1% as compared to 9.1% in 2021.
Free cash outflow was $408 million as
compared to the free cash inflow of
$1.76 billion in 2021. This was largely due
to lower divestment proceeds from asset
monetisation completed and higher
investments made during the year. During
the year, the Group invested in several
energy & environment and sustainable
urban renewal-related investments including
– Cleantech Renewable Assets, a solar
platform; Eco Management Korea Holdings
Co., Ltd, a South Korean waste management
company; and an office building in South
Korea for which the Group will undertake
asset enhancement and refurbishment work
Key Performance Indicators
Revenue1
Net profit
Earnings per share
Return on equity
Operating cash flow
Free cash flow
Total cash dividend per share
n.m.f. denotes no meaningful figure.
1 Revenue from continuing operations.
2022
$ million
6,620
927
52.1 cts
8.1%
260
(408)
33.0 cts
22 vs 21
% +/(-)
–
(9)
(7)
(11)
n.m.f.
n.m.f.
–
2021
$ million
6,611
1,023
56.2 cts
9.1%
(352)
1,756
33.0 cts
We achieved a net profit of $927 million for FY 2022,
with Asset Management as the largest contributor,
representing about a third of the Group’s earnings.
to enhance its performance and value. Net
gearing increased from 0.68 times a year ago
to 0.78 times at the end of 2022 due to a
higher net debt as well as a lower equity base.
Total cash dividend for FY 2022 will be
33.0 cents per share, the same as the total
dividend in FY 2021. This comprises a
proposed final cash dividend of 18.0 cents
per share as well as an interim cash dividend
of 15.0 cents per share paid in the third
quarter of 2022.
Multiple Income Streams
Recurring income increased $298 million
yoy to $560 million. This was underpinned
by higher earnings achieved by the power
& renewables business and M1, stronger
share of results from an associated
company in Europe under Keppel Infrastructure,
and higher contributions from the stakes
in the REITs and Trust that the Group owns.
Earnings from EPC/Development for
Sale were lower yoy mainly due to lower
contributions from trading projects in
China and lower gains from enbloc sales.
Multiple Income Streams ($ 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
Discontinued Operations
Total
2021
61
315
317
591
262
(298)
(225)
1,023
2022
(45)
58
282
152
560
(168)
88
927
Annual Report 2022
73
Performance Review
Financial Review
Our recurring income more than
doubled yoy to $560 million
in FY 2022.
Revenue1 ($ million)
5,600
4,800
4,000
3,200
2,400
1,600
800
0
Asset
Management
Energy &
Environment
Urban
Development
Connectivity
Corporate
& Others
2021
2022
162
195
3,560
4,230
1,629
904
1,260
1,291
–
–
1 Numbers are for continuing operations.
Net Profit/(Loss) ($ million)
1,000
800
600
400
200
0
-200
-400
Asset
Management
Energy &
Environment
Urban
Development
Connectivity
Corporate
& Others
Discontinued
Operations
These arose largely as a result of the
slowdown in the Chinese economy and
China’s zero-COVID policy, which affected
home sales, the completion and handover
of units, as well as asset monetisation.
However, the Chinese economy is expected
to recover in the coming months following
the relaxation of COVID restrictions. The
implementation of support policies targeted
at both property developers and homebuyers
should also help to bolster market sentiments.
Although lower yoy, the Group continued to
record healthy revaluation gains on investment
properties and data centres, as well as
fair value gains on investments in 2022.
Impairments in 2022 were much lower than
in the prior year when the Group recognised
provisions related to KrisEnergy exposure.
Segment Operations
Group revenue from continuing operations
of $6,620 million was at about the
same level as 2021. Asset Management
achieved a 20% or $33 million increase
in revenue to $195 million underpinned
by higher acquisition fees and management
fees resulting from increased acquisitions
completed. Revenue from Energy &
Environment increased by $670 million
or 19% to $4,230 million led by higher
electricity and gas sales, and higher
revenue recognition from Keppel Seghers’
projects abroad. Urban Development’s
revenue decreased by $725 million to
$904 million mainly due to lower revenue
from property trading projects in China
as a result of fewer units completed and
handed over during the year. Revenue from
Connectivity increased by $31 million to
$1,291 million mainly due to M1 reporting
higher mobile and enterprise revenue,
including contribution from the newly
acquired Glocomp Systems (M) Sdn Bhd,
partly offset by lower handset sales, and
lower revenue from the logistics business
following the divestment of the logistics
portfolio in Southeast Asia and Australia
in July 2022.
2021
2022
301
311
(189)
172
763
282
64
37
309
37
(225)
88
Group net profit from continuing operations
of $839 million was $409 million or 33%
lower than that in 2021.
Net profit from Asset Management increased
by $10 million to $311 million mainly due
to higher fair value gains on investment
properties recorded by Keppel REIT, and
higher fee income arising from acquisitions
completed. These were partly offset by
mark-to-market losses from investments, as
well as lower fair value gains on data centres
recorded by Keppel DC REIT and private funds.
Energy & Environment registered a net profit
of $172 million in 2022, reversing the net
74
Keppel Corporation Limited
loss of $189 million in 2021, which had
included an impairment of $318 million
relating to the Group’s exposures to KrisEnergy,
partially offset by share of Floatel’s net
restructuring gain of $215 million. For the
current year, the segment recorded higher
electricity and gas sales and contributions
from Keppel Seghers’ projects abroad,
higher share of results from an associated
company in Europe, and lower share of
losses from Floatel. These were partially
offset by the provision for supply chain
cost escalation in the environment business.
Net profit from Urban Development
decreased by $481 million to $282 million
mainly due to lower contributions from
property trading projects in China, lower fair
value gains from investment properties,
as well as lower gains from enbloc sales.
The segment completed the disposals of
Upview and Sheshan Riviera projects in
Shanghai in 2022, as compared to the
recognition of gains from the disposals of
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 in 2021.
Connectivity’s net profit of $37 million was
$27 million lower than that in 2021. This was
mainly due to the absence of gains from the
divestment of interests in Keppel Logistics
(Foshan) and Wuhu Sanshan Port Company
Limited in 2021, and lower fair value gains
on data centres, which was partly offset
by higher net profit from M1.
Net profit from Corporate & Others
decreased by $272 million to $37 million
mainly due to lower fair value gains on
investments and lower investment income.
In the prior year, the segment recorded
significant distribution income and fair
value gains from its investments in new
technology and start-ups, in particular,
Envision AESC Global Investment L.P..
The Group’s taxation decreased yoy
mainly due to lower taxable profit from
Urban Development. Taking into account
income tax expenses, non-controlling
interests and profit attributable to holders of
perpetual securities, the Group’s net profit
from continuing operations attributable to
shareholders for 2022 was $839 million.
All segments were profitable, including
Energy & Environment which had registered
a loss in 2021.
EBITDA1 ($ million)
1,250
1,000
750
500
250
0
-250
-500
2021
2022
Asset
Management
Energy &
Environment
Urban
Development
Connectivity
116
94
(261)
119
1,036
319
288
187
Corporate
& Others
241
53
Operating Profit/(Loss)1 ($ million)
1,000
800
600
400
200
0
-200
-400
2021
2022
Asset
Management
Energy &
Environment
Urban
Development
Connectivity
113
91
(291)
86
993
288
86
62
Corporate
& Others
228
38
Profit/(Loss) Before Tax1 ($ million)
1,250
1,000
750
500
250
0
-250
-500
Including discontinued operations,
the Group’s net profit attributable to
shareholders was $927 million, which
was $96 million lower yoy.
2021
2022
Asset
Management
Energy &
Environment
Urban
Development
Connectivity
327
340
(193)
215
1,072
418
86
70
Corporate
& Others
319
52
1 Numbers are for continuing operations.
Annual Report 2022
75
Performance Review
Financial Review
ROE & Dividend
%
15
10
5
0
-5
cents
45
30
15
0
-15
ROE (%)
Full Year Dividend (cts)
Interim Dividend (cts)
2017
2018
2019
6.91
22
8
8.4
30
152
6.3
20
8
2020
(4.6)
10
3
2021
2022
9.1
33
12
8.1
33
15
1 Excludes one-off financial penalty from global resolution & related costs.
2
Includes special cash dividend of 5.0 cents/share.
The discontinued operations recorded a
net profit of $88 million, as compared to the
net loss of $225 million in 2021. In addition
to revenue recognition from new projects
and higher progressive revenue recognition
on existing projects, the offshore & marine
business recorded higher investment
income, gains from the divestment of
certain assets and a partial write-back of
impairments on legacy rigs. These were
partly offset by the provisions made for cost
overruns on certain projects in Keppel’s
O&M’s yard in the US. The Group has also
ceased depreciation for the relevant assets
classified under the disposal group held
for sale.
Shareholder Returns
ROE was 8.1%, compared to 9.1% in the
previous year.
Taking into account the strong performance
of the Group, and to reward shareholders
for their confidence in the Company, the
Company will be distributing a total cash
dividend of 33.0 cents per share for 2022,
comprising a proposed final cash dividend
of 18.0 cents per share as well as the interim
cash dividend of 15.0 cents per share
distributed in the third quarter of 2022. On a
per share basis, it translates into a gross yield
of close to 7% on Keppel’s adjusted share
price of $4.731 as at 31 December 2022.
1 Adjustment relates to distribution in specie of Sembcorp Marine Ltd shares. Source: Bloomberg.
76
Keppel Corporation Limited
Financial Position
Following the announcement on 27 April
2022 and in accordance with SFRS(I) 5
Non-current Assets Held for Sale and
Discontinued Operations, the assets
and liabilities related to Keppel O&M,
excluding the out-of-scope assets, had
been presented in the balance sheet as
“Disposal group classified as held for sale”
and “Liabilities directly associated with
disposal group classified as held for sale”
as at 31 December 2022.
Group shareholders’ funds decreased
by $0.48 billion to $11.18 billion as at
31 December 2022. The decrease was
mainly attributable to share buyback
programme and foreign exchange translation
losses, payment of final dividend of 21.0 cents
per share in respect of financial year 2021,
and payment of interim dividend of 15.0 cents
per share in respect of the half year ended
30 June 2022, partly offset by retained
profits and increase in fair value on cash
flow hedges during the year.
Group total assets were $31.07 billion as at
31 December 2022, $1.26 billion lower than
Total Assets Owned ($ million)
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Fixed assets
Investment properties
Right-of-use assets
Associated companies, joint ventures & investments
Stocks
Contract assets
Debtors & others
Bank balances, deposits & cash
Disposal group and assets classified as held for sale
2021
2,044
4,256
529
7,525
4,604
3,269
5,951
3,617
528
2022
977
4,283
241
8,323
2,301
342
3,926
1,142
9,530
Total
32,323
31,065
We will be distributing a total cash dividend of 33.0 cents per share
for FY 2022, representing a gross yield of close to 7% on Keppel’s
adjusted share price of $4.73 as at 31 December 2022.
the previous year end. This was largely
attributable to decrease in bank balances,
deposits & cash, stocks and contract
assets, partly offset by increase in
investments in associated companies
and joint ventures.
Group total liabilities of $19.15 billion as
at 31 December 2022 were $0.73 billion
lower than the previous year end. This was
largely attributable to the net repayment of
term loans.
Management also took into consideration
climate-related issues and there was no
material impact on the Company’s financial
reporting in FY 2022.
Group net debt increased by $0.84 billion to
$9.24 billion as at 31 December 2022, driven
largely by dividend payments, share buybacks,
investments in associated companies and
joint ventures as well as additions of fixed
assets and investment properties. Total equity
decreased by $0.53 billion mainly due to
decrease in shareholders’ funds as explained
above. As a result, group net gearing ratio
increased from 68% at 31 December 2021
to 78% at 31 December 2022.
Total Liabilities Owed and Capital Invested ($ 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
Lease liabilities
Other liabilities
Liabilities directly associated with disposal group
and assets classified as held for sale
Total
2021
11,655
401
385
6,398
1,002
11,455
562
427
38
32,323
2022
11,178
401
334
3,970
210
10,181
199
368
4,224
31,065
Annual Report 2022
77
Performance Review
Financial Review
Total Shareholder Return (%)
50
40
30
20
10
0
-10
-20
-30
-40
-50
10-year annualised TSR as at 2022
0.1%
Keppel
3.9%
STI
Keppel
STI
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
2022
49.3
8.4
Total Shareholder Return
Our 2022 Total Shareholder Return (TSR)
of 49.3% was 40.9 percentage points above
the benchmark Straits Times Index’s (STI)
TSR of 8.4%. Our 10-year annualised
TSR growth rate was 0.1% as compared
to STI’s 3.9%.
Cash Flow
Net cash from operating activities was
$260 million for 2022. Net cash used in
investment activities was $668 million.
The Group spent $1,616 million on
investments and operational capital
expenditure and net advances to associated
companies, joint ventures and joint venture
partner of $211 million. After taking into
account the proceeds from divestments
Our 2022 Total Shareholder Return
of 49.3% was 40.9 percentage points
above the benchmark Straits Times
Index’s TSR of 8.4%.
and dividend income of $1,159 million,
the free cash outflow was $408 million.
The free cash outflow as compared to free
cash inflow in the prior year was mainly
due to lower divestment proceeds from
asset monetisation completed and higher
investments made during the year. Proceeds
from divestments completed during the
year included the divestment of Shanghai
Fengwo Apartment Management Co Ltd,
Shanghai Jinju Real Estate Development
Co Ltd and Keppel Logistics Pte. Ltd.,
all of which are part of the Group’s asset
monetisation programme. In 2022,
the Group invested in several energy &
environment and sustainable urban
renewal-related investments including –
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 and joint venture partner
Net cash from/(used in) investing activities
Free cash flow
Dividend paid to shareholders of the Company & subsidiaries
78
Keppel Corporation Limited
2022
$ million
22 vs 21
+/(-)
2021
$ million
727
(406)
321
87
418
(566)
260
(1,616)
1,159
(211)
(668)
(408)
(676)
(171)
164
(7)
(159)
927
(149)
612
(844)
(1,719)
(213)
(2,776)
(2,164)
(319)
898
(570)
328
246
(509)
(417)
(352)
(772)
2,878
2
2,108
1,756
(357)
We continued to strengthen our business resilience amidst
rising interest rates. As at end-2022, about 67% of the Group’s
borrowings were on fixed rates, with an average interest cost
of 3.24% and weighted tenor of about three years.
Cleantech Renewable Assets, a solar energy
platform; Eco Management Korea Holdings
Co., Ltd, an integrated waste management
services company; and 800 Super Holdings
Limited, an integrated environmental
solutions provider and capital expenditures.
Total distribution to shareholders of the
Company and non-controlling shareholders
of subsidiaries for the year amounted to
$676 million.
Borrowings1
The Group borrows from local and foreign
banks in the form of corporate loans and
project loans. The Group also taps the debt
capital market via issuance of primarily
Singapore dollar bonds. Total Group
borrowings excluding lease liabilities as
at the end of 2022 were $10.2 billion
(2021: $11.5 billion). At the end of 2022,
35% (2021: 41%) of Group borrowings were
repayable within one year with the balance
largely repayable more than two years later.
Unsecured borrowings constituted 93%
(2021: 94%) of total 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 $2.17 billion
(2021: $2.22 billion).
Fixed rate borrowings constituted 66%2
(2021: 70%) 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 cross currency swap and
interest rate swap agreements with notional
amount totalling $4,710 million whereby it
receives foreign currency fixed rates and
variable rates equal to AUD BBSY and USD
SOFR (in the case of the cross currency
swaps) and variable rates equal to SOR,
SORA and USD-LIBOR and USD SOFR
(in the case of interest rate swaps) and
pays fixed rates of between 0.06% and
3.62% on the notional amount.
Details of these derivative financial
instruments are disclosed in the notes
to the financial statements.
borrowings were drawn to hedge against
the Group’s overseas investments and
receivables that were denominated in
foreign currencies.
Singapore dollar borrowings represented
64% (2021: 64%) of total borrowings after
taking into account the effect of derivative
financial instruments. The balance was
mainly in US dollars. Foreign currency
The weighted average tenor of the
Group’s debt was about three years at
the end of 2022 and at the end of 2021,
with an increase in average cost of funds
as compared to end of 2021.
Secured/Unsecured Borrowings (%)
Fixed/Floating Borrowings (%)
Secured
Unsecured
Total
7
93
100
Fixed
Floating
Total
2
66
34
100
Borrowings by Currency (%)
Debt Maturity ($ million)
SGD
USD
Others
Total
64
29
7
100
> 5 Years
4-5 Years
3-4 Years
2-3 Years
1-2 Years
< 1 Year
Total
1,072
1,468
1,024
1,180
1,859
3,578
11%
14%
10%
12%
18%
35%
10,181
100%
1 Borrowings exclude lease liabilities.
2 Fixed rate borrowings exclude perpetual securities which have been accounted for as equity. Including perpetual securities, fixed rate borrowings would be 67%.
Annual Report 2022
79
Performance Review
Financial Review
Keppel’s strong financial capacity allows us to drive
transformation and pursue growth opportunities in line
with Vision 2030, as well as reward our shareholders.
Capital Structure & Financial Resources
The Group maintains a strong balance sheet
and an efficient capital structure to maximise
return for shareholders.
Net Cash/(Gearing)
Net Gearing = Borrowings + Lease Liabilities – Cash
Total Equity
Capital Structure
Total equity at end-2022 was $11.91 billion
as compared to $12.44 billion as at end-2021.
The Group was in a net debt (including lease
liabilities) position of $9,238 million as at
end-2022, which was above the $8,400 million
as at end-2021. The Group’s net gearing
ratio was 0.78 times as at end-2022,
compared to 0.68 times as at end-2021.
At the Annual General Meeting in 2021,
shareholders gave their approval for the
mandate to buy back shares. During the
year, 75,864,000 shares were bought back
and held as treasury shares. The Company
also transferred 8,209,410 treasury shares
to employees upon vesting of shares
released under the KCL Share Plans. As at
the end of the year, the Company had
68,597,849 treasury shares. Except for the
transfer, there was no other sale, transfer,
disposal, cancellation and/or use of treasury
shares during the year.
Financial Resources
The Group continues to be able to tap into
the debt capital market at competitive terms.
As part of its liquidity management, the
Group has built up adequate cash reserves
$ million
15,000
10,000
5,000
0
-5,000
-10,000
Net Debt
Total Equity
Net Gearing
No. of times
1.5
1.0
0.5
0
-0.5
-1.0
2021
(8,400)
12,441
(0.68)
2022
(9,238)
11,913
(0.78)
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 of short-term
money market borrowings, commercial
papers, bank loans as well as medium/long
term bonds via the debt capital market.
As at end-2022, total available credit
facilities, including cash at Corporate
Treasury and bank guarantee facilities,
amounted to $5.83 billion (2021: $8.08 billion).
Critical Accounting Judgments & Estimates
The Group’s significant accounting policies
are discussed in more detail in the notes to
the financial statements. The preparation of
financial statements requires management
to exercise its judgements in the process
of applying the accounting policies. It also
requires the use of accounting estimates
and assumptions which affect the reported
amounts of assets, liabilities, income and
expenses. Critical accounting judgments
and estimates are described in Note 2.28 to
the financial statements.
Financial Capacity
$ million
Remarks
Cash at Corporate Treasury
390 34% of total cash of $1.14 billion
Available credit facilities to the Group
5,438 Credit facilities of $9.34 billion, of which $3.90 billion was utilised
Total
5,828
80
Keppel Corporation Limited
Performance Review
Group Structure
Keppel Corporation Limited
Asset Management
Energy & Environment1
Urban Development
Connectivity
• Asset Management
• REITs & Business Trust
• Private Funds
• Power & Renewables
• Environment
• New Energy
• Urban Space Solutions
• End-to-End Master Development
• Data Centres
• Subsea Cable Systems
• Digital Connectivity
100%
Keppel Capital Holdings Pte Ltd
100%
Keppel Infrastructure
Holdings Pte Ltd
100%
Keppel Land Limited
100%
Keppel Telecommunications
& Transportation Ltd
47%
100%
100%
100%
Keppel REIT2,3
Keppel Renewable Energy Pte Ltd
Keppel Urban Solutions Pte Ltd
M1 Limited6
20%
Keppel DC REIT3,4
7%
Keppel Pacific Oak US REIT3
50%
Sino-Singapore Tianjin
Eco-City Investment and
Development Co., Ltd5
China
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 Excludes Keppel Offshore & Marine (Keppel O&M), as the combination of Keppel O&M and Sembcorp Marine Ltd was completed on 28 February 2023.
2 Owned by Keppel Land Limited (40%) and Keppel Capital Holdings Pte Ltd (7%).
3 Public listed company.
4 Owned by Keppel Telecommunications & Transportation Ltd (19.6%) and Keppel DC REIT Management Pte Ltd (0.6%).
5 Owned by a Singapore Consortium, which is in turn 90%-owned by the Keppel Group.
6 Owned by Keppel Konnect Pte Ltd (19%), and Konnectivity Pte Ltd (81%), which are in turn 100%-owned and 80%-owned by the Keppel Group respectively.
Updated as at 2 March 2023. 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 2022
81
Governance
Corporate Governance
The Board and management of Keppel
Corporation Limited (“KCL”, or the “Company”)
firmly believe that a genuine commitment to
good corporate governance is essential to 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 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 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 1 January 2022 in view of him
having served for more than 9 years
on the Board.
The Chairman, with the assistance of the
Company Secretaries, schedules meetings
and prepares meeting agenda to enable
the 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 good decisions. He also encourages
constructive relations between the Board
and management. 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 general meetings, the Chairman ensures
constructive dialogue between shareholders,
the Board and management. The Chairman
sets the right ethical and behavioural tone
and takes a leading role in the Company’s
drive to achieve and maintain a high standard
82
Keppel Corporation Limited
KCL’s governance structure is as follows:
Governance Framework 2022
Chairman
Board
Chief
Executive Officer
Investments &
Major Projects
Action Committee
Management
Executive Committee
Board Risk
Committee
Board Sustainability
and Safety Committee
Corporate
Functions
Group Regulatory
Compliance
Management
Committtee
Group Regulatory
Compliance
Working Team
Central Finance
Committee
Management
Committees
Technology
and Data Risk
Committee
Digital
Transformation
Steering Committee
Group
Sustainability
Working Committee
Internal
Audit
Audit
Committee
Nominating
Committee
Remuneration
Committee
Cyber Security
Steering Committee
Group Business
Continuity
Management
Steering Committee
Group Business
Continuity
Management Working
Committee
Transformation
Office
of corporate governance with the 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
1 November 2021 in view of Mr Teoh’s
re-designation as a non-executive and
non-independent Chairman. As Lead
Independent Director, Mr Vestring supports
the Chairman and the Board to ensure
effective corporate governance in managing
the affairs of the Company, provides
leadership in situations where the Chairman
is conflicted and facilitates communication
between the Board and shareholders or
other stakeholders of the Company as
necessary. He is also available to
shareholders and other stakeholders
of the Company where they have concerns
and for which their previous contact
through the normal channels of the
Chairman and management has
failed to resolve the matter or has
been inadequate or inappropriate.
He is also the chairman of the
Remuneration Committee and a
member of the Nominating Committee.
To assist the Board in the discharge
of its oversight function, various board
committees, namely the Audit, Board Risk,
Nominating, Remuneration, and Board
Sustainability and Safety Committees,
have been constituted with clear written
terms of reference. All the board committees
are actively engaged and play an important
role in ensuring good corporate governance
in the Company and within the Group, and
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 of the
respective committees are reviewed on
an annual basis, along with the board
committees’ structures and membership,
to 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 agreed strategy, manages and develops
the Group’s businesses and implements
the 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, 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 Executive Committee
(“MexCo”), which brings together the
CEO and CFO of the Company, business
unit (“BU”) CEOs, and select members
of the Group’s senior management, to
review, deliberate and approve major
business, governance, organisation/
people and risk management related
decisions that impact the whole Group
or a substantial part of the Group;
to delegate their implementation
to specific groups or individuals;
to review and track progress of
previously approved decisions; and
to oversee the development and review
of overarching compliance policies and
guidelines for the Group. MexCo also
oversees sustainability issues, including
determining the Group’s policies
and targets;
to regulatory compliance, directs
and supports the development of
overarching compliance policies
and guidelines, and facilitates the
implementation and sharing of
policies and procedures across
the Group;
5. Group Regulatory Compliance Working
Team, 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. Digital Transformation Steering
Committee, which provides strategic
guidance and endorses group-wide
technology vision, initiatives and
policies to achieve alignment
and optimisation in achieving
business strategies;
7. Group Sustainability Working
Committee, which drives, coordinates
and monitors the execution of the
Group’s sustainability efforts;
8. 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;
9. Group Business Continuity Management
Steering Committee, 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;
10. Group Business Continuity Management
Working Committee, which supports the
Group Business Continuity Management
Steering Committee 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
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
11. Transformation Office, which was
established to drive the implementation
of the Group’s Vision 2030, to develop
the strategic roadmap of the Company’s
transformation into an integrated
business, and to coordinate the projects
and initiatives across the Group.
Annual Report 2022
83
Governance
Corporate Governance
Board Matters
The Company’s directors have equal
responsibility to oversee the business and
affairs of the Group. Management on the
other hand is responsible for the day-to-day
operation and administration of the Group in
accordance with the policies and strategy
set by the Board.
At the wholly-owned subsidiary companies
level, each major subsidiary company’s board
comprises at least five directors, including
the CEO and CFO of the Company, the CEO
of the subsidiary company, one or two next
generation leaders of the Group and one
independent director from the Board of the
Company. This allows for more efficient and
coordinated decision making and enables
the Board to maintain appropriate oversight
through the CEO and CFO of the Company
and independent director of the Board on the
respective major subsidiary companies’ boards,
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 on the boards of major subsidiary
companies is to provide them with greater
exposure as part of succession planning and
talent management. Matters discussed at the
quarterly board meetings of the respective
major subsidiary companies include
sustainability and safety, risk and compliance,
audit, internal controls, financial-related
matters, and business and operations.
The Company has also adopted internal
guidelines setting forth matters that require
Board approval. Material items that require
Board approval include strategic directions,
annual budget, financial results and dividend
declaration. Further, all transactions exceeding
$150 million by any Group company (not
separately listed) require the approval of the
Board. For transactions between $30 million
and $150 million, IMPAC will determine if
Board approval is required, depending on
the individual considerations for each case.
Role: The principal functions of the Board
are to:
•
provide entrepreneurial leadership
and decide on matters in relation to
•
•
•
•
•
the Group’s 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
Group, establish, with management, the
strategies and financial objectives to 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 Group’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: The Company’s
directors are required 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 2022,
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 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 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 the
Group’s strategy. The offsite Board strategy
meeting, which includes directors as well as
senior management and potential next
generation leadership, includes a review of
the progress made, deep-dive discussions
on key strategic issues, and alignment
on the strategic direction going forward.
It provides a good platform for the
non-executive directors to have a deep
understanding of the Group and its
businesses and get to know the current
and future leadership team.
For FY 2022, the focus of the strategy
meeting was on the progress and execution
of Vision 2030, which included an in-depth
scenario planning exercise taking into
account the volatility of the external
environment, as well as recurring topics
such as sustainability. The strategy
meeting also covered an in-depth review
of each of the four business segments
(Asset Management, Urban Development,
Energy & Environment and Connectivity)
and the related key projects.
84
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”), extraordinary general meeting
(“EGM”), and the board and board committee meetings held in FY 2022, are disclosed in the table below:
Attendance
Danny Teoh
Loh Chin Hua
Till Vestring
Veronica Eng
Jean-François Manzoni
Teo Siong Seng
Tham Sai Choy
Penny Goh1
Shirish Apte
Olivier Blum2
Jimmy Ng3
No. of Meetings Held
2022
Annual
General
Meeting
2022
Extraordinary
General
Meeting
Board
Meetings
Audit
Nominating
Remuneration
Sustainability
and Safety
Risk
Board Committee Meetings
1
1
1
1
1
1
1
1
1
0
0
1
1
1
1
1
1
1
1
1
1
1
1
1
11
11
11
11
9
11
11
11
9
5 out of 6
6 out of 6
11
–
–
–
5
–
–
5
5
5
–
–
5
4
–
3
–
4
–
–
–
–
–
–
4
5
–
5
–
5
–
–
2 out of 2
–
–
–
5
4
4
–
–
–
4
–
–
–
1 out of 2
–
–
–
4
–
–
4
4
4
–
–
4
2 out of 2
4
Notes:
1 Mrs Penny Goh was appointed as a member of the Remuneration Committee with effect from 1 June 2022.
2 Mr Olivier Blum was appointed as a non-executive and independent Director and a member of the Board Sustainability and Safety Committee with effect from 1 May 2022.
3 Mr Jimmy Ng was appointed as a non-executive and independent Director and a member of the Board Risk Committee with effect from 1 May 2022.
Barring unforeseen circumstances, directors
are expected to attend all board and board
committee meetings. If a director were
unable to attend a board or board committee
meeting, he/she would still receive all the
papers and materials for discussion at
that meeting. He/she would review them
and advise the Chairman and/or board
committee chairman of his/her views and
comments on the matters to be discussed
so that they may be conveyed to other
members at the meeting.
Non-executive Directors’ (“NED”) Meetings:
NED meetings, chaired by the Board Chairman,
are held at the end of each scheduled
quarterly board meeting without the
presence of management to discuss
matters such as board processes, risk
and compliance matters, succession
planning and leadership development,
and performance management and
remuneration matters. Any relevant
feedback is shared and discussed with
the CEO.
Independent Directors’ (“ID”) Meetings:
ID meetings, chaired by the Lead Independent
Director, are held on a need-be basis after
the NEDs’ meetings at the end of each
scheduled quarterly board meeting,
without the presence of the Board Chairman
and management. From FY 2023, ID
meetings are held twice a year in January
and July, and on a need-be basis, without
the presence of the Board Chairman and
CEO. Any relevant feedback would be shared
and discussed with the Board Chairman.
Company Secretaries: The Company
Secretaries administer, attend and
prepare minutes of board proceedings.
They assist the Board Chairman to ensure
that board procedures (including but not
limited to assisting the Board Chairman to
ensure timely and good information flow to
the Board and 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
relevant rules and regulations, including
requirements of the Companies Act,
Securities & Futures Act and Listing Manual
of the Singapore Exchange Securities
Trading Limited (“SGX”) are complied with.
They also assist the Board Chairman and
the Board to implement and 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 the SGX.
The appointment and removal of the
Company Secretaries are subject to
the approval of the Board.
Annual Report 2022
85
Governance
Corporate Governance
Access to Information: The Board and
management fully appreciate that fundamental
to good corporate governance is an effective
and robust Board whose members engage
in open and constructive debate and
challenge management on its assumptions
and proposals, and that for this to happen,
the Board must be kept well informed of the
Company’s businesses and affairs and be
knowledgeable about the industry in which
the businesses operate. The Company has
therefore adopted initiatives to put in place
processes to ensure that the NEDs are well
supported by accurate, complete and timely
information, have unrestricted access to
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 a group or individually,
may seek and obtain independent professional
advice to assist them in their duties, at the
expense of 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 directors 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 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 Board is briefed on 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
operates are circulated to the directors from
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 meeting its
strategic business objectives or financial
targets and other information relevant to the
strategic issues facing the 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
would be disclosed and explained.
Management also provides the Board
members with management accounts
on a 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 reporting standards,
changes in the Companies Act, continuing
listing obligations and industry-related matters,
so as to update and refresh them on matters
that may affect or enhance their performance
as board or board committee members.
Site visits are also conducted periodically
for directors to familiarise them with the
operations of the various businesses so
as to enhance their performance as board
or board committee members. All induction,
training and development costs are at the
Company’s expense.
In FY 2022, some directors attended talks
on topics relating to sustainability, digitalisation,
decarbonisation and diversity trends, health,
safety & environment, technology foresight,
China’s business environment, risk management,
governance and macroeconomic trends.
E-training was also conducted on the Group’s
Code of Conduct and its policies on anti-bribery,
conflict of interest, health, safety & environment,
whistle-blowing, sanctions, insider trading,
and cyber security. All directors have also
attended sustainability training courses
mandated by Singapore Exchange Regulation
(SGX RegCo).
FY 2022, over 25 distinguished speakers
shared their vision of the future with over
300 participants including the Company’s
Board, management and key leadership
teams across the Group’s lines of business.
Topics covered included imagining the
customers and employees of tomorrow,
how resource constraints will shape the
future, connectivity technologies including
Web3, Metaverse and Quantum Computing,
the next horizon for Energy Transition, the
evolving carbon economy of the future, the
future of liveability across senior living, built
environment and servitisation of business,
as well as sustainability financing and
impact investing.
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.
Nominating Committee
The Nominating Committee (“NC”)
comprises entirely NEDs, the majority of
whom (including the chairman of the NC)
are independent, namely:
• Prof Jean-François Manzoni
Independent Chairman
• Mr Danny Teoh
Non-Executive and
Non-Independent Member
• Mr Till Vestring
Independent Member
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.
Each director is also invited to participate in
the annual Keppel Technology Advisory Panel
conference. In the one-day lineup held in
The detailed terms of reference of the NC
are disclosed on pages 109 to 110 herein.
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Keppel Corporation Limited
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 the Board on
the appointment of new director and
re-nomination of directors.
Process for appointment of new directors
Process for re-nomination of retiring Directors
a. NC reviews annually the balance and mix
of skills, knowledge, experience, and other
aspects of diversity such as gender and
age, race/ethnicity and nationality, and
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.
a. Pursuant to the Constitution, one-third of
the directors shall retire from office at the
Company’s annual general meeting every
year, and a director appointed after the last
annual general meeting shall only hold
office until the next annual general meeting.
If eligible, these directors may submit
themselves for re-election.
b. In the light of such review and in
b. NC reviews each director’s eligibility,
consultation 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
c. NC makes recommendations to the Board
for approval.
consideration the following objective
criteria identified as necessary for
the Board and board committees to
be effective:
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 shortlisted
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.
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
other aspects of diversity (such as gender,
age, race/ethnicity and nationality) so as to
promote the inclusion of 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 the appointment of directors
would be based on the objective criteria
set by the Board from time to time on the
recommendation of the NC after having
regards to the benefits of diversity and the
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 help the
NC identify gaps (if any) in skills, knowledge,
experience and other aspects of diversity in
the board composition in any given year of
assessment, each member of the Board
is required to complete a Board 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 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 recommendations of the NC, review
and agree annually the qualitative and
measurable quantitative objectives for
achieving diversity on the Board.
Annual Report 2022
87
Governance
Corporate Governance
Achievement of Qualitative and measurable Quantitative Objectives identified under the Board Diversity Policy for the period
FY 2022 to FY 2024, and Adoption of New Rolling 3-year Board Diversity Objective for the period FY 2023 to FY 2025
The objectives identified by the NC in FY 2021 for the period FY 2022 to FY 2024 were reviewed in January 2022 and more recently in
January 2023.
The progress towards achieving such objectives as at the end of FY 2022 are set out below.
Objectives
Progress
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).
Prior to his retirement from Citigroup in 2014, Mr Apte had built up 32 years of financial services
experience, holding various senior roles within the group, 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.
Mr Jimmy Ng was appointed as an independent director to the Board with effect from 1 May 2022.
Mr Ng is currently the Group Chief Information Officer, as well as Head of Group Technology &
Operations at DBS Bank. He possesses more than 30 years of regional and global experience in
both wholesale banking and consumer banking businesses with DBS Bank, RBS, ABN Amro Bank and
J.P. Morgan. Prior to his current appointment, Jimmy was the Chief Audit Executive for Group DBS
and the Head of Consumer Banking Operations, where he spearheaded the transformation of the
Audit function and the Consumer Banking Operations using advanced data analytics and machine
learning techniques. The NC was of the view that Mr Ng was a suitable addition to the Board given
his in-depth experience and expertise in driving digitalisation as a corporate strategy, and significant
experience in the application of technology and innovations across a spectrum of areas, considering
that under Vision 2030, the Group’s growth would in part be driven by advanced technologies and
digitalisation, and investment in new technologies and building capabilities would be critical to get
the Group to where it wants to be in the future.
Mr Olivier Blum was appointed as an independent director to the Board with effect from 1 May 2022.
Mr Blum is currently the Executive Vice-President of Schneider Electric’s Energy Management Business
and a member of the company’s Executive Committee. Prior to this, Mr Blum was the Chief Strategy &
Sustainability Officer of Schneider Electric, where he led the development of the company’s strategic,
sustainability and quality initiatives, while steering its merger, acquisitions, and divestment activities
globally. Before this, he was on Schneider Electric’s Executive Committee as the company’s Chief
Human Resources Officer. Currently based in Hong Kong, Mr Blum has been living and working in
Asia for the last two decades, during which he has held leadership positions in China and India. The NC
was of the view that Mr Blum’s in-depth experience and expertise in sustainability could help drive the
Group’s sustainability-as-a-business initiative and guide the Group on its sustainability journey. Further,
as the Group continues on its transformational journey under Vision 2030, the Board will benefit from
Mr Blum’s regional operational experience in China and India, and his talent management experience
as a former Chief Human Resource Officer.
With the appointment of Mr Jimmy Ng and Mr Olivier Blum, both of whom are in their 50s, the age
diversity of the Board has improved.
The NC, in consultation with management, continues to source for suitable candidates with relevant
knowledge and experience while also being mindful of age and gender diversity.
Mr Jimmy Ng, who was appointed as an independent director to the Board with effect from
1 May 2022, has in-depth experience and expertise in driving digitalisation as a corporate strategy,
and significant experience in the application of technology and innovations across a spectrum
of areas.
Mr Olivier Blum, who was appointed as an independent director to the Board with effect from
1 May 2022, has in-depth experience and expertise in sustainability that could help drive the
Group’s sustainability-as-a-business initiative and guide the Group on its sustainability journey.
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.
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
88
Keppel Corporation Limited
In January 2023, in view of the substantial
progress that had been made in respect of
the diversity objectives previously identified,
a further 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,
was undertaken. It was noted by the
NC that the focus of the Board diversity
objectives for the next rolling 3-year period
from FY 2023 to FY 2025 could be
appropriately consolidated as shown
in the diagram on the right.
Other Aspects of Diversity
Objective
Source for candidates with deep
knowledge and experience in
investment, infrastructure/engineering
and relevant regional expertise,
while being mindful of age and
gender diversity.
Race or Ethnicity (%)
Tenure (%)
Gender (%)
Chinese
Caucasian
Indian
Total
Age (%)
51–55
56–60
61–65
66–70
Total
63.6
27.3
9.1
0–4 years
5–9 years
Above 9 years
100.0
Total
63.6
27.3
9.1
100.0
Male
Female
Total
81.8
18.2
100.0
Country of Origin, Nationality or
Cultural Background (%)
9.1
18.2
27.3
45.4
100.0
Singaporean
German
Canadian
British
French
Total
63.6
9.1
9.1
9.1
9.1
100.0
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
Annual Report 2022
89
Governance
Corporate Governance
Retirements and Re-nomination
For the upcoming AGM, Mr Danny Teoh,
Mr Till Vestring and Ms Veronica Eng
will be retiring by rotation pursuant to
the Constitution, and being eligible, will be
seeking re-election. Mr Olivier Blum and
Mr Jimmy Ng, having been appointed after
the AGM held in FY 2022 (“2022 AGM”),
will also be retiring at the upcoming AGM,
and being eligible, will also be seeking
re-election.
The NC has reviewed the abovementioned
directors’ eligibility, contribution and
performance, and taking into account the
results of their recent peer assessment, are
of the view that all five directors have given
sufficient time and attention to the affairs
of the Company and have been able to
discharge their duties as directors effectively.
The Board, at the recommendation of the NC,
had therefore approved the re-nomination
of Mr Danny Teoh, Mr Till Vestring,
Ms Veronica Eng, Mr Olivier Blum and
Mr Jimmy Ng at the upcoming AGM.
Succession Planning for
Key Management Personnel
The NC reviews the succession plans
for key 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.
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 developing
senior leaders both individually and
collectively as a group.
Annual Review of Board Independence
The NC determines on an annual basis
whether or not a director is independent.
In January 2023, 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
90
Keppel Corporation Limited
rules on the circumstances in which a
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, consistent
with the approach taken since the
re-designation of Mr Teoh as non-executive
and non-independent Chairman with
effect from 1 January 2022, deemed
Mr Teoh as non-independent.
The NC noted Mr Till Vestring had declared
himself independent by virtue of the absence
of ties, relationships or obligations to
the Company. Taking these factors into
consideration, along with his invaluable
contributions to the Board and board
committees, the NC unanimously
agreed that Mr Vestring had at all times
exercised independent judgment in the
best interests of the Company in the
discharge of his director’s duties and
should therefore continue to be deemed
an independent director.
The NC noted that Ms Veronica Eng had
declared herself independent and declared
her position as member of the Investment
Committee of Temasek Trust, which was
established by Temasek to provide financial
oversight and governance of philanthropic
endowments and gifts from Temasek and
other donors. Noting that Ms Eng did not
hold any executive or management role
in Temasek Trust, along with Ms Eng’s
invaluable contributions to the Board and
board committees, the NC unanimously
agreed that Ms Eng had at all times
exercised independent judgment in the
best interests of the Company in the
discharge of her director’s duties and
should therefore continue to be deemed
an independent director.
The NC noted that Prof Jean-François
Manzoni had declared himself independent.
Noting Prof Jean-François Manzoni’s
absence of relationship to the Company
which could interfere or be perceived to
interfere with his independent judgment,
the absence of circumstances which would
deem him to be non-independent, and his
valuable contributions to the Board and
board committees, the NC unanimously
agreed that Prof Jean-François Manzoni had
at all times exercised independent judgment
in the best interests of the Company in the
discharge of his director’s duties and should
therefore continue to be deemed an
independent director.
The NC noted that Mr Teo Siong Seng
had declared his position as Executive
Chairman of Pacific International Lines
Pte Ltd which is majority owned by
Heliconia Capital Management Pte. Ltd.,
a wholly-owned subsidiary of Temasek.
Although all the NC members were
confident that Mr Teo would be able to
continue to exercise independent judgment
in the best interests of the Company,
the NC considered that market perception
might be different, and the NC hence
decided to deem Mr Teo as a non-executive
and non-independent director.
The NC noted that Mr Tham Sai Choy had
declared his directorship on DBS Group
Holdings, DBS Bank Ltd., and DBS Bank (China)
Limited, which provide banking 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 was potential conflict
of interest. The NC further considered that,
as DBS was 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
consideration, along with his invaluable
contributions to the Board and board
committees, the NC unanimously agreed
that Mr Tham had at all times exercised
independent judgment in the best interests
of the Company in the discharge of his
director’s duties and should therefore 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 provides legal services to the Group.
Mrs Goh had declared that she did not hold
a partnership interest in A&G and was not
involved in the selection and appointment of
legal advisors of the Group and did not regard
the business relationship with A&G 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
services would be sought by the Group
from time to time. Taking these factors into
consideration, along with her invaluable
contributions to the Board and board
committees, the NC unanimously agreed that
Mrs Goh had at all times exercised independent
judgment in the best interests of the
Company in the discharge of her director’s
duties and should therefore continue to be
deemed an independent director.
The NC noted that Mr Shirish Apte had
declared himself independent. Noting
Mr Shirish Apte’s absence of relationship to
the Company which could interfere or be
perceived to interfere with his independent
judgment, the absence of circumstances which
would deem him to be non-independent, and
his valuable contributions to the Board and
board committees, the NC unanimously
agreed that Mr Shirish Apte had at all times
exercised independent judgment in the best
interests of the Company in the discharge
of his director’s duties and should therefore
continue to be deemed an independent director.
The NC noted that Mr Jimmy Ng is the
Group Chief Information Officer, as well as
Head of Group Technology & Operations at
DBS Bank which provides banking services
to the Group. The NC considered that such
interests had already been declared to
the Board, and that Mr Ng would abstain
from voting whenever there was potential
conflict of interest. The NC further
considered that, as DBS was 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.
The NC further noted Mr Ng’s declaration
that apart from providing banking services
to the group, DBS also procures telco
services (including services from M1) after
obtaining a range of quotes and evaluation
by a committee. Taking these factors
into consideration, along with Mr Ng’s
invaluable contributions to the Board and
board committees, the NC unanimously
agreed that Mr Ng had at all times
exercised independent judgment in the
best interests of the Company in the
discharge of his director’s duties and
should therefore continue to be deemed
an independent director.
The NC noted that Mr Olivier Blum declared
himself independent and that he was an
executive Vice President of Schneider
Electric’s Energy Management business.
Noting Mr Blum’s declaration that
Schneider Electric is a minor supplier
of the Keppel Group, and Mr Blum’s
invaluable contributions to the Board and
board committees, the NC unanimously
agreed that Mr Blum had at all times
exercised independent judgment in the
best interests of the Company in the
discharge of his director’s duties and
should therefore continue to be deemed
an 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, Mr Shirish Apte, Mr Olivier Blum
and Mr Jimmy Ng 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 of the
NC’s recommendations and concurred with
the assessment of independence in respect
of the abovementioned directors. In view
of the above, the Board currently comprises
a majority of independent directors, with
a total of 11 directors of whom eight are
independent. Taking into account the
independence and diversity of the Board,
the NC was 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 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 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 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 2023 and was of the view that
each director has given sufficient time and
attention to the 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
recent individual director assessment for
FY 2022, all the directors performed well.
The NC was therefore satisfied that in
FY 2022, 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 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 Nominee
Director. The policy would be reviewed and
amended as required to take into account
current best practices and changes in the
law and stock exchange requirements.
Alternate Director
The Company has no alternate directors
on the Board.
Annual Report 2022
91
Governance
Corporate Governance
Key Information Regarding Directors
The following key information regarding
directors is set out in the following pages of
this Annual Report:
Pages 38 to 41: 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 details of their
membership on board committees; and
Page 127: 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, and
the contribution by the Chairman and peer
assessment of the individual directors to the
effectiveness of the Board. The evaluation for
FY 2022 was conducted by Egon Zehnder, as
supported by the NC. The evaluation process
is set out on page 111 of this Annual Report.
Formal Process and Performance Criteria:
The evaluation processes and performance
criteria are disclosed in Appendix 1 to this
report. The performance criteria was similar
to that adopted in 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
allow 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 helps the directors to focus on
their key responsibilities. The assessment
exercise also allows for peer review with a
view to raising the quality of Board members.
It also assists the NC in determining whether
to re-nominate directors who are due for
retirement at the next AGM, and in determining
whether directors with multiple board
representations were nevertheless able
to and have adequately discharged their
duties as directors of the Company.
92
Keppel Corporation Limited
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 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 non-executive directors,
the majority of whom (including the chairman
of the RC) are independent, namely:
• Mr Till Vestring
Independent Chairman
• Mr Danny Teoh
Non-independent Member
• Prof Jean-François Manzoni
Independent Member
• Mrs Penny Goh
(from 1 June 2022)
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 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 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 and KCL
Performance Share Plan (the KCL RSP
and KCL PSP). The KCL RSP 2020
and the KCL PSP 2020 (collectively
the “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 the
RC are disclosed on page 110 herein.
Access to Expert Advice: The RC has
access to expert advice from external
remuneration consultants where required.
In FY 2022, the RC sought views from
external remuneration consultant,
Willis Towers Watson, on market practice
and trends, and benchmarks against
comparable organisations. The RC
undertook a review of the independence
and 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
Company which would affect their
independence and objectivity.
Policy in Respect of Non-executive
Directors’ Remuneration
Each NED’s remuneration comprises
a basic fee and an additional fee for
services 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 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 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
Directors’ Fee Structure
Board Chairman
Board Member
Lead Independent Director
Audit Committee
Board Risk Committee
Remuneration Committee
Board Sustainability and 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
responsibilities of the Board and board
committees. The revised directors’ fee
structure took effect from FY 2022 onwards
and is set out in the table above.
Shareholders’ approval for the payment
of directors’ fees will be sought at each
AGM. If approved, each 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 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
the first trading day immediately after the
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
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
the next 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.
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 the shareholders’ and
the long-term interests of the Company.
A NED who steps down before the payment
of the Remuneration Shares will receive all
of his directors’ fees for that year (calculated
on a pro-rated basis, where applicable)
in cash.
The aggregate directors’ fees for NEDs
for FY 2023 are subject to shareholders’
approval at the forthcoming AGM.
The 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
FY 2023. 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
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 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 and performance of the Group,
its businesses and individual employees,
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 finding a
balance between current versus long-term
remuneration, and between cash versus
equity incentive remuneration, and
appropriate to attract, retain and motivate
key management personnel to successfully
manage the Company for the longer term.
The total remuneration structure reflects
the 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 communicated 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 2022,
contingent shares were awarded under the
New Share Plans. The KCL RSP and KCL
PSP are long term incentive plans which
vest over a longer-term horizon. A portion
of the annual performance bonus is granted
in the form of deferred shares that are
awarded under the KCL RSP. The KCL PSP
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 judgement in ensuring that the
amount and mix of remuneration is aligned
with the interests of shareholders and
promotes the long-term success of the
Company. The mix of fixed and variable
reward is considered appropriate for the
Group and for each individual role.
Annual Report 2022
93
Governance
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 vesting schedule;
b. by incorporating appropriate key
performance indicators (“KPIs”) for
awarding of annual performance bonus:
i. For FY 2022, there are three
scorecard areas that the Company
has identified as key to measuring
the performance of the Group and
aligned with the Vision 2030 goals
– (i) Drivers – Vision 2030 Value
Creation and Transformation;
(ii) Outcomes – Financials; and
(iii) Enablers – People and
Stakeholders. Some of the key
sub-targets within each of the
scorecard areas include key financial
indicators, sustainability, safety, risk
management, compliance and controls,
employee engagement, talent
development and succession planning.
ii. 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.
c. by selecting performance conditions
for the KCL PSP 2020 awards, namely
Total Shareholder Return, Return on
Equity, Net Profit and Reduction in
Carbon Emissions that are aligned
with shareholders’ interests;
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.
94
Keppel Corporation Limited
Enablers
People &
Stakeholders
Outcomes
Financial
Corporate
Scorecard
Drivers
Vision 2030
Value Creation &
Transformation
The RC also recognises the need for a
reasonable alignment between risk and
remuneration to discourage excessive
risk 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:
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;
c. vesting of contingent share awards
under the KCL PSP 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
management personnel to hold a
minimum number of shares under the
share ownership guideline; and
f. exercising discretion to ensure that
remuneration decisions are aligned to
the Company’s long-term strategy and
performance and discourage excessive
risk taking.
For FY 2022, in consideration of the
extraordinary contribution and effort put in
by key management and certain employees
towards the successful combination of
Keppel Offshore & Marine Ltd (“KOM”) and
Sembcorp Marine Ltd (“SCM”), a one-off
Special Bonus award had been granted to
these individuals as a form of recognition.
The Special Bonus is payable in the form
of cash bonus and deferred shares that will
vest over a 3-year period.
The RC is of the view that the overall level of
remuneration is not considered to be 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 RC recommends the total
remuneration for the key management for
the Board’s approval. The Board and RC are
of the view that the remuneration is aligned
to performance during FY 2022.
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
form of shares in the Company and are
encouraged to hold such shares while they
remain in the employment of the Company.
The executive director and key management
personnel are required to hold at least 2
times of their annual fixed pay in the form
of shares in the Company, while other key
senior management are required to hold
at least 1.5 times of their annual fixed pay
under the share ownership guideline so as
to maintain a 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.
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 applies to a
broader base of employees while the KCL
PSP applies to a selected group of key
management personnel. The range of
performance targets to be set under the
KCL PSP emphasise stretched targets
aimed at sustaining longer-term growth.
Given the Group’s strong focus on
providing sustainability-related solutions,
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 incorporated in various
incentive programmes, including
the annual scorecard that determines
the annual performance bonus pool
for all employees, the 3-year KCL PSP
that is awarded to a selected group of
key management personnel as well as
the one-time 5-year V2030 PSP-TIP
that was awarded to selected senior
management and key employees who
will be contributing significantly towards
the attainment of Vision 2030. The
weightages of the sustainability targets
vary across the various programmes,
weighing up to 25% for the 3-Year
KCL PSP awards.
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. Outstanding
performance bonuses and share awards
under the New Share Plans are also
subject to RC’s discretion before further
payment or vesting can occur.
Details of the KCL Share Plans are set out
in pages 128 to 131, and pages 166 to 169.
Targets of the 3-Year KCL Performance Share Plan (From FY 2022 Onwards)
Sustainability
Growth
Capital
Efficiency
Shareholder
Value Creation
Annual Report 2022
95
Governance
Corporate Governance
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 2022
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
($)
Share
Awards3,4
($)
Total
Remuneration
($)
PSP
RSP
Remuneration &
Name of Director
Loh Chin Hua
Danny Teoh
Till Vestring9
Veronica Eng10
Jean-François Manzoni
Teo Siong Seng
Tham Sai Choy11
Penny Goh12
Shirish Apte13
Olivier Blum14
Jimmy Ng15
1,253,200
–
–
–
–
–
–
–
–
–
–
2,188,302
–
–
–
–
–
–
–
–
–
–
–
525,000
143,500
152,600
125,300
108,500
149,100
145,023
132,300
65,311
68,600
–
225,000
61,500
65,400
53,700
46,500
63,900
62,152
56,700
27,990
29,400
n.m.6
–
–
–
–
–
–
–
–
–
–
2,428,000
–
–
–
–
–
–
–
–
–
–
2,272,998
–
–
–
–
–
–
–
–
–
–
8,142,5007,8
750,000
205,000
218,000
179,000
155,000
213,000
207,175
189,000
93,301
98,000
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 2022 were met.
2 Based on the NEDs’ fee structure set out in the 2021 Annual Report, the total fees amount to $2,307,476. This amount is within the sum of up to S$2,491,000 approved in
the 2022 AGM.
3 Shares awarded under the KCL PSP are subject to pre-determined performance targets over a three-year performance period. As at 29 April 2022, being the grant date for
the contingent awards under the KCL PSP, the estimated value of each share was $6.07. For the KCL PSP, 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 award of KCL RSP deferred shares was granted for Mr Loh Chin Hua’s performance and contributions in FY 2022. The Company’s 2022 volume-weighted average share
price of $6.64 was used to determine the number of KCL RSP deferred shares to be awarded to him as well as his FY 2022 total remuneration. As at 15 February 2023, being
the grant date for the awards under the KCL RSP, the estimated value of each share was $6.73.
5 The amounts stated may be adjusted as indicated on pages 92 to 93 of this report.
6 n.m. – not material
7
In addition to the remuneration disclosed above, in view of the extraordinary contribution and effort put in by key management and certain employees towards the
successful combination of Keppel Offshore & Marine Ltd and Sembcorp Marine Ltd, a one-off Special Bonus award had been granted to these individuals as a form of
recognition (as per above). The RC had granted Mr Loh Chin Hua a one-off cash bonus of $1,000,003 and a one-off grant of $999,997 KCL RSP deferred shares. The
Company’s 2022 volume-weighted average share price of $6.64 was used to determine the number of KCL RSP deferred shares to be awarded. Shares awarded under
the KCL RSP are subject to vesting over a 3-year period. As at 1 March 2023, being the grant date for the awards under the KCL RSP, the estimated value of each share
was $5.13.
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 Till Vestring was concurrently a member of the Board of Keppel Telecommunications & Transportation Ltd in FY 2022 and will receive a fee of $45,000 for his services
rendered in the year.
10 Ms Veronica Eng was concurrently a member of the Board of Keppel Capital Holdings Pte Ltd in FY 2022 and will receive a fee of $45,000 for her services rendered in
the year.
11 Mr Tham Sai Choy was concurrently a member of the Board of Keppel Offshore and Marine Ltd in FY 2022 and will receive a fee of $45,000 for his services rendered in
the year.
12 Mrs Penny Goh retired as Chairman of Keppel REIT Management Limited (“KRML”) with effect from 31 May 2022 and was a member of the Board of Keppel Land Limited
(“KLL”) in FY 2022. She will receive a prorated fee of $62,055 for her services rendered to KRML and a fee of $45,000 for her services rendered to KLL in the year.
13 Mr Shirish Apte was concurrently a member of the Board of Keppel Infrastructure Holdings Pte Ltd in FY 2022 and will receive a fee of $45,000 for his services rendered in
the year.
14 Mr Olivier Blum was appointed to the Board and as a member of the Board Sustainability and Safety Committee with effect from 1 May 2022. Fees are prorated accordingly.
15 Mr Jimmy Ng was appointed to the Board and as a member of the Board Risk Committee with effect from 1 May 2022. Fees are prorated accordingly.
96
Keppel Corporation Limited
PSP and RSP Shares granted and vested for the Executive Director are shown below:
PSP
Awards
Vesting
Date
Awards of
PSP Shares
Number of
PSP Shares
Vested
Value of
PSP Shares
Vested
($)1
RSP
Awards
Vesting
Date
Awards of
RSP Shares
Number of
RSP Shares
Vested
Value of
RSP Shares
Vested
($)1
Name of
Executive Director
Loh Chin Hua
2016
Awards
28 Feb
2022
2018
Awards3
2019
Awards3
28 Feb
2022
28 Feb
2023
0 to 1,125,0002
359,531
2,149,995
2020
Awards
28 Feb 2020
301,887
100,629
643,583
0 to 480,000
134,400
803,712
26 Feb 2021
28 Feb 2022
100,629
100,629
517,233
601,761
0 to 782,9255
2020
Awards
2021
Awards
28 Feb
2023
29 Feb
2024
27 Feb
2026
0 to 782,9255
0 to 782,9255
0 to
2,080,6504,5
2022
Awards
28 Feb
2025
0 to 858,0005
–
–
–
–
–
– 2021
26 Feb 2021
298,2625
86,956
446,954
Awards
–
28 Feb 2022
28 Feb 2023
86,956
519,997
–
–
– 2022
28 Feb 2022
510,7755
132,325
791,304
Awards
–
28 Feb 2023
29 Feb 2024
– 2023
28 Feb 2023
640,1185
Awards
31 Mar 2023
29 Feb 2024
28 Feb 2025
–
–
–
–
–
–
–
–
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 2022 were met.
2 Refers to one-time contingent shares awarded under the Vision 2020 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 one-time contingent shares awarded under the Vision 2030 KCL PSP – TIP.
5 Arising from the distribution of SCM shares by way of distribution in specie to entitled Keppel shareholders following completion of the proposed combination of KOM and
SCM on 28 February 2023 on the basis of 19.085033835 SCM shares per Keppel share, the RC approved the adjustments to unvested shares under the award.
The total remuneration paid to the key management personnel (who are not directors or the CEO) in FY 2022 was $19,507,200. 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:
Base/Fixed
Salary (%)
Performance-Related
Cash Bonuses Earned1 (%)
Benefits-
in-Kind (%)
Contingent Awards of Shares
Remuneration Band and
Name of Key Management Personnel
Above $4,250,000 to $4,500,000
Chan Hon Chew
Above $3,500,000 to $3,750,000
Tan Hua Mui, Christina2
Above $2,500,000 to $2,750,000
Ong Leng Yeow, Chris
Lim Lu-Yi, Louis
Lim Joo Ling, Cindy
Above $1,750,000 to $2,000,000
Pang Thieng Hwi, Thomas
Manjot Singh Mann
19
21
25
25
22
27
33
PSP (%)
RSP (%)
28
28
25
26
28
24
19
n.m.
n.m.
n.m.
n.m.
n.m.
n.m.
4
24
24
24
24
22
25
25
29
27
26
25
28
24
19
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 2022 were met.
3
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.
In addition to the remuneration disclosed above, in view of the extraordinary contributions put in by the key management towards the successful combination of KOM and
SCM, a one-off Special Bonus award comprising cash bonus and KCL RSP deferred shares had been granted to them. The Company’s 2022 volume-weighted average share
price of $6.64 was used to determine the number of contingent KCL RSP deferred shares to be awarded. Shares awarded under the KCL RSP are subject to vesting over a
3-year period. As at 8 February 2023 and 1 March 2023, being the grant dates for the contingent awards under the KCL RSP, the estimated value of each share was $6.69
and $5.13 respectively. The cash bonus and deferred shares awards are each in the range of $500,000 to $750,000 for Mr Chan Hon Chew and Mr Chris Ong, and in the
range of $250,000 to $500,000 for the remaining key management personnel.
Annual Report 2022
97
Governance
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 financial year ended 31 December 2022.
“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 independent directors, namely:
• Mr Tham Sai Choy
Independent Chairman
• Ms Veronica Eng
Independent Member
• Mrs Penny Goh
Independent Member
• Mr Shirish Apte
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 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 profit participation structures, and
has 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
Board Risk Committee, 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
98
Keppel Corporation Limited
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 AC are set out on page 108 herein.
Audit
The AC met with the external auditors five
times during the year and one of the meetings
was without the presence of management
and the internal auditors. The AC also met
with the internal auditors five times during the
year, and one of the 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 assessed the quality of
the work carried out by the external auditors
in accordance with the Audit Quality Indicators
Disclosure Framework published by the
Accounting and Corporate Regulatory Authority
and noted their performance to be adequate.
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
the external auditors would not affect their
independence. For details of fees payable to
the auditors in respect of audit and non-audit
services, please refer to Note 27 of the Notes
to the Financial Statements on pages 192
and 193.
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 controls, and risk
management. Any significant non-compliance
or failures in internal controls together with
recommendations for 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 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 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.
The purpose, authority and responsibility
of Group Internal Audit are defined in the
Audit Charter, which is reviewed annually
and approved by the AC. The 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 internal audit
engagements; and defines the scope of
internal audit activities. The Audit Charter
mandates Group Internal Audit to maintain
a quality assurance and improvement
programme 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 Institute
of Internal Auditors’ (“IIA”) Code of Ethics.
Group Internal Audit is guided by the
International Professional Practices
Framework established 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 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.
Group Internal Audit adopts 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.
This plan is reviewed and approved by the AC,
who are also apprised on material changes to
the plan regularly. Audits are planned based
on the results of the assessment, with priority
given to high risks. All Group Internal Audit’s
reports are submitted to the AC for deliberation
with copies of these reports extended
to the 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 reported to 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.
With effect from 15 December 2022,
Mr Raghupathi Rao took over from
Ms Sepalika Kulasekera as the General
Manager of Group Internal Audit.
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 an
independent review of the financial
statements of the Company before the
announcement of the Company’s first half
and full year results. In 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 material
impact on the financials.
In its review of the financial statements of
the Group and the Company for FY 2022, 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, revenue recognition
and contract cost, impairment assessment
of goodwill arising from the acquisition of
M1, the presentation of the results of
discontinuing operations, the assessment of
the carrying amount of the disposal group
held for sale in relation to KOM, and
disclosures of material subsequent events,
that might affect the integrity of the financial
statements. The assessment of carrying
amount of the disposal group held for
sale in relation to KOM includes financial
exposure in relation to material contracts,
recoverability of contract assets, material
receivables and stocks, and impairment
assessment of fixed assets. The AC also
considered the report from the 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 2022.
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
estimates and key assumptions used. The
AC also reviewed management’s assessment
of the carrying amount of the disposal
group held for sale in relation to KOM, 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 financial advisor, as 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 business conduct, and was satisfied
that arrangements are in place for the
independent investigation of such matters
and for appropriate follow-up action.
To facilitate the management of incidences
of alleged fraud or other misconduct,
the AC is guided by a set of guidelines to
ensure proper conduct of investigations
and appropriate closure actions following
completion of the investigations, including
administrative, disciplinary, civil and/or
criminal actions, and remediation of control
weaknesses that allowed the perpetration
of 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 112 hereto. The AC reviews the Policy
yearly to ensure that it remains current.
Interested Person Transactions
The Company has established policies
and procedures for reviewing and approving
interested person transactions (“IPTs”)
in accordance with the general mandate
from shareholders that allows for such
transactions where made on normal
commercial terms and 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 all findings
were reported during AC meetings.
The Asset Co Transfer and the KOM
Combination (as defined in the Company's
SGXNet announcement dated 27 April 2022),
collectively the “KOM Transaction”, that were
completed in February 2023, were interested
person transactions. In accordance with the
SGX Listing Rules, the Company appointed
an independent financial advisor (“IFA”) to
advise the AC and the Company’s directors
who were considered independent for the
purpose of the interested person transaction
as to whether the KOM Transaction was
on normal commercial terms and was not
prejudicial to the interests of the Company
and its minority shareholders. The AC
considered the relevant factors and the
advice and opinion of the IFA and reported
to the shareholders of the Company in the
Company’s circular dated 23 November
2022 that the KOM Transaction was
on normal commercial terms and was
not prejudicial to the interests of the
Company and its minority shareholders.
Details of IPTs entered into by the Group
in FY 2022 are set out on page 227 of this
Annual Report.
Risk Management and Internal 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.
Board Risk Committee
The Board Risk Committee (“BRC”) comprises
entirely independent directors, namely:
• Ms Veronica Eng
Independent Chairperson
• Mr Tham Sai Choy
Independent Member
• Mrs Penny Goh
Independent Member
• Mr Shirish Apte
Independent Member
• Mr Jimmy Ng
(from 1 May 2022)
Independent Member
The BRC considers the nature and extent
of 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 the BRC
are disclosed on page 109 herein.
Annual Report 2022
99
Governance
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 Group Risk & Compliance (“GRC”)
department, working in conjunction with the
business teams, supports management in
applying the 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 risks. 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.
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 each key risk area is grouped
by sub-groups within Strategic, Operational,
Compliance and Financial risk, and
the mitigation plans where applicable,
are 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 the “Risk Management” section on
pages 118 to 121 of this Annual Report.
The Group is guided by a set of Risk
Tolerance Guiding Principles, as disclosed
on page 118.
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 where applicable. Employees
are also guided by the Group’s Core Values
and expected to comply strictly with
Keppel’s Code of Conduct. Keppel Cyber
Security Centre consist of Cyber Technology
and Cyber Operations pillars, partnering
business and managing cyber risks through
advisory, building, and running sustainable
next-generation solutions to combat against
evolving cyber threats while meeting
business objectives.
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.
GRC, working in conjunction with
the Group and respective BUs’ line
functions and committees, oversees
the implementation of the Group’s
ERM 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 BUs’ line
functions and committees support and
work alongside GRC and the Group’s and
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Keppel Corporation Limited
BUs’ 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. The Technology Governance
Framework was strengthened in 2022
with the adoption of a uniform framework
structure and methodology to enable
the Group and business units to monitor
and manage technology risks better and
more effectively, as well as to ensure that
activities associated with technology are
aligned with the overall business objectives
through the establishment of the three (3)
pillars in Technology Governance (i.e. Policy,
Technology Risk Management and
Compliance). The Technology Governance
Framework aims to provide an approach
to ensure technology risks are identified
and adequately mitigated in the design,
operation, use, and management of the
Group’s computing resources taking
into consideration statutory, regulatory,
contractual, and security requirements. This
framework covers the use of all technology
systems and assets within the Group,
including 3rd party service providers. The
Head of Group Cyber Security, providing
oversight to Keppel Cyber Security Centre
and Cyber Governance, has a reporting line
to the Board Risk Committee to reinforce
independence and facilitate Board oversight.
Group Cyber Security drives the enterprise
vision, strategy and programme to ensure
that the Group’s technology assets are
adequately protected from cyber threats.
Cyber Governance maintains cyber policies
aligned with industry standards such as
ISO 27001/2, US National Institute of
Standards and Technology as well as local
regulators’ requirements to ensure effective
management of cybersecurity risks. Cyber
assurance and compliance programmes are
executed to ensure developed processes
and controls are effective and adhered to.
The Third Line comprises independent
assurance, including internal and external
audit. Internal audit provides the Board
and 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 support of the audit opinion issued on
the financial statements of the Company.
Enhancements to Compliance Programme
in FY 2022
At Keppel, accountability is a core value.
As Keppel’s Code of Conduct states, “we care
how results are achieved, not just that they
are attained.” Implementing that core
value through enhancing Keppel’s regulatory
compliance process and by reminding every
Keppelite of that core value is a focus of
attention for Keppel, Keppel’s 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 the Group’s compliance
initiatives are set out on pages 122 to 124
of this Annual Report. The Company is
committed to a continuous review and,
where necessary and appropriate, further
improvements and enhancements to 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. During the year, overseas entities
comprising Keppel Land India, Keppel
Infrastructure Belgium and Qatar, as
well as additional Singapore entities
of Keppel Infrastructure, achieved
ISO 37001 certification.
b. Digitalisation initiatives comprise
implementing an integrated system
(Ethixbase) for onboarding and monitoring
of Third-Party Associates across the
Group and launching a Conflicts of
Interest (COI) App for declaration of
such potential conflicts in key projects.
c. A Sanctions Compliance Framework was
implemented to enhance operationalisation
of Group Sanctions Policy.
d. E-training modules were enhanced
to cover Sanctions Compliance and
Business Continuity Management in
the 2022 Annual Training and Declaration
of Group Policies.
Annual Report 2022
101
Governance
Corporate Governance
The Group’s Compliance Programme
The Group’s compliance programme also
includes the following:
including but not limited to, agents and
intermediaries, consultants,
representatives, partners and suppliers.
Individuals at all levels of Keppel comply
with Keppel’s Code of Conduct and its
compliance policies and procedures.
Such policies and procedures address,
among other areas:
a. gifts and hospitality;
b. dealing with third party associates
– due diligence;
c. political contributions;
d. donations and sponsorships;
e.
facilitation payments; and
f. solicitation and extortion.
The Group ensures that:
a. books, records and accounts are in
reasonable detail, and accurately and
fairly reflect the transactions and
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
accordance with the Group’s
general guidelines or
specific authorisation;
5.
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 to maintain
accountability for assets;
iii. access to assets shall only be
permitted in accordance with the
Group’s general guidelines or
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.
4. Training and Orientation
The Group continuously ensures that
its 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. a mandatory annual e-learning
training and declaration covering
all employees comprising the
Keppel Group Code of Conduct and
all other key compliance policies.
For 2022, new e-training modules
included Sanctions Compliance and
Business Continuity Management.
Where necessary and appropriate,
compliance training for agents
and business partners were also
conducted during the year.
b. corresponding certifications by such
senior management members
(including directors), employees,
agents and business partners,
acknowledging their understanding
of policies and conformity with
training requirements.
Internal Reporting, Communication
and Investigation
The Group maintains a system for
the internal reporting/communication
of potential violations of compliance
policies and procedures and applicable
laws, that ensures as far as possible
confidentiality to the whistle-blower
and 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 applicable law. When necessary,
the Group undertakes independent
investigations of the alleged violations.
Due to travel restrictions imposed
in light of COVID-19, in 2022, key
investigations into whistle-blower
complaints alleging misconduct
(of any kind) have been conducted
by local third-party forensic and
investigations specialists.
3. Periodic Risk-based Review
6. Enforcement and Discipline
The Group continues to enhance its
compliance policies and procedures on
the basis of a periodic risk assessment to
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 corrupt
practices risks, including but not limited
to its geographical organisation and
sectors of industrial operation.
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.
The Group institutes disciplinary
measures with reference to,
among other things, violations of
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
(“ESG”) 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 assess
the compliance risk of the business
partner; and
the dedicated independent Group-wide
compliance function has reporting lines
independent of business units. The 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 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 continuous, clear and explicit
support to the compliance programme.
2. Policies and Procedures
The Group continuously implements
and 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,
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Keppel Corporation Limited
compliance policies and procedures
and applicable law by its senior
management (including directors)
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.
8. Mergers, Acquisitions and
Corporate Restructuring
The Group performs appropriate
compliance due diligence checks on
potential merger and acquisition
target entities.
Also, the Group applies its compliance
codes, policies and procedures for
adoption by newly acquired businesses
or entities, and conducts training for
new employees, senior management
(including directors), agents and
business partners.
.
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;
9. Monitoring and Developments
The Group conducts continuous
monitoring of its compliance
programme to enhance its
effectiveness in preventing and
detecting violations of its
compliance policies.
b. appropriate oversight of third
parties; and
Annual Assurance
The Board has received assurance:
from the CEOs and CFOs of each
of the Group’s business divisions
and the CEO and CFO of the
Company that, as of 31 December 2022,
the financial records of the Group
have been properly maintained and
the financial statements for the year
ended 31 December 2022 give a true
and fair view of the Group’s operations
and finances; and
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 2022, 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.
c. seeking reciprocal commitments
regarding ethical conduct from
third-parties, associates and
business partners.
a.
When necessary, the Group includes
in contracts with third-parties, agents
and business partners, anti-corruption
provisions, which may include
the following:
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 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 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.
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 2022,
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.
Annual Report 2022
103
Governance
Corporate Governance
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 achieve its business objectives. In this
regard, the Board also notes that no system
can provide absolute assurance against
the 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 2022, 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.
Shareholder Rights and Communication
with 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
balanced and understandable assessment
of the Company’s and Group’s performance,
position and prospects, including interim
and other price sensitive public reports,
and reports to regulators (if required).
The Board has embraced openness and
transparency in the conduct of the Company’s
affairs, whilst preserving the commercial
interests of the Company. Financial reports
and other price sensitive information
are disseminated to shareholders through
announcements via SGXNet, media
releases, the Company’s website, public
webcasts and media and analyst briefings.
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Keppel Corporation Limited
Engagement with stakeholders takes many forms, including live webcasts of financial results briefings (pictured).
The Company’s Annual Report is accessible
on the Company’s website, and can be
viewed at or downloaded from https://www.
kepcorp.com/en/investors/annual-reports/.
Shareholders are encouraged to read the
Annual Report on the Company’s website,
but may also request for a physical copy
at no cost.
The Company adopts a comprehensive
stakeholder engagement approach,
whereby stakeholders are defined to
be individuals, groups of individuals or
organisations that affect and/or could be
affected by Keppel’s activities, products
or services and 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
Company’s materiality assessments are
based on the SGX guidelines on Sustainability
Reporting, as well as the Global Reporting
Initiative’s (“GRI”) guidance on the approach
to determine material topics. 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 would substantively
influence the assessments and decisions
of stakeholders.
The Company has identified and
prioritised its material ESG issues.
An overview of the Company’s approach
to sustainability management can
be found on page 32 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.
available on its website on the same
day they are released on SGXNet, while
transcripts of the question-and-answer
sessions held during the webcasts or
media and analyst briefings are also
released on SGXNet and posted on the
Company’s website.
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 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 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
https://www.kepcorp.com/en/investors/
investor-relations-policy/, 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 effectively engage the investment
community and other stakeholders,
with an emphasis on timely, accurate, fair
and transparent disclosure of information.
Engagement with stakeholders takes many
forms, including live webcasts of financial
results briefings, email communications,
publications and content on the Company’s
corporate website, as well as through facility
visits, where shareholders may raise any
queries or concerns that they may have.
Presentation materials of the Company’s
half-yearly financial statements and
voluntary business updates are made
The Company’s mobile-friendly website is
regularly updated with the latest information.
These include company announcements,
half-yearly results and voluntary business
updates, annual reports, investor
events, stock and dividend information,
investor presentation slides, as well as
information on general meetings, including
presentations and minutes. Contact
details of the Investor Relations personnel
(email: investor.relations@kepcorp.com)
are also set out on the website to facilitate
any queries from investors. In addition to
shareholder meetings, senior 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 2022,
the Company held about 175 in-person
and virtual meetings with institutional
investors from Singapore, Hong Kong,
Japan, the UK, the US, and other countries.
The management also travelled for non-deal
roadshows in London and New York,
and participated in a virtual investment
conference organised by CITIC CLSA.
The Company also hosted an investor
tour of the Keppel Marina East Desalination
Plant in Singapore with Citigroup as well
as investor visits to the Group’s
overseas assets.
During the year, the Company engaged
the media, analysts and investors to
help the investment community better
understand Keppel’s performance,
strategy and progress towards achieving
its Vision 2030 goals. The Company
has, since 2017, been collaborating with
the Securities Investors Association
(Singapore) (“SIAS”) to hold briefings for
retail shareholders. In 2022, the Company
held its annual briefing on the Company’s
developments, as well as a dialogue session
with retail shareholders on the proposed
transaction involving the Asset Co transfer
and the proposed combination of KOM
and SCM, as well as the proposed
distribution in specie of SCM shares.
The two events, both of which were
hosted by SIAS, drew a total of close to
170 participants. All materials presented
on these occasions were also made
available on the SGXNet and the Company’s
website in a timely manner, to ensure fair
disclosure of information for the benefit of
all shareholders.
Annual Report 2022
105
Governance
Corporate Governance
Annual General Meeting and
Extraordinary General Meeting
In 2022, the Company held its AGM and an
EGM to seek shareholders’ approval for the
proposed combination of KOM and SCM
and the proposed distribution in specie of
SCM shares, by 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 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, the Company
implemented real-time electronic
communication for questions at the EGM,
and the Board addressed all key questions
raised. The notices of meetings and
documents relating to the businesses of
the general meetings (which included the
rules governing the AGM and EGM) were
circulated to shareholders by electronic
means via publication on SGXNet and the
Company’s website. Further, responses to
questions submitted by shareholders prior
to the meetings were uploaded to SGXNet
and the Company’s website prior to
the events and addressed at the
general meetings.
The COVID-19 (Temporary Measures)
will cease with effect from 1 July 2023.
The Company will hold a physical AGM
in respect of FY 2022 in line with the
Company’s practice 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 public transportation, ensuring that
shareholders have the opportunity to
participate effectively and vote at such
meetings. Shareholders are informed of the
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
allowed to appoint up to two proxies to 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
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Keppel Corporation Limited
provide custodial services, may appoint
more than two proxies. This will enable
indirect investors, including CPF investors,
to be appointed as proxies to participate
in the physical meetings. Such indirect
investors, where so appointed, will have
the same rights as direct investors to vote
at the physical meeting.
To ensure transparency, the Company
conducts electronic poll voting for
shareholders/proxies present at the physical
meeting for all the resolutions proposed
at the general meeting. Shareholders
are also informed of the rules, 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
be debated and decided upon, and vote on
the resolutions at general meetings. Each
distinct issue is proposed as a separate
resolution. Such resolutions include matters
of significance to shareholders such as,
where applicable, proposed amendments to
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 be proposed at the meeting
is set out in the notices to the meeting or
their accompanying appendices. However,
where the issues are interdependent
and linked so as to form one significant
proposal, the Company may propose
“bundled resolutions” and will set out the
reasons and material implication in the
notices to the meeting or its accompanying
appendices. A scrutineer will be appointed
to count and validate the votes cast at the
meetings. The total number of votes cast for
or against the resolutions and the respective
percentages are also announced in a timely
manner after the general meeting via SGXNet.
Each share is entitled to one vote.
Where possible, all directors will attend
the general meetings of the Company.
The chairmen of the 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 necessary.
The Constitution allows for absentia
voting at general meetings. However,
the Company is not implementing
absentia voting methods such as voting
via mail, email or fax for security, integrity
and related considerations.
The Company Secretaries prepare minutes
of general meetings, which incorporate
substantial and relevant comments or
queries from shareholders relating to the
agenda of the meeting and responses from
the Board and management. These minutes
are available to shareholders upon their
requests. All minutes of general meetings
will be published on the Company’s website
as soon as practicable. Minutes of the
AGM and EGM held in 2022 were published
on both the Company’s website and
SGXNet within one month from the meeting.
The Company is committed to rewarding
shareholders fairly and sustainably, while
balancing the payment of dividends with
its 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 track record for
distributing about 50 to 60% of its annual net
profit as dividends. Any payment of interim
dividend or, upon receipt of shareholders’
approval at AGMs, final dividend, will be paid
to all shareholders in an equitable and timely
manner. For FY 2022, the Company will be
paying out a total cash dividend of 33 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 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
Manual, the Company and its officers should
not deal in the Company’s securities during
the period commencing two weeks before
the announcement of the Company’s
financial statements for each of the first
three quarters of its financial year and one
month before the announcement of the
Company’s full year financial statements
(if the Company announces its quarterly
financial statements), or one month before
the announcement of the Company’s half
year and full year financial statements
(if the Company does not announce
its quarterly financial statements)
(the “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 are in possession of unpublished
price-sensitive information. Directors and
the CEO are also required to report their
dealings in the Company’s securities within
two business days.
Board Sustainability and
Safety Committee
In May 2022, the Board established the
Board Sustainability and Safety Committee
(“BSSC”) to sharpen the Group’s focus on
sustainability. The role of the former Board
Safety Committee has been subsumed
under the terms of reference of the BSSC.
The BSSC comprises both independent
and non-independent directors, namely:
• Mr Teo Siong Seng
Non-independent and
Non-executive Chairman
• Mr Danny Teoh
Independent Member
• Mr Olivier Blum
(from 1 May 2022)
Independent Member
• Mr Loh Chin Hua
Non-independent Member
The BSSC’s roles include reviewing the
Company’s sustainability strategy and its
integration with commercial objectives,
ensuring that the Company has in place
effective sustainability and safety governance
structures, as well as overseeing the adoption
of and progress towards the Company’s
sustainability and health, safety and
environment (“HSE”) goals. The BSSC also
monitors international sustainability-related
trends and developments, and reviews
the processes for identifying, assessing
and managing climate-related risks and
opportunities. In addition, the BSSC plays a
pro-active role in reviewing material changes
in the Company’s HSE risk profile, and
oversees the management of significant
HSE risks and strategic plans, such as
Keppel’s Zero Fatality Strategy as well as
the digital transformation of HSE processes.
The BSSC meets at least four times a year.
It considers management’s reports and
proposals, and reports to the Board on
material sustainability and safety issues, as
well as its findings and recommendations,
where relevant.
In 2022, sustainability issues deliberated
by the BSSC included the Company’s
sustainability roadmap and key work plans,
the review of the Company’s material ESG
factors, as well as the assessment of
climate-related risks and opportunities
faced by the Company, in line with the
recommendations of the Task Force on
Climate-related Financial Disclosures.
In addition to meetings, the BSSC makes
regular site visits to better understand the
issues faced by business units, and also
strengthen the Company’s safety culture
and commitment to sustainability through
demonstrating visible leadership. The site
visits allow the BSSC to interact directly
with the Group’s contractors, suppliers,
and workers, thus gaining deeper insights
into the Group’s sustainability and safety
performance. In 2022, the BSSC visited
Keppel Land’s 19 Nassim project site,
as well as the construction site of Keppel
Data Centre Singapore 7 (KDC SGP 7) at
Genting Lane.
The detailed terms of reference of the BSSC
are disclosed on page 110 herein.
The BSSC makes regular site visits to better understand the issues faced by business units, and also strengthen the
Company’s safety culture and commitment to sustainability.
Annual Report 2022
107
Governance
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 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 be carried
out internally or with the assistance of
any competent third parties).
a. Review the Board’s comment on
the adequacy and effectiveness of
the Group’s internal control systems,
and risk management 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.
1.3 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.
1.4
Internal and External Audit
a. Review the adequacy, effectiveness
and independence, scope and
results of the internal and external
audit function, at least annually
and report the Audit Committee’s
assessment to the Board.
b. Ensure that the Head of Internal
Audit and external auditors have
direct and unrestricted access to the
chairman of the Audit Committee,
and that they are able to meet
separately and privately to discuss
matters and concerns.
c. Monitor and assess the role and
effectiveness of the internal audit
function, including the internal audit
charter, plans, activities (including
consulting services), staffing budget,
resources and organisational
structure of the internal audit function.
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Keppel Corporation Limited
d. Ensure that the internal audit
1.9 Report to the Board on:
function is adequately resourced
and staffed with persons with
the relevant qualifications and
experience, and has appropriate
standing within the Company.
e. Review audit plans and reports of
the external auditors and internal
auditors on a periodic basis and
management’s responsiveness to
the findings and recommendations
and effectiveness of actions taken.
f. Ensure that a Quality Assurance
Review on internal audit function
is independently conducted at
least once every five years.
g. Decide and approve 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.
h. 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.
i. Review the nature and extent of
non-audit services performed by
the external auditors, to ensure
their independence and objectivity.
1.5 Oversee the establishment and
operation of the whistle-blowing
process. Review 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.
1.6 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.
1.7
Investigate any matters within the
Audit Committee’s purview, whenever
it deems necessary.
1.8 Perform such other functions as the
Board may determine.
a.
b.
c.
d.
the significant issues and
judgments that the Audit
Committee considered in relation
to the financial statements, and
how these issues were addressed;
the Audit Committee’s assessment
of the adequacy and effectiveness
of internal control and risk
management systems that relate
to financial reporting and other
financial-related risks and controls,
and any material matters, findings
and recommendations;
the Audit Committee’s assessment
of the adequacy, effectiveness
and independence of the internal
audit function;
the Audit Committee’s assessment
of the independence and objectivity
of the external auditors, taking into
consideration the aggregate and
respective fees paid for audit and
non-audit services;
e.
the Audit Committee’s assessment
of the quality of the work carried
out by the external auditors, and
the basis of such assessment; and
f.
the significant matters raised
through the whistle-blowing channel.
1.10 The Audit Committee shall ensure
proper disclosure and reporting to
shareholders on interested party
transactions as required by the
SGX Listing Manual.
1.11 The Audit Committee shall make
whatever recommendations to the
Board it deems appropriate on any
area within its remit where action or
improvement is needed.
1.12 The Audit Committee shall produce
a report on its activities to be included
in the Company’s annual report.
The report should also disclose the
measures taken by the Committee
members to keep abreast of changes
to accounting standards and issues
which have a direct impact on financial
statements; and an explanation of
how the prospects of the Group have
been assessed, over what period it
has done so, and why the Board
should consider it to be appropriate
to use that period.
1.13 Review the Audit Committee’s terms
of reference annually and recommend
any proposed changes to the Board
for approval.
B. Board Risk Committee
1.1 Obtain recommendations on risk
tolerance and strategy from Management,
and where appropriate, report and
recommend to the Board for its
determination the nature and extent of
significant risks which the Group overall
may take in achieving its strategic
objectives and the overall Group’s levels
of risk tolerance, risk parameters and
risk policies.
1.2 Review and discuss, as and when
appropriate, with Management the
Group’s risk governance structure and
framework including risk policies, risk
strategy, risk culture, risk assessment,
risk mitigation and monitoring
processes and procedures.
1.3 Review the Information Technology (IT)
governance and cybersecurity framework
to ascertain alignment with business
strategy and Group risk tolerance
including monitoring the adequacy
of IT capability and capacity to ensure
business objectives are well-supported
with adequate measures to safeguard
corporate information, operating assets,
and effectively monitor the performance,
quality and integrity of IT service delivery.
1.4 Receive and review quarterly reports from
Management on the Group’s risk profile
and major risk exposures, and the steps
taken to monitor, control and mitigate
such risks, to ensure that such risks are
managed within acceptable levels.
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 relevant laws,
regulations and best practices.
1.7 Through interactions with the
Head of Group Risk and Compliance,
review and oversee performance
of the Group’s implementation of
compliance programmes.
1.10 Review and monitor Management’s
responsiveness to the risks, matters
identified and recommendations of the
Group Risk and 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
respect of strategic transactions and
new risk focused products, focusing,
in particular, on the risk and compliance
aspects and implications of the proposed
action for the risk tolerance of the Group,
and make recommendations to the 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 the
adequacy and effectiveness of the
Group’s risk management systems
and state whether it concurs with
the 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
and Compliance function have direct
and unrestricted access to the
chairman of the Committee.
1.17 Perform such other functions as the
Board may determine.
1.18 Review the Committee’s terms of
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.
1.8 Review and monitor the Group’s approach
to ensuring compliance with regulatory
commitments, including progress of
remedial actions where applicable.
C. Nominating Committee
1.1 Recommend to the Board the appointment
and re-appointment of directors
(including alternate directors, if any).
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.
1.2 Annual review of the structure and size
of the Board and Board Committees, and
the balance and mix of skills, knowledge,
experience, and other aspects of
diversity such as 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
each director, and to ensure that the Board
comprises (a) majority non-executive
directors, and (b) at least one-third,
or (if Chairman is not 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.
1.8 Review the succession plans for the 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
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 2022
109
Governance
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
Board may determine.
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.
1.15 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 not overly generous.
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.
E. Board Sustainability and
Safety Committee
Sustainability
1.1 Review the Company’s sustainability
strategy, with reference to industry peers
and expectations, to ensure that they
are relevant to evolving local and global
sustainability trends and developments.
1.2 Ensure that the Group has in place
an effective governance structure for
sustainability matters.
1.3 Consider whether directors should be
1.3 Review annually the reasons for and
eligible for benefits under long-term
incentive schemes (including weighing the
use of share schemes against the other
types of long-term incentive scheme).
1.4 Review the ongoing appropriateness
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.
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,
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.
1.6 Set performance measures
and determine targets for any
performance-related pay schemes.
1.7 Administer the Company’s Restricted
the process of selecting the ESG factors
identified to be material to the Group’s
business, taking into account the
prevailing business strategy, market
conditions and stakeholder concerns.
1.4 Review annually the processes for
identifying, assessing, and managing
climate-related risks and opportunities
across the 4 pillars of governance,
strategy, risk management, and metrics
and targets, and related reporting aligned
with the Taskforce on Climate-related
Financial Disclosures.
1.5 Oversee the adoption of the Company’s
sustainability goals and targets, as well
as management’s plans and progress
towards achieving the goals and targets.
1.6 Consider management’s proposals
and recommendations on sustainability
related policies and practices and
make recommendations to the Board
where relevant.
1.7 Monitor the Group’s performance against
previously disclosed targets in relation
to identified material ESG factors.
of key sustainability issues and impacts
with the Company’s broader business
and sustainability strategy.
1.9 Monitor international sustainability-
related trends and developments
and consider the implications on the
Company’s sustainability strategy.
1.10 Review stakeholder engagement plan(s)
to ensure that stakeholders’ concerns are
meaningfully captured and addressed.
1.11 Review and approve the independent
assurance and audit process, and
assess annually the adequacy and
effectiveness of the process.
1.12 Review the Group’s diversity and
inclusion management.
1.13 Review the Company’s sustainability
reporting and sustainability-related
disclosures.
Safety
1.14 Review the policies, practices and
performance of the Group relating to
safety, including in particular the safe
condition and responsible operation of
the Group’s assets and business, as well
as employee health and well-being.
1.15 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.
1.16 Monitor HSE performance of the Group
and the BUs, 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.
1.17 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.
1.18 Structure an audit programme of the
Group’s 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.
1.19 Ensure a process is in place to have
fatalities and other major incidents
investigated by an independent and
competent team.
Share Plan and Performance Share Plan
(collectively, the “KCL Share Plans”),
in accordance with the rules of the KCL
Share Plans.
1.8 Monitor the integration of the
Company’s sustainability strategy into
the Company’s general commercial
objectives and align the management
1.20 Review any major incident that impact,
or has the potential to impact, the
Group’s safety, environmental and
social performance.
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Keppel Corporation Limited
Nature of Directors’ Appointments and Membership on Board Committees
The Board currently has 11 members, the majority of whom are non-executive and independent and each board committee (except for Board Sustainability
and Safety Committee) comprise at least three members, a majority of whom (including the chairman) are non-executive and independent. The current
composition of the Board Committees are as follows:
Director
Audit Committee
Nominating Committee
Remuneration Committee
Board Risk Committee
Board Sustainability
and 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
Olivier Blum
Independent Director
Jimmy Ng
Independent Director
–
–
–
Member
Member
–
–
Member
Chairman
–
–
–
Member
–
–
Chairman
–
–
Chairman
Member
Member
–
–
Chairman
Member
–
–
–
–
–
–
–
–
Member
–
–
–
Member
Member
–
–
–
Chairman
–
–
–
–
–
Member
Member
Member
–
Member
Member
–
Board Assessment
Evaluation Processes for FY 2022
Each Board member was required to
complete evaluation questionnaires on the
performance of the Board, board committees
and individual directors (including the
Board Chairman). Egon Zehnder conducted
one-on-one interviews with each director.
Based on the feedback, Egon Zehnder
prepared a consolidated report and briefed
the NC chairman and the Board Chairman
on the report. Thereafter, Egon Zehnder and
the NC chairman presented the report to the
Board for discussion on the changes which
should be made to help the Board discharge
its duties more effectively. Thereafter and
where necessary, the NC chairman will in
consultation with the Board Chairman meet
with directors individually to provide feedback
on their respective board performance with
a view to improving their board performance
and shareholder value.
Performance Criteria
The performance criteria for the Board were
in respect of the board size, board and board
committee composition, board independence,
board processes, board information and
accountability, standards of conduct,
board performance in relation to discharging
its principal functions and ensuring the
integrity and quality of financial reporting
to stakeholders.
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 analyse, communicate
and contribute to the productivity of
meetings, and his/her understanding
of finance and accounts, are taken
into consideration); (3) director’s duties
(under which factors as to the director’s
board committee work contribution,
whether the director takes his/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 2022
111
Governance
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 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 theft or misuse of resources within
the Group;
fraudulent;
b.
c. corrupt;
d.
e. other serious improper conduct;
f. an unsafe work practice; or
g. any other conduct which may cause
illegal;
financial or non-financial loss to 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 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. He reports directly to the
AC chairman.
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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, Germany, India,
Netherlands and Malaysia. 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 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 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 determine) assists the AC
chairman with overseeing the investigation
process and any matters arising therefrom.
The Receiving Officer, in consultation
with 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 chairman upon
the conclusion of the investigation into any
Reportable Conduct. The AC chairman
(whether in the exercise of his own discretion
or in consultation with the AC) shall
determine the adequacy of corrective or
remedial actions proposed (if any). Identities
of Whistle-Blowers, participants of 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 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 Receiving
Officer (who shall refer the matter to the
AC chairman) or directly to the AC chairman.
The AC chairman shall review the 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 annual general meeting to be held in 2022 is set out below.
Name of Director
Danny Teoh
Till Vestring
Veronica Eng
1 October 2010
16 February 2015
1 July 2015
Olivier Blum
1 May 2022
Jimmy Ng
1 May 2022
2 June 2020
2 June 2020
2 June 2020
N.A.
Age
67
59
69
Singapore
Singapore
Singapore
52
France
N.A.
58
Singapore
The process for the re-nomination of director to the Board, is set out in page 87 of this Annual Report
Non-executive
Non-executive
Non-executive
Non-executive
Non-executive
Chairman; Non-Executive
and Non-Independent
Director; Nominating
Committee (Member);
Remuneration
Committee (Member);
Board Sustainability and
Safety Committee
(Member)
Associate member
of the Institute of
Chartered Accountants
in England & Wales
Non-Executive and Lead
Independent Director;
Remuneration
Committee (Chairman);
Nominating Committee
(Member)
Non-Executive and
Independent Director;
Board Risk Committee
(Chairman);
Audit Committee
(Member)
Non-Executive and
Independent Director;
Board Sustainability and
Safety Committee
(Member)
Non-Executive and
Independent Director;
Board Risk Committee
(Member)
Master of Economics,
University of Bonn,
Germany;
Master of Business
Administration, Haas
School of Business,
University of California,
Berkeley
Bachelor of Business
Administration
(First Class Honours),
University of Singapore
Master Business
Administration and
General Management,
Grenoble Business
School (GEM), France
Bachelor of Science
Degree in Information
Systems, National
University of Singapore;
Masters in Business
Administration,
Nanyang Technological
University
Date of
Appointment
Date of last
re-appointment
(if applicable)
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
Working experience
and occupation(s)
during the past
10 years
Managing Partner,
KPMG LLP, Singapore
(2005 to 2010)
Advisory Partner, Bain &
Company Southeast
Asia
Founding Partner of
Permira (1985 to 2015)
and Professor
(Practice), NUS
Business School
Executive Vice
President, Energy
Management Business,
Schneider Electric,
Hong Kong – Present
Group Chief Information
Officer and Head of
Technology &
Operations, DBS Bank
– 2019 to present
Trainer – SMU Financial
Training Institute –
2009 to present
Deputy Head of
Technology &
Operations, DBS Bank
– 2018 to 2019
Group Head Audit, DBS
– 2012 to 2017
Managing Director,
Head Consumer
Banking Operations –
2009 to 2012
Chief Strategy &
Sustainability Officer,
Schneider Electric,
Hong Kong – 2020 to
2022
Chief Human Resources
Officer, Schneider
Electric, Hong Kong –
2014 to 2022
Executive Vice
President (Global),
Home & Distribution
Division, Schneider
Electric, Hong Kong –
2013 to 2020
Regional Managing
Director, Schneider
Electric, India – 2008 to
2013
Annual Report 2022
113
Governance
Corporate Governance
Name of Director
Danny Teoh
Till Vestring
Veronica Eng
Olivier Blum
Jimmy Ng
Shareholding interest
in the listed issuer and
its subsidiaries
129,825 (direct interest)
in Keppel Corporation
Limited
103,000 (direct interest)
in Keppel Corporation
Limited
56,000 (direct interest)
in Keppel Corporation
Limited
Nil
28,600 (direct interest)
in Keppel DC REIT
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)
8,911 (direct interest)
in Keppel REIT
No
No
No
No
No
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
Inchcape plc; Singapore
Chinese Orchestra
Company Limited
Nil
Nil
Nil
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
Other Principal
Commitments including
Directorships – Present
Nil
Leap Philanthrophy Ltd;
Advanced Micro Foundry
Pte. Ltd.; Delaware
Consulting International
CVBA; Keppel
Telecommunications
& Transportation Ltd;
Advisory Partner, Bain &
Company Southeast Asia
Keppel Capital Holdings
Pte. Ltd.; Eastspring
Investments Group
Pte. Ltd.; Professor
(Practice), NUS
Business School
Delta Dore, France;
Aveva Group PLC,
United Kingdom;
Luminous Power
Technologies (P) Ltd,
India (Chairman)
Singapore Clearing
House Pte Ltd;
Evolve Digitech Pte Ltd,
Steering Committee of
Asian Institute of
Digital Finance
(Committee Member)
114
Keppel Corporation Limited
Name of Director
Danny Teoh
Till Vestring
Veronica Eng
Olivier Blum
Jimmy Ng
No
No
No
No
No
No
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,
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,
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
No
No
No
No
No
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?
g. Whether he has ever been convicted
in Singapore or elsewhere of any
offence in connection with the formation
or management of any entity or
business trust?
No
h. Whether he has ever been disqualified
No
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
No
No
No
No
No
No
No
i. Whether he has ever been the subject of
No
No
No
No
No
any order, 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?
Annual Report 2022
115
Governance
Corporate Governance
Name of Director
Danny Teoh
Till Vestring
Veronica Eng
Olivier Blum
Jimmy Ng
No
No
No
No
No
No
No
No
Nil
No
No
No
No
No
No
No
No
Nil
Mr Blum will
be completing
the Listed
Entity Directors’
programme
organised by the
Singapore Institute
of Directors in 2023
Mr Ng has
completed
the Listed
Entity Directors’
programme
organised by the
Singapore Institute
of Directors
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Yes
Yes
Yes
Inchcape plc
Ms Eng has been
a director on
the Board of
the Company
since 2015
DBS Group
Holdings Limited;
DBS Bank Ltd;
M1 Limited;
CapitaMall Trust
Management
Limited
(as manager of
CapitaMall Trust)
N.A.
N.A.
N.A.
j. Whether he has ever, to his knowledge,
been concerned with the management
or conduct, in Singapore or elsewhere,
of the affairs of:
No
i. any corporation which has been
No
No
No
No
No
No
investigated for a 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
iii. any business trust which has been
investigated 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 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?
k. Whether he has been the subject of any
current or 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?
If yes, please provide details of prior
experience.
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).
116
Keppel Corporation Limited
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
Board Matters
The Board’s Conduct of Affairs
Principle 1
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 Reference in this Report
Principles
Page Reference in this Report
Pages 118 to 121
Page 103
Pages 98, 99 and 108
Page 98
Page 98
Page 98
Page 98
Pages 104 to 106
Pages 104 to 106
Pages 85 and 104 to 106
Page 106
Page 106
Page 106
Pages 104 to 106
Page 105
Page 105
Page 105
Page 104
Page 105
Page 84
Page 86
Page 84
Pages 86 to 103 and 108 to 110
Pages 85 and 91
Page 86
Pages 85 and 86
Pages 90 and 91
Pages 90 and 91
Pages 90 and 91
Pages 87 to 89
Page 85
Pages 82 and 83
Pages 82 and 83
Page 82
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
Pages 86 to 91 and 109 to 110
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
Page 86
Page 86
Pages 90 and 91
Pages 86, 91 and 92
Page 92
Page 111
Pages 92 and 110
Page 92
Pages 92 and 110
Page 92
Pages 92 to 97
Pages 92 to 97
Pages 92 to 97
Pages 92 to 97
Page 98
Pages 92 to 97
Annual Report 2022
117
Governance
Risk Management
We undertake only appropriate and
well-considered risks, taking into
account the impact to our business,
stakeholders, and long-term
corporate sustainability.
Keppel adopts a balanced approach
to risk management to optimise
returns while considering their impact
on corporate sustainability. Managing
risks effectively 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 risk-reward methodology is
the optimal approach. This applies to all
aspects of our business, and particularly,
our commitment to environmental,
social and governance issues and our
commitment to deliver long-term value
to our stakeholders.
Our Risk-Centric Culture and Enterprise
Risk Management (ERM) Framework
enables the Group to respond to the
dynamic economic environment, evolving
business demands, as well as to seize
new business 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 formulating and
implementing the risk management
framework, policies and guidelines.
The terms of reference for the BRC
are disclosed on page 109 of this report.
The Board has set out three risk tolerance
guiding principles to determine the nature
and extent of material risks which the Board
is prepared to take in achieving the Group’s
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.
determine the adequacy and effectiveness
of the Group’s risk management system.
Along with our shifting business landscapes,
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 the Singapore Institute
of Directors.
Keppel’s risk governance framework, set
out on pages 99 to 104 under Principle 9
(Risk Management and Internal Controls),
allows the Board and management to
Management and risk teams across
BUs closely drive and coordinate
Group-wide activities and initiatives
under the ERM framework. These are
Transparency &
Competency
We promote transparency
in information sharing
and escalation of
risk-related matters,
incidents, near-misses
or events of interest.
Risk identification
and assessment are
embedded in key control
processes and Group-wide
surveys are conducted
periodically to assess
risk awareness amongst
employees.
Training & Communications
Training and communications support
competency across all employees and
occur through various forums, in-house
publications and sharing of lessons learnt.
Risk management is regularly reinforced
as a discipline and developed through
awareness and practice.
Framework & Values
We are guided by the ERM
framework, core values,
mission and vision,
in managing risks.
Risk-Centric Culture
Leadership & Governance
Keppel’s Board and management are
fully committed to fostering a strong
risk-centric culture and consistently
partake in reviewing risks in all areas
of business. Key messages encouraging
prudent risk-taking in decision-making
and 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 our risk
processes which emphasise
having clear owners for major
risk areas.
Process & Methods
An integral aspect of
strategic and operational
decision-making includes
considering and managing
risks at all levels of business.
A key part of the process
is the identification and
assessment of risks using
the five-step method:
(1) identifying;
(2) assessing;
(3) mitigating;
(4) communicating; and
(5) monitoring.
Underlying the five-step
method is a detailed risk
definition and reporting
framework for risk
oversight by the Board
and management.
118
Keppel Corporation Limited
Figure 1
ERM Framework
Strategic
External environment
and execution of
business 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 controls
Emerging
Evolving or emerging
threats that
affect business
Opportunities
Potential areas
of competitive
advantage arising
from various risks
Incorporating Sustainability Risks and Material Issues
facilitated by regular meetings on
policies or standards, or to 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 industry developments and
best practices.
The key risks identified for FY 2022
encapsulate both existing business
activities and the transformation and
growth initiatives under Vision 2030.
We are committed to addressing these
risks in line with our philosophy of
undertaking only appropriate and
well-considered risks to optimise returns
in a balanced and holistic manner,
with an objective to deliver sustainable
long-term value to our stakeholders.
Strategic Risks
Market & Competition
The major drivers of the Group’s strategic
risk include market forces, evolving
competition, changing customer demands,
and disruptive technology. The Group is
also exposed to other external factors like
volatility in the global economy such as
rising interest rates, inflation and volatility
in global markets, and geopolitical tensions.
Despite the many challenges faced by our
businesses, the Group has adapted and
continued to operate resiliently in 2022.
We had proactively taken mitigating actions
to adjust and adapt our strategies and
responses. During the year, the Board
and management stayed focused on the
execution of Vision 2030. As the Group
evolves to become a global asset manager
and operator creating solutions for a
sustainable future, we will continually
refine and enhance our risk management
framework to support our business
and objectives.
Strategic Ventures,
Investments & Divestments
The Group adopts a structured process for
evaluating investment and divestment
decisions, including strategic ventures.
These endeavours are monitored to ensure
alignment with the Group’s strategic intent,
investment objectives and desired returns.
Strategies are revised and updated, where
required, in response to the changing
business environment.
The Investment and Major Project
Action Committee works closely with
the Board to guide the Group in ensuring
that any such 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 or variables.
Key factors considered include the
project’s 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.
Climate Change
The Group’s climate change risk forms
part of the material environmental, social
and governance issues addressed by
the Board and management. The Group
supports the Task Force on Climate-related
Financial Disclosures and has worked
towards incorporating its recommendations
in our reporting framework.
Sustainability is at the core of the Group’s
strategy with climate change risk reviewed
and assessed within our ERM framework
(Figure 1). The ERM framework guides
the Group on the processes and methods
applied in identifying, assessing and
managing sustainability-related risks.
As part of climate change risk management,
we continually assess both physical
and transition risks for the Group
and strengthen our organisational
capabilities in response. In 2022,
the Group commenced a climate change
physical risk financial impact assessment
as well as a qualitative assessment of
climate-related transition risks. More
details will be provided in our Sustainability
Report 2022, which will be published in
May 2023.
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, and the
communities in which we operate. We value
Customer and Stakeholder Experience which
have a direct bearing on trust and brand
reputation. Hence, we consistently monitor
our products and services for safety, quality
and reliability. We continually review
feedback and post-sales support, and
commit ourselves to uphold personal data
privacy, product safety and related matters
including our responsiveness to inputs from
all stakeholders.
Human Resources
We place a strong emphasis on attracting
and developing a high-performing talent
pool. To drive our new engines of growth
under Vision 2030, we leverage both
internal and external programmes to
develop the necessary skillsets to enable
Keppel’s next phase of growth. This includes
nurturing employees, maintaining good
industrial relations and fostering conducive
work environment. We are committed to
strengthening succession planning and
bench strength, as well as building and
acquiring new organisational capabilities
in line with our strategic objectives, whilst
maintaining our status as an employer
of choice.
Annual Report 2022
119
Governance
Risk Management
We emphasise the importance of having
a risk-centric mindset, and developing
the ability to identify and assess risks,
implement mitigating actions, and
monitor residual risks in all employees.
Keppel Leadership Institute helps to
create this mindset by embedding risk
management in its leadership courses.
Operational Risks
Project Management
Risk management is an integral part of
all projects from initiation to completion
to facilitate early detection and proactive
management of operational risks.
We adopt a systematic risk assessment
and monitoring process with special
attention given to technically challenging
and high-value projects, including
greenfield developments, the deployment
of new technology and/or operations in
new geographies.
During project execution, regular reviews
are conducted along with 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 intervention is required.
We also conduct knowledge-sharing
workshops to share best practices or
lessons learnt across the Group. These
risk management processes help ensure
our project delivery is on time and within
budget, without compromising on safety
or quality, as well as regulatory and
contractual obligations.
Health, Safety & Environment
Safety is a Keppel core value and we
are committed to upholding the highest
standards of safety in all aspects of our
business operations. 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.
The Group continues to focus on and
emphasise the importance of staff
health and safety by implementing
appropriate processes and ensuring
adherence to industry standards,
regulations, or government guidelines
to protect employees or other stakeholders
from potential exposure to health or
safety hazards. Efforts are made across
BUs to ensure adherence to workplace
health and safety precautions, such as
the use of personal protective equipment
and safety risk assessments prior to
work commencing.
Keppel’s Zero Fatality Strategy aligns
High Impact Risk Activities standards
across our global operations. This is
achieved by enhancing the competency of
employees performing safety-critical tasks,
strengthening operational controls,
establishing Root Cause Analysis
investigation standards across the
Group, as well as deploying leading
risk indicators/metrices to monitor HSE
performance standards.
In 2022, Keppel won 11 Workplace Safety
and Health (WSH) Awards for exemplary
safety performance, implementation of
robust HSE management systems
and efforts to innovate solutions that
improve HSE. Unfortunately, three fatalities
occurred at a yard in Singapore. Keppel
has investigated the incidents and
implemented the necessary measures
to prevent recurrence.
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,
including protection of the environment
and biodiversity.
Business & Operational Processes
The Group is connected by common
shared services and platforms that
promote operating efficiency, while
enhancing productivity, compliance and
controls. Where relevant, 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.
Taking a risk-based approach, we seek to
improve digitalisation and automation in
enhancing or optimising our processes.
We also continually evaluate our procedures,
policies and authority limits to ensure that
they stay relevant.
Business Continuity
We are committed to Business Continuity
Management (BCM) standards that
equip us with the capability to respond
effectively to business disruptions.
We plan for contingencies in the event
of major catastrophes occurring in our
operating regions. This includes events
such as natural disasters, fire, pandemics,
terrorism and cyber-attacks, as well as the
failure of critical equipment/systems and
industrial accidents. We also continually
monitor other potentially disruptive threats
to our business operations and adapt our
plans to ensure operational resilience.
The Group’s Incident Reporting and Crisis
Management operating standard guides us
in the management of and response to
major incidents, 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 refine our capabilities in
responding to major incidents or crises with
the aim of safeguarding our people, assets,
and stakeholders’ interests, as well as
Keppel’s reputation.
We also recognise the significance of
cyber threats as a potential cause of
business disruption and maintain a
Group Cyber Incident Response plan,
which details our response and recovery
protocols in the event of a cyber incident.
The plan takes reference from local and
international standards and Cyber Tabletop
Exercises are conducted regularly to validate
the effectiveness of these protocols.
Cyber Security, Data Protection
and Technology
Technology, cyber security and data-related
risks, including outsourced services, are a part
of the Group’s operational risks. We recognise
the criticality of global cyber threats and
have established technology and cyber
governance structures and frameworks
to address both general technology and
cyber security controls, covering key areas
such as business disruption, theft/loss of
confidential data and data integrity.
The Group continually monitors its
technology and cyber security related
risks. The work involves the identification,
assessment and management of risks
within critical technology and data assets,
applying leading industry guidelines
where relevant, for example such as those
by the Cyber Security Agency of Singapore.
The Group also seeks to improve technology
and cyber security standards and inculcate a
culture of cyber awareness among employees.
In 2022, Keppel Telecommunications &
Transportation (KTT) discovered that an
unidentified hacker (or hacker group) had
accessed a server previously owned and
used by KTT on which some old KTT files
were stored. The incident was limited
to data stored on the previously owned
server and there has been no compromise
of any of the IT systems of KTT and the
data on KTT’s IT systems remain secure.
Immediate steps were taken to contain the
incident and stop any further intrusions.
In 2022, the Group made progress on
various initiatives to strengthen our
technology and cyber security governance
and controls through the refinement and
alignment of our policies, processes
and systems, as well as the consolidation
of systems and servers. Training and
assessment exercises were conducted
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Keppel Corporation Limited
Proactive Management of Risks
Effective risk management is dynamic and
encompasses the evaluation of both risks
and opportunities. We recognise the need to
effectively manage risks as an inherent part
of business operations to optimise returns.
We take a business-centric approach to
managing risks and aligning business
activities with risk considerations, and
discuss issues in an open and transparent
manner, to enable us to pursue optimal
risk-return initiatives.
Our risk framework and processes
continually evolve to ensure that they stay
effective and relevant. This is dependent
on our people and processes, and the
Group’s ability to remain vigilant to emerging
risks and opportunities. Across the Group,
we identify and review emerging risks at all
levels throughout the year. Where relevant,
these are escalated and discussed at
various forums to determine any further
actions and/or responses. We recognise
that our systems and processes provide
reasonable but not absolute assurance,
and hence continuously look to adapt and
improve to ensure that our ability to manage
and respond to risks remains relevant
and effective.
throughout the year to heighten
employees’ overall awareness of
technology and cyber threats.
Relating to the integration and usage of
technology, technical teams and other
experts from across the Group enable us
to keep abreast of evolving technology.
Risk mitigation or responses are 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 thought
leaders and business veterans from
key industries relevant to Keppel, 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 26, 27,
44 and 45 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
regulatory compliance. We recognise that
non-compliance with any law or regulation
may have a detrimental effect to the Group
in multiple areas such as financial and
operational performance, or reputation.
As such, we regularly stay updated on
changes to laws and regulations to
assess any exposures or risks effectively
and expediently.
Significant regulatory 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, key risk areas include
situations where external agents are
appointed for business development.
We continually enhance our regulatory
compliance policies and procedures
to ensure that the Group maintains a
high level of compliance and ethical
standards in the way we conduct business.
We have zero tolerance for fraud, bribery,
corruption and any violation of laws
and regulations.
In 2022, we continued to refine our
regulatory compliance programme,
update processes, deepen employee
understanding, and ensure that
compliance awareness and principles are
well embedded 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 122 to 124 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 the financial statements and
adequacy of the internal control framework
supporting the statements. Where required,
we leverage the expertise of the external
auditors in the interpretation of financial
reporting standards and changes to existing
or new reporting requirements. We also
conduct regular training and education
programmes to enhance the capabilities of
our finance managers across the Group.
Our system of internal controls is outlined in
Keppel’s System of Management Controls
detailed in pages 100 to 101 of this report.
Financial Management
Financial risk management relates to the
Group’s ability to meet financial obligations
and mitigate credit, liquidity, currency and
interest rate risks. Details can be found on
pages 200 to 211 of this report. In these
areas, policies, processes and financial
authority limits are reviewed regularly to
ensure their adequacy in mitigating risks
and 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 our shareholders,
while maintaining a strong balance sheet
to seize new opportunities.
In 2022, as global economies continued
to face pressure from macroeconomic
challenges and global volatility, the Group
maintained a proactive approach to liquidity
management and performed stress tests to
assess its exposure to volatility in currency
and rising interest rates, with mitigating
actions taken where required.
Our financial management 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 are
diversified against the systemic risks of
operating in a specific geography.
Annual Report 2022
121
Governance
Regulatory Compliance
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 the Group. We do not tolerate fraud,
bribery, corruption or any violation of laws
and regulations.
Strategic Objectives
In 2022, we continued to make significant
progress in embedding a robust compliance
framework and process throughout
the Group. We continued to implement
ISO 37001 Anti-Bribery Management
System across major business units (BUs)
to ensure consistency and operational
effectiveness of the compliance programme.
During the year, overseas entities comprising
Keppel Land India, Keppel Infrastructure
Belgium and Qatar, as well as additional
Singapore entities of Keppel Infrastructure
achieved ISO 37001 certification.
Our compliance framework is designed to
reflect the size, role and activity of each BU,
with appropriate compliance control systems
to effectively detect and remediate potential
gaps. We are committed to forging a
sustainable compliance framework that
supports the Group’s growth and vision.
Governance Structure
Our Regulatory Compliance Governance
Structure is designed to strengthen
corporate governance. The Board Risk
Committee (BRC) supports the Board in
its oversight of regulatory compliance
and is responsible for driving the Group’s
implementation of compliance and
governance systems. Group Risk &
Compliance serves as a secretariat to
the BRC, assessing and reporting on
compliance risks, controls and mitigation.
The Group Regulatory Compliance
Management Committee (Group RCMC)
Compliance
Resources
Culture
Compliance,
Risk Assessment,
Review & Monitoring
Regulatory
Compliance
Framework
Policies &
Procedures
Key Compliance
Processes
Training &
Communications
is chaired by Keppel Corporation’s CEO
and its members include all BU heads.
The Group RCMC articulates the Group’s
commitment to regulatory compliance, and
directs and supports the development and
implementation of overarching compliance
policies and guidelines.
The Group RCMC is supported by the
Group 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, overarching compliance policies
and guidelines for the Group. It also reviews
and 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 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 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; as well as compliance risk
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.
122
Keppel Corporation Limited
Similarly, the Compliance Leads of the BUs
have direct reporting lines to the respective
BUs’ 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 the Board and
management 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
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.
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
all key suppliers across the Group. The 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 99 of this report, are widely
communicated and made accessible.
Personal Data Privacy Act
Guidance is provided to employees on the
Personal Data Protection Commission’s
advisory guidelines to ensure that the
Group complies with the requirements of
the 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
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 periodically to ensure that they are
commensurate with the activities and
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 minimum
standards for the Group. We 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.
We have procedures to ensure that
disciplinary actions are carried out
consistently and fairly across all levels of
employees. All third parties who represent
Keppel in business dealings, including joint
venture (JV) partners, are also required to
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.
Annual Report 2022
123
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.
Governance
Regulatory Compliance
We have a comprehensive annual e-learning
training programme which is mandatory for
directors, officers and employees. The 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 successfully complete the
training. In 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 are also
focused on developing and tailoring training
content to varying target groups and training
requirements. On the annual e-learning training
programme, new e-training modules covering
Sanctions Compliance and Business Continuity
Management were introduced in 2022.
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 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
practices and tools.
We also leverage opportunities at various
management conferences and employee
meetings to emphasise the importance
of compliance.
To drive greater compliance awareness and
knowledge throughout the Group, we issue
a quarterly news bulletin on compliance, risk
and control matters. In 2022, we enhanced
the news bulletin, with a focus on topical risk
and compliance matters including sanctions,
anti-money laundering and phishing attacks,
together with a segment on lessons learnt,
to reinforce awareness and understanding
of ethics and compliance considerations
amongst employees.
Key Processes
Due Diligence
We continue to improve our risk-based due
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 addition
to background checks, the due diligence
process incorporates requirements for
TPAs to acknowledge understanding and
compliance with the Code. In 2022, the due
diligence process for the onboarding and
monitoring of TPAs was further enhanced
with the implementation of a system
platform and solution to standardise
and automate processes across the Group.
Other Processes
As part of our ongoing review of policies
and procedures, we ensure compliance
oversight is embedded in key processes
including areas such as gifts and hospitality,
agent fees, donations and sponsorships,
as 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.
In addition to the mandatory annual
declaration of conflict of interest by all
employees of Keppel Group, a Conflict of
Interest App was launched to facilitate the
conflict of interest review and conflict
resolution process.
The Russia-Ukraine conflict has led to
several sanctions and export control
measures imposed by governments
globally and we continue to remain
vigilant and monitor the impact to the
Group with action taken accordingly under
our sanctions framework.
Risk Assessment, Review & Monitoring
We continually develop Keppel’s compliance
resources and framework. This enables 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
aspects of our compliance programmes.
These reviews provide valuable insights
and 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.
124
Keppel Corporation Limited
Directors’ Statement and Financial Statements
Financial Report
Directors’ Statement
Independent Auditor’s Report
Balance Sheets
Consolidated Profit or 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
126
132
140
141
142
143
146
149
218
227
228
233
238
243
244
245
246
252
253
Annual Report 2022
125
Directors’ Statement
For the financial year ended 31 December 2022
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 2022.
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 140 to 226, 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 2022, 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
Olivier Pascal Marius Blum (appointed on 1 May 2022)
Jimmy Ng Hwee Kim (appointed on 1 May 2022)
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
The Audit Committee carried out its function in accordance with the Companies Act 1967, AC Guide issued by Singapore Institute of
Directors, Rule 1207(10) of the Listing Manual and Code of Corporate Governance, which include 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 systems 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 risk management
systems, and state whether it concurs with the Board’s comments; and if there are material weaknesses identified in the Group’s
internal controls systems, 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 on a periodic basis, and management’s
responsiveness to any findings and recommendations to the extent set out/identified, and effectiveness of actions taken;
Ensured that a Quality Assurance Review (QAR) on internal audit function is independently conducted at least once every five
years;
Reviewed the adequacy, effectiveness, independence, objectivity, scope and results of the external auditors and internal auditors
annually;
Reviewed the nature and extent of non-audit services performed by external auditors;
Met 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;
Monitored and assessed the role and effectiveness of the internal audit function, including the internal audit charter, plans,
activities (including consulting services), staffing, budget, resources and organisational structure of the internal audit function;
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;
Oversee the establishment and operation of the whistleblowing process. 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.
126
Keppel Corporation Limited
Financial Report
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.
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:
3.
4.
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)
Shirish Moreshwar Apte
(Unvested restricted shares to be delivered after 2019)
Loh Chin Hua
(Unvested restricted shares to be delivered after 2020)
Loh Chin Hua
(Unvested restricted shares to be delivered after 2021)
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 2023)1, 4
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 issued in 2022 to be
delivered after 2024)1
Loh Chin Hua
Holdings At
1.1.2022
or date of
appointment,
if later
31.12.2022
21.1.2023
104,825
129,825
129,825
2,135,826
2,949,667
2,949,667
38,500
96,000
47,000
116,000
162,570
37,000
7,000
21,483
-
38,500
103,000
56,000
123,000
170,570
44,000
14,000
21,483
3,000
38,500
103,000
56,000
123,000
170,570
44,000
14,000
21,483
3,000
100,629
-
-
173,914
86,958
86,958
-
264,650
264,650
320,000
-
-
365,000
365,000
365,000
365,000
365,000
365,000
365,000
365,000
365,000
-
400,000
400,000
Annual Report 2022
127
Directors’ Statement
4.
Directors’ interests in shares and debentures (continued)
Keppel Corporation Limited
(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
1.1.2022
or date of
appointment,
if later
31.12.2022
21.1.2023
750,000
-
-
970,000
970,000
970,000
1
2
3
4
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.
The performance period of the KCL PSP award 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 2021, 2022 and 2023 will be used to determine the vesting level of the award at the end of the extended
performance period.
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-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
17.2.20205
17.2.2020
Balance at
1.1.2022
1,180,000
1,542,847
1,449,033
4,171,880
3,314,617
1,752,089
1,100,000
6,166,706
127,900
295,600
423,500
Number of Shares
Contingent
awards
granted
Adjustment
upon
release
Released
Cancelled
(684,400)
(495,600)
-
-
-
-
-
(80,000)
(70,000)
(684,400)
(495,600)
(150,000)
Balance at
31.12.2022
-
1,462,847
1,379,033
2,841,880
(2,013,111)
(1,276,163)
(25,343)
(1,116,867)
(666,650)
(635,222)
(433,350)
-
-
(3,796,628)
(2,344,735)
(25,343)
-
-
-
-
-
-
-
-
-
-
(12,800)
(30,800)
(43,600)
115,100
264,800
379,900
-
-
-
-
-
-
-
-
-
-
-
5
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.
128
Keppel Corporation Limited
Financial Report
Date of Grant
KCL PSP 2020
30.4.2021
29.4.2022
KCL PSP 2020-TIP
30.7.2021
29.4.2022
Awards:
Date of Grant
KCL RSP 2020 - Deferred Shares
15.2.2022
Awards released but not vested:
Date of Grant
KCL PSP
30.4.2018
KCL PSP-TIP
29.4.2016
28.4.2017
28.2.2020
KCL RSP-Deferred shares
17.2.2020
KCL RSP 2020-Deferred Shares
15.2.2021
15.2.2022
Number of Shares
Contingent
awards
granted
Adjustment
upon
release
Released
Cancelled
Balance at
31.12.2022
Balance at
1.1.2022
1,490,000
-
1,490,000
-
1,775,000
1,775,000
11,140,000
-
11,140,000
-
840,000
840,000
-
-
-
-
-
-
-
-
-
-
-
-
(70,000)
(80,000)
(150,000)
1,420,000
1,695,000
3,115,000
(710,000)
10,430,000
(50,000)
790,000
(760,000)
11,220,000
Balance at
1.1.2022
Awards
granted
Adjustment
upon
release
Released
Cancelled
Balance at
31.12.2022
Number of Shares
-
-
6,317,893
6,317,893
(8,862)
(6,309,031)
(8,862)
(6,309,031)
-
-
-
-
Balance at
1.1.2022
Released
Vested
Cancelled
Other
adjustments
Balance at
31.12.2022
Number of Shares
-
-
-
-
-
-
495,600
495,600
(495,600)
(495,600)
1,276,163
(1,276,163)
635,222
433,350
(635,222)
(433,350)
2,344,735
(2,344,735)
-
-
-
-
-
-
1,576,649
1,576,649
3,231,494
-
3,231,494
-
-
-
6,309,031
6,309,031
(1,566,518)
(1,566,518)
(10,131)
(10,131)
(1,639,149)
(2,163,408)
(3,802,557)
(150,166)
(333,454)
(483,620)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,442,179
3,812,169
5,254,348
Annual Report 2022
129
Directors’ Statement
5.
Share plans of the Company (continued)
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:
Contingent
awards
granted since
Aggregate Aggregate other
adjustments
since
Aggregate
awards
released since
awards commencement commencement commencement
granted
of plans
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
400,000
765,000
-
-
970,000
-
-
-
765,000
970,000
awards
granted since
Aggregate Aggregate other
adjustments
since
Aggregate
awards
released since
Awards commencement commencement commencement
granted
of plans
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
KCL RSP-Deferred shares
Executive Director
Loh Chin Hua
KCL RSP 2020-Deferred Shares
Executive Director
Loh Chin Hua
- 836,642
- (836,642)
-
396,975
657,845
-
(657,845)
-
130
Keppel Corporation Limited
Financial Report
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
657,845
(306,237)
351,608
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, 2 March 2023
LOH CHIN HUA
Chief Executive Officer
Annual Report 2022
131
Independent Auditor’s Report
to the Members of Keppel Corporation Limited
For the financial year ended 31 December 2022
Report on the audit of the financial statements
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 of the Company are properly drawn up in accordance with the provisions of the Companies Act 1967 (“the Act”)
and 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 2022,
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 2022;
the consolidated profit or 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
the 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 judgements; 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 judgement, were of most significance in our audit of the financial statements for
the financial year ended 31 December 2022. 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.
132
Keppel Corporation Limited
Financial Report Key Audit Matter
How our audit addressed the Key Audit Matter
We reviewed management’s assessment of the recoverable
amount and the consideration of the likelihood and expected
financial impact of the various possible outcomes.
In the assessment of expected financial impact, we reviewed the
term sheet with Magni and correspondences with Sete and its
authorised representatives to validate the assumptions applied by
management. We also reviewed the expected recoverable amount
under the scenario that KOM would regain possession of the rigs,
complete the construction and charter them out. In addition, we
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 amount of the assets relating to
the Sete contracts to be reasonable, on the basis of the key
assumptions made by management.
In respect of the independent professional firm and the industry
expert, we found that they possessed the requisite competency
and experience to assist management in the assessment of the
valuations.
We noted management’s judgement that a combination of
reasonable change in the assumptions could eliminate the
headroom in the recoverable amount over the carrying amount.
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. Assessment of carrying amount of disposal group held
for sale
a. Contracts with Sete Brasil (“Sete”)
(Refer to Note 2.28 (b)(i)(a)(i) 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. Sete is to procure the release of the
mortgage on the two uncompleted rigs placed with the ship registry.
Management performed an assessment of the estimated recovery
of the two rigs which Magni had bidded to purchase from Sete.
Contract asset balances relating to these uncompleted rigs (net of
loss provision recognised in prior years) as at 31 December 2022
amounted to $158 million.
As at 31 December 2022, management estimated the net present
value of the cash flows relating to the construction contract for
these two rigs with Magni or another investor to replace Magni at
similar terms. In addition, management performed an assessment
to estimate the cost of discontinuance of related agreements
with Sete, as well as the possible option of repossessing the rigs,
complete the construction and charter out to extract value from
the uncompleted rigs. Arising from the assessment, management
concluded that loss provisions made in prior years were adequate.
The assessment is made with the following key assumptions,
taking into consideration the likelihood and expected financial
impact of the various possible outcomes:
• 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;
If Magni or another investor is unable to purchase the rigs
from Sete, KOM would regain possession of the rigs, complete
the construction and charter them out. The recoverable
amounts under this scenario are based on the Value-in-
use (“VIU”) of the rigs determined by management with the
assistance of independent professional firms; and
The future cost of construction of the rigs are not materially
different from management’s current estimation.
•
•
In addition to the independent professional firm responsible for
estimating the VIU based on the DCF model, management 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 included dayrates, cost assumptions, utilisation rates,
discount rates and estimated commencement of deployment of
the assets.
Management had considered that a combination of reasonable
change in the assumptions above could eliminate the headroom
in the recoverable amount over the carrying amount and hence did
not reverse previously recognised expected credit loss as at 31
December 2022.
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.
Annual Report 2022
133
Independent Auditor’s Report
to the Members of Keppel Corporation Limited
Key Audit Matter
How our audit addressed the Key Audit Matter
1. Assessment of carrying amount of disposal group held
for sale (continued)
b. Other contract assets and receivables, stocks and fixed
assets (uncompleted and completed rigs)
(Refer to Note 2.28(b)(i)(a)(ii), 2.28(b)(i)(b) and 2.28(b)(i)(c) to
the financial statements)
As at 31 December 2022, the Group has:
(i) 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 $572 million;
(ii) Trade receivables amounting to $378 million where the rigs
had been delivered but the receipt of construction revenue
deferred under certain financing arrangements;
(iii) Stocks under work-in-progress (“WIP”) amounting to $1,549
million; and
(iv) Fixed assets relating to rigs under bareboat charter contracts
of $1,458 million (after the reversal of previously recognised
impairment loss amounting to $293 million due to significant
improvement in the demand for these rigs at higher day rates
and that they are already on charter and in operation).
We focused on this area because significant judgment and
assumptions are required in:
(i) Estimating the expected credit loss of the contract assets and
trade receivables balance;
(ii) Estimating the NRV of the WIP balance; and
(iii) Estimating the recoverable amount of the fixed assets.
For the above contract assets and trade receivables, in the event
that the customers are unable to fulfil their contractual obligations,
management had 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. On this
basis, the value of the rigs delivered or under construction, the NRV
of the WIP balance and the recoverable amount of the fixed assets
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.
We reviewed management’s estimation of the expected credit
loss on contract assets on deferred delivery and trade receivables
under certain financing arrangements, estimation of NRV of the
WIP and estimation of the recoverable amount of the fixed assets
relating to rigs under bareboat charter contracts.
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 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.
On the reversal of impairment on the fixed assets of $293 million,
we reviewed management’s basis and corroborated to internal
and external information, including those provided by the industry
expert engaged by management.
Based on our procedures, we found management’s key
judgements and basis of estimation over the recovery of contract
assets on deferred delivery and trade receivables under certain
financing arrangements, NRV of the WIP and recoverable amount
of the fixed assets to be appropriate.
In respect of the independent professional firm and the industry
expert, 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.
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Financial Report
Key Audit Matter
How our audit addressed the Key Audit Matter
2. Revenue recognition based on measurement of progress
towards performance obligation
(Refer to Notes 2.28(b)(iii), 22 and 25 to the financial
statements)
During the financial year, the Group recognised $410 million
of revenue from continuing operations and $2,648 million of
revenue from discontinued operations 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.
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.
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.
When it is probable that the costs of a contract will exceed the
contract revenue, the expected loss is recognised as an expense
immediately. As at 31 December 2022, management assessed
that for some projects, total contract costs of each project would
exceed the total contract sum. Costs yet to be incurred for these
projects as at 31 December 2022 had been included in provision
for onerous contracts amounting to $54 million as presented
in Note 22 and $92 million relating to discontinued operation
presented within liabilities associated with disposal group held for
sale.
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.
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:
•
•
•
validated costs incurred by tracing to supplier invoices or sub-
contractor progress billings;
reviewed management’s estimates of cost-to-complete for
projects that were in-progress at the year end, 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, including
the consideration for the expectation of potential delays and
cost escalations; and
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 and the
estimation of total contract costs to be reasonable. We also found
the disclosures in the financial statements to be adequate.
Annual Report 2022
135
Independent Auditor’s Report
to the Members of Keppel Corporation Limited
Key Audit Matter
How our audit addressed the Key Audit Matter
3. Valuation of properties held for sale
(Refer to Notes 2.28(b)(viii) and 15 to the financial statements)
As at 31 December 2022, the Group has residential properties held
for sale of $2,235 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
valuers 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.
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Financial Report
Key Audit Matter
How our audit addressed the Key Audit Matter
4. Valuation of investment properties
(Refer to Notes 2.28(b)(vii), 8 and 35 to the financial
statements)
As at 31 December 2022, the Group owns a portfolio of investment
properties of $4,283 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 determined by
independent professional property valuers.
We evaluated the qualifications and competence of the
independent professional property valuers. We found that the
valuers engaged by management are members of recognised
professional bodies for professional property valuers and they
possessed the requisite competency and experience to assist
management in the assessment of the 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, independent professional property valuers for
certain investment properties had highlighted in their reports, 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.
5.
Impairment assessment of goodwill arising from acquisition
of subsidiary – M1 Limited (“M1”)
(Refer to Notes 2.28(b)(ii) and 14 to the financial statements)
In February 2019, the Group obtained controlling interest in M1 and
recognised a goodwill of $988 million upon the acquisition.
An annual impairment assessment has been performed on
the goodwill 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 2022 was
determined on a VIU basis using a DCF model.
The assessment of the VIU of M1 CGU as at 31 December
2022 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
estimated to be higher than the carrying value (including goodwill)
of the M1 CGU.
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
were considered by the valuers in determining the valuation of
investment properties. We also considered other alternative
valuation methods. 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 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. We found the disclosures in the
financial statements to be adequate.
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.
We checked whether the cash flow projections were based on
the approved business plan. We involved our valuation expert in
evaluating the valuation methodology, the long term growth rate
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 2022
137
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 the other sections of
the Keppel Corporation Limited Annual Report 2022 (“the 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 judgement and maintain professional scepticism 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 consolidated 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.
138
Keppel Corporation Limited
Financial Report
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, 2 March 2023
Annual Report 2022
139
Balance Sheets
As at 31 December 2022
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
Derivative assets
Contract 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
Disposal group and assets classified as held for sale
Current liabilities
Creditors
Derivative liabilities
Contract liabilities
Provisions
Amounts due to:
- subsidiaries
- associated companies and joint ventures
Term loans
Lease liabilities
Taxation
Liabilities directly associated with disposal group and
assets classified as held for sale
Net current assets
Non-current liabilities
Term loans
Lease liabilities
Deferred tax liabilities
Derivative liabilities
Other non-current liabilities
Net assets
The accompanying notes form an integral part of these financial statements.
140
Keppel Corporation Limited
Note
Group
2022
$’000
3
3
4
6
5
7
8
9
10
11
12
24
16
13
14
15
16
17
17
18
19
20
37
21
16
22
17
17
23
9
29
37
23
9
24
21
11,913,340
12,441,361
10,829,320
10,198,381
2021
$’000
1,305,668
(4,624)
10,354,096
11,655,140
401,521
384,700
Company
2022
$’000
1,305,668
(456,015)
9,578,146
10,427,799
401,521
-
2021
$’000
1,305,668
(4,624)
8,495,816
9,796,860
401,521
-
2,044,374
4,256,428
529,216
-
6,050,258
1,447,664
212,679
46,263
99,109
1,201,982
1,589,272
17,477,245
5,641
-
11,659
7,188,393
-
19,430
8,853
163,978
-
70,252
-
7,468,206
8,462
-
15,231
7,993,786
-
24,100
9,313
28,346
-
94,161
-
8,173,399
1,305,668
(456,015)
10,328,606
11,178,259
401,521
333,560
976,797
4,283,093
241,052
-
6,791,862
1,482,719
87,624
86,411
498,536
1,564,714
16,216,008
203,200
2,300,950
255,900
4,603,985
3,169,694
-
-
-
-
-
262,068
1,239,298
69,851
48,782
1,142,344
5,319,193
9,529,776
14,848,969
2,768,820
156,355
209,770
58,445
-
69,863
3,577,658
36,426
258,990
7,136,327
-
569,666
2,190,690
140,031
27,103
3,616,633
14,317,802
527,880
14,845,682
4,937,786
249,690
1,002,024
66,763
-
286,085
4,659,308
89,677
505,479
11,796,812
7,546,620
202
58,911
9,664
-
1,232
7,616,629
3,166,596
10,783,225
89,085
49,048
-
-
273,063
900
2,789,301
4,216
43,513
3,249,126
9,852,909
32
32,049
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
4,224,003
11,360,330
38,330
11,835,142
-
3,249,126
-
3,671,047
3,488,639
3,010,540
7,534,099
6,253,906
6,603,186
162,703
368,031
99,849
557,538
7,791,307
6,795,912
472,042
426,891
98,422
253,157
8,046,424
4,043,984
8,467
-
91,306
29,228
4,172,985
4,113,695
12,265
-
70,777
32,187
4,228,924
11,913,340
12,441,361
10,829,320
10,198,381
Financial Report
Consolidated Profit or Loss Account
For the financial year ended 31 December 2022
Continuing operations
Revenue
Materials, subcontract and other 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 before tax
Taxation
Profit from continuing operations for the year
Discontinued operations
Profit/(loss) from discontinued operations, net of tax
Profit for the year
Attributable to:
Shareholders of the Company:
- from continuing operations
- from discontinued operations
Perpetual securities holders
Non-controlling interests
Earnings per ordinary share
- basic
- diluted
Earnings per ordinary share - Continuing operations:
- basic
- diluted
#
Comparative information has been re-presented due to a discontinued operation (Note 37).
Note
2022
$’000
2021#
$’000
25
6,619,718
6,611,336
(5,174,408)
(5,082,017)
26
27
27
28
28
28
11
29
37
5
30
30
(667,878)
(206,558)
(34,010)
28,343
565,207
48,541
91,348
(146,187)
535,979
1,094,888
(245,149)
849,739
(665,169)
(290,823)
(299,480)
855,476
1,129,323
104,861
88,306
(170,102)
458,765
1,611,153
(375,189)
1,235,964
83,066
(225,952)
932,805
1,010,012
838,959
87,658
926,617
11,600
(5,412)
1,247,468
(224,817)
1,022,651
3,401
(16,040)
932,805
1,010,012
52.1 cts
51.6 cts
56.2 cts
55.9 cts
47.2 cts
46.7 cts
68.5 cts
68.1 cts
The accompanying notes form an integral part of these financial statements.
Annual Report 2022
141
Financial Report
Consolidated Statement of Comprehensive Income
For the financial year ended 31 December 2022
Profit for the year
Items that may be reclassified subsequently to profit or loss account:
Cash flow hedges
- Fair value changes arising during the year, net of tax
- Realised and transferred to profit or loss account
Foreign exchange translation
- Exchange differences arising during the year
- Realised and transferred to profit or 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 or loss account:
Financial assets, at FVOCI
- Fair value changes arising during the year
Foreign exchange translation
- Exchange differences 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 for the year
Attributable to:
Shareholders of the Company
- from continuing operations
- from discontinued operations
Perpetual securities holders
Non-controlling interests
#
Comparative information has been re-presented due to a discontinued operation (Note 37).
2022
$’000
2021#
$’000
932,805
1,010,012
155,771
195,578
(70,678)
74,573
(410,257)
(15,954)
187,852
17,595
68,506
(280,320)
(286,676)
34,251
96,000
339,593
(9,121)
(96,015)
(17,080)
4,217
(662)
(26,863)
(313,539)
194
(91,604)
247,989
619,266
1,258,001
523,603
107,852
631,455
11,600
(23,789)
1,497,622
(233,944)
1,263,678
3,401
(9,078)
619,266
1,258,001
The accompanying notes form an integral part of these financial statements.
142
Keppel Corporation Limited
Financial Report
Consolidated Statement of Changes in Equity
For the financial year ended 31 December 2022
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
2022
As at 1 January 2022
1,305,668
(4,624)
129,619 10,365,733
(141,256) 11,655,140
401,521
384,700 12,441,361
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
Distribution paid to perpetual
securities holders
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
Acquisition of a subsidiary
Total change in ownership
interests in subsidiaries
Total transactions with owners
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
926,617
-
926,617
11,600
(5,412)
932,805
411,369
-
(706,531)
(295,162)
-
(18,377)
(313,539)
411,369
926,617
(706,531)
631,455
11,600
(23,789)
619,266
-
-
-
-
-
-
(499,993)
-
(643,233)
45,096
-
-
-
-
-
-
48,602
(48,602)
-
-
-
-
-
(643,233)
45,096
-
(499,993)
-
-
-
-
-
-
-
-
-
-
-
-
-
(643,233)
45,096
(33,033)
(33,033)
-
-
-
(499,993)
-
-
2,916
2,916
(11,600)
-
(11,600)
1,234
-
22
1,256
-
-
-
-
17,659
(16,283)
(1,376)
-
-
1,234
-
-
-
-
-
-
(451,391)
15,387
(659,516)
(1,376) (1,096,896)
(11,600)
(30,095) (1,138,591)
-
-
-
-
(11,466)
-
-
(11,466)
-
26
-
26
-
-
-
-
(11,466)
26
-
(11,440)
-
-
-
-
(13,138)
(24,604)
(4,071)
(4,045)
19,953
19,953
2,744
(8,696)
(451,391)
3,921
(659,490)
(1,376) (1,108,336)
(11,600)
(27,351) (1,147,287)
As at 31 December 2022
1,305,668
(456,015)
544,909 10,632,860
(849,163) 11,178,259
401,521
333,560 11,913,340
*
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 2022
143
Financial Report
Consolidated Statement of Changes in Equity
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.
144
Keppel Corporation Limited
Financial Report
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
2022
As at 1 January 2022
1,305,668
(4,624)
224,759
8,271,057
9,796,860
401,521 10,198,381
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
Distribution paid to perpetual
securities holders
Total transactions with owners
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(499,993)
-
1,733,286
1,733,286
11,600
1,744,886
(4,218)
-
(4,218)
-
(4,218)
(4,218)
1,733,286
1,729,068
11,600
1,740,668
45,097
-
48,602
(48,602)
-
-
-
(643,233)
(643,233)
-
-
-
-
45,097
(499,993)
-
-
-
-
-
-
(643,233)
45,097
(499,993)
-
(11,600)
(11,600)
(451,391)
(3,505)
(643,233)
(1,098,129)
(11,600)
(1,109,729)
As at 31 December 2022
1,305,668
(456,015)
217,036
9,361,110 10,427,799
401,521 10,829,320
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
The accompanying notes form an integral part of these financial statements.
Annual Report 2022
145
Consolidated Statement of Cash Flows
For the financial year ended 31 December 2022
Operating activities
Operating profit
Adjustments:
Depreciation and amortisation
Share-based payment expenses
Gain on sale of fixed assets
Gain on disposal of subsidiaries
Gain on disposal of associated companies and joint ventures
Loss from sale of interests in associated companies
(Write-back)/provision of impairment
Impairment of associated companies
Fair value gain on investment properties
Gain from change in interest in associated companies
Fair value gain on investments and associated companies
Fair value gain on remeasurement of remaining interest in a joint venture
Gain on acquisition of subsidiaries
Unrealised foreign exchange differences
Operational cash flow before changes in working capital
Working capital changes:
Stocks
Contract assets
Debtors
Creditors
Contract liabilities
Trade amount due to/from associated companies and joint ventures
Interest received
Interest paid
Net income taxes paid
Net cash from/(used in) operating activities
Investing activities
Acquisition of subsidiaries
Acquisition and further investment in associated companies and joint ventures
Acquisition of fixed assets, investment properties, intangible assets
and investments
Disposal of subsidiaries
Proceeds from disposal of fixed assets, investment properties, and investments
Proceeds from disposal of associated companies and joint ventures
and return of capital
(Advances to)/repayment from associated companies, joint ventures
and joint venture partner
Dividends received from investments, associated companies and joint ventures
Net cash (used in)/from 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 advances from/(repayment to) non-controlling shareholders of
certain subsidiaries
Distribution to perpetual securities holders
Net cash used in financing activities
Net (decrease)/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
Note
2022
$’000
2021
$’000
(Reclassified)*
726,891
897,791
241,957
43,403
(6,980)
(22,498)
(74,860)
40,168
(291,867)
1,000
(131,711)
(10,933)
(85,844)
-
(6,795)
(100,380)
321,551
708,305
(620,466)
38,717
274,318
3,297
99,741
825,463
107,306
(285,609)
(387,573)
259,587
(34,328)
(885,728)
(696,211)
403,194
83,413
406,402
37,369
(9,550)
(241,054)
(208,635)
-
53,550
35,082
(238,458)
(8,516)
(315,540)
(69,469)
-
(10,841)
328,131
58,278
(520,205)
412,841
876,307
(1,072,727)
(17,217)
65,408
93,950
(251,077)
(259,964)
(351,683)
-
(156,783)
(614,872)
1,146,299
751,944
341,797
668,040
(210,364)
330,942
2,208
311,177
(667,285)
2,108,013
(28,600)
2,916
2,933,615
(3,270,039)
(82,641)
-
(499,993)
(643,233)
(33,033)
111,023
(11,600)
(1,521,585)
(28,385)
-
1,709,321
(2,308,566)
(68,573)
398,120
(13,048)
(345,752)
(11,251)
(6,428)
-
(674,562)
(1,929,283)
1,081,768
3,543,642
2,408,473
A
B
(169,586)
53,401
C
1,444,773
3,543,642
*
For the financial year ended 31 December 2022, the Group reclassified certain comparatives in the consolidated statement of cash flows for financial year ended 31
December 2021 to align to the current consolidated statement of cash flows presentation.
The accompanying notes form an integral part of these financial statements.
146
Keppel Corporation Limited
Financial Report
Reconciliation of liabilities arising from financing activities
2022
Non-cash changes
Net
proceeds/
(payment)
of principal
$’000
Addition
during the
year
$’000
Remeasure-
ment of
lease
liabitities
$’000
1 January
2022
$’000
Disposal of
subsidiaries
$’000
Acquisition
of
subsidiaries
$’000
Term loans
11,455,220
(336,424)
-
-
(55,286)
43,909
561,719
(82,641)
43,084
20,864
(30,814)
163,815
111,023
-
-
-
-
-
Lease
liabilities
Advances
from non-
controlling
shareholders
2021
Presented
as liabilities
directly
associated
with assets
classified as
held for sale
(Note 37)
$’000
31 December
2022
$’000
(757,711)
10,180,844
(314,714)
199,129
Foreign
exchange
movement
$’000
(168,864)
1,631
Others
$’000
-
-
(1,970)
842
-
273,710
1 January 2021
$’000
Net payment of
principal
$’000
Addition during
the year
$’000
Non-cash changes
Remeasure-
ment of
lease liabitities
$’000
Disposal of
subsidiaries
$’000
Term loans
12,039,196
(599,245)
-
-
Lease
liabilities
Advances
from non-
controlling
shareholders
563,904
(68,573)
76,427
(4,536)
168,030
(6,428)
-
-
-
-
-
Foreign
exchange
movement
$’000
15,269
(5,503)
Others
$’000
-
-
31 December
2021
$’000
11,455,220
561,719
1,365
848
163,815
Notes to Consolidated Statement of Cash Flows
A.
Acquisition of subsidiaries
During the financial year, net assets of subsidiaries acquired at their fair values were as follows:
Fixed assets and investment properties
Right-of-use assets
Intangible assets
Stocks
Debtors and other assets
Bank balances and cash
Creditors and other liabilities
Borrowings and lease liabilities
Current and deferred taxation
Total identifiable net assets at fair value
Non-controlling interests measured at fair value
Amount previously accounted for as an associated company
Gain on acquisition of subsidiaries
Total purchase consideration
Less: Bank balances and cash acquired
Cash outflow on acquisition
2022
$’000
3,829
226
10,799
9,174
109,918
21,056
(19,578)
(43,909)
(8,820)
82,695
(20,694)
178
(6,795)
55,384
(21,056)
34,328
Acquisitions during 2022 relate to acquisition of 51% of equity interest in Glocomp Systems (M) Sdn Bhd over two tranches and
acquisition of 100% equity interest in Juventas DC Pte. Ltd.. Fair value of the net identifiable assets is determined on a provisional basis.
The accompanying notes form an integral part of these financial statements.
Annual Report 2022
147
Consolidated Statement of Cash Flows
B.
Disposal of Subsidiaries
During the financial year, the book values of net assets of subsidiaries disposed were as follows:
Fixed assets and investment properties
Right-of-use assets
Intangible assets
Stocks
Debtors and other assets
Associated companies and joint ventures
Bank balances and cash
Assets classified as held for sale*
Amount due from associated companies and joint ventures
Creditors and other liabilities
Borrowings and lease 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 associated company
Realisation of foreign currency translation reserve
Sale proceeds
Less: Bank balances and cash disposed
Less: Proceeds receivable
Cash inflow on disposal
2022
$’000
(98,621)
(33,480)
(1,275)
(233,405)
(59,263)
(127,215)
(15,769)
-
-
35,301
86,100
-
33,911
4,009
(409,707)
(22,498)
-
8,520
(423,685)
15,769
4,722
(403,194)
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)
*
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
2022
$’000
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, disposal of subsidiaries relates to Shanghai Fengwo Apartment Management Co Ltd, Shanghai Jinju Real Estate
Development Co Ltd, Keppel Logistics Pte. Ltd. and Indo-Trans Keppel Logistics Vietnam Co Ltd.
In the prior 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.
C.
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
Disposal group classified as held for sale - bank balances,
deposits & cash (Note 37)
Amounts held under escrow accounts for overseas acquisition of land,
payment of construction cost, claims and other liabilities
The accompanying notes form an integral part of these financial statements.
148
Keppel Corporation Limited
2022
$’000
2021
$’000
1,142,344
3,616,633
381,179
-
(78,750)
1,444,773
(72,991)
3,543,642
Financial Report
Notes to the Financial Statements
For the financial year ended 31 December 2022
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 2022 and the balance sheet and statement of changes
in equity of the Company at 31 December 2022 were authorised for issue in accordance with a resolution of the Board of Directors on 2
March 2023.
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.
Interest Rate Benchmark Reform – Phase 2
In the prior year, 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 were applied retrospectively to hedging
relationships and financial instruments. Comparative amounts have not been restated, and there was no impact on the prior 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 continued to apply 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 relationships.
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.
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.
Annual Report 2022
149
Financial Report
Notes to the Financial Statements
2.
Significant accounting policies (continued)
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 2022, the Group has applied the practical expedients provided under Phase 2 amendments to
S$1,965 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$200 million of remaining variable-rate SGD borrowing and S$28,931,000 variable-rate SGD receivables which references
to SOR, with interest rate fixing date falling after 30 June 2023. The Group’s communication with its debt counterparty and receivables
counterparties respectively are still ongoing, as specific changes required by IBOR reform have not yet been finalised. 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$425 million (or S$581 million equivalent) of remaining variable-rate USD borrowings, S$410,119,000
variable-rate USD receivables and S$1,775,000 variable-rate USD payables which references to USD LIBOR, with interest rate fixing
dates falling after 30 June 2023. The Group hedges the variability in cash flows of its borrowings using USD LIBOR-linked interest rate
swaps. While most swaps have been restructured in view of IBOR reform, the Group’s communication with its swap, debt, receivables
and payables counterparties respectively are still ongoing, as specific changes required by IBOR reform have not yet been finalised. 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 2022 which
are referenced to SOR and have not started transitioning to new benchmark rates:
31 December 2022
Assets
- Amounts due from an associated company
- Loan to a joint venture
Liabilities
- Borrowings
Group
Company
SOR
Of which:
Not started
transitioning to
an alternative
benchmark rate
$’000
Carrying Amount
$’000
Of which:
Not started
transitioning to
an alternative
benchmark rate
$’000
Carrying Amount
$’000
20,000
8,931
20,000
8,931
199,825
199,825
-
-
-
-
-
-
The following table contains details of all the affected financial instruments that the Group and Company holds at 31 December 2022
which are referenced to USD LIBOR and have not started transitioning to new benchmark rates:
31 December 2022
Assets
- Derivative Financial Instruments
- Trade Receivables
Liabilities
- Borrowings
- Creditors
Group
Company
USD LIBOR
Of which:
Not started
transitioning to
an alternative
benchmark rate
$’000
Carrying Amount
$’000
Of which:
Not started
transitioning to
an alternative
benchmark rate
$’000
Carrying Amount
$’000
17,026
410,119
581,230
1,775
17,026
410,119
170,950
1,775
17,026
-
581,230
-
17,026
-
170,950
-
The above table excludes receivables from KrisEnergy of S$109,601,000 which are referenced to USD LIBOR as the carrying amount of
these receivables are primarily measured based on the expected recoveries for the Group.
150
Keppel Corporation Limited
Financial Report
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 2022. 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) 1-16 Property, Plant and Equipment - Proceeds before Intended Use (effective for annual periods
beginning on or after 1 January 2022)
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)
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.
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 or 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 or 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 or 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 or 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 or 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 2022
151
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 or 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
Plant, machinery & equipment
Networks and related application systems
Furniture, fittings & office equipment
30 to 50 years
Over period of lease (ranging from 10 to 50 years)
3 to 30 years
5 to 25 years
2 to 15 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 or loss account. The cost of major renovations or improvements is
capitalised and the carrying amounts of the replaced components are recognised in the profit or loss account.
On disposal of an investment property, the difference between the disposal proceeds and the carrying amount is recognised in the profit
or 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 or loss account.
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 or 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.
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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 or 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 or 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. 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 17 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 15 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.
Annual Report 2022
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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 or 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 or loss account when the asset is derecognised
or impaired. Interest income from these financial assets is recognised in the profit or 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 or 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 or loss account. When the financial
asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to the profit or loss
account. Interest income from these financial assets is recognised in the profit or 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 or 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 or 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 or
loss account. Any amount previously recognised in other comprehensive income relating to that asset is reclassified to the profit
or loss account.
On disposal of an equity investment, the difference between the carrying amount and sales proceed is recognised in the profit
or 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 or 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 or loss account.
Amounts taken to other comprehensive income are reclassified to the profit or loss account when the hedged transaction affects the
profit or loss account.
For fair value hedges, changes in the fair value of the designated hedging instruments are recognised in the profit or 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 or
loss account.
For net investment hedges, the Group designates certain foreign currency borrowings as net investment hedges of foreign operations.
These hedging instruments are accounted for similarly to cash flow hedges.
When foreign currency borrowings are designated as net investments hedges of foreign operations, the effective portion of currency
translation differences is recognised in other comprehensive income and presented in the translation reserve within equity. Any
ineffective portion of the currency translation differences is recognised immediately in profit or loss. The amount recognised in other
comprehensive income is reclassified to profit or loss on disposal of the foreign operation.
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.
Annual Report 2022
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Notes to the Financial Statements
2.
Significant accounting policies (continued)
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 or 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.
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 or 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 or 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.
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it
incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument.
Financial guarantees are initially recognised at their fair values plus transaction costs in the balance sheet. Financial guarantees are
subsequently amortised to the profit or loss account over the period of the guarantee. If it is probable that the liability will be higher than
the amount initially recognised less amortisation, the liability is recorded at the higher amount with the difference charged to the profit
or loss account.
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 onerous contracts is recognised when a contract is onerous. An onerous contract is considered to exist where the Group
has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected
to be received under it. The provision for onerous contract represents the present value of the management’s best estimate of the
future outflow of economic benefits that the Group is presently obliged to make under its obligations.
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.
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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.
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.
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.
Finance leases
Leases where the Group has transferred substantially all risks and rewards incidental to ownership of the leased assets to the lessees,
are classified as finance leases.
The leased asset is derecognised and the present value of the lease receivable is recognised on the balance sheet and included
in debtors and long-term receivables. The difference between the gross receivable and the present value of the lease receivable is
recognised as unearned finance income.
Each lease payment received is applied against the gross investment in the finance lease receivable to reduce both the principal and the
unearned finance income. The finance income is recognised in profit or loss on a basis that reflects a constant periodic rate of return on
the net investment in the finance lease receivable.
Initial direct costs incurred by the Group in negotiating and arranging finance leases are added to finance lease receivables and reduce
the amount of income recognised over the lease term.
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Notes to the Financial Statements
2.
Significant accounting policies (continued)
2.19 Assets (or disposal groups) classified as Held for Sale and discontinued operations
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. The assets are not depreciated or amortised while they are classified as
held for sale. This condition is regarded as met only when the sale is highly probable and the asset (or disposal groups) 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 (or disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair
value less costs to sell.
A discontinued operation is a component of an entity that either has been disposed of, or that is classified as held for sale and:
-
-
-
represents a separate major line of business or geographical area of operations; or
is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or
is a subsidiary acquired exclusively with a view to resale.
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.
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.
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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 or 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.
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 or 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 or 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 or 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.
Annual Report 2022
159
Notes to the Financial Statements
2.
Significant accounting policies (continued)
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 or 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.
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, or 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, namely Energy & Environment, 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.
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Financial Report
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% (2021: approximately 47%) gross ownership interest of units in Keppel REIT as at 31
December 2022. 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.
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)
Assessment of carrying amount of disposal group held for sale
As disclosed in Note 37, the assets and liabilities related to Keppel O&M for the Proposed Combination, excluding the
out-of-scope assets, had been presented in the balance sheet as “Disposal group classified as held for sale” following
the definitive agreements for the proposed combination of Keppel O&M and Sembcorp Marine and for the sale of Keppel
O&M’s legacy rigs and associated receivables to a new and separate entity.
Specifically, the rigs under deferred delivery and secured trade receivables that are subject to the construction contracts,
stocks under work-in-progress and fixed assets will be sold to the new and separate entity at its carrying value at the earlier
of 30 June 2023 and date of completion of the proposed combination of Keppel O&M and Sembcorp Marine.
Whilst the assessment of the carrying amount of these assets is subjected to significant estimation uncertainty (as
discussed below), the global economic environment has gradually recovered from COVID-19 and the oil and gas industry,
in particular, has seen improvements in oil price recovery and increasing activities with more tenders awarded with higher
dayrates contracted. The Group have been closely monitoring the market and industry developments relating to utilisation
rates, dayrates, oil price outlook and other relevant information.
For rigs under construction with deferred delivery (contract assets and secured 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. The
assessment of the carrying value of stocks under work-in-progress and certain fixed assets were assessed in conjunction
with the recoverability of these contract assets and secured receivables.
Annual Report 2022
161
Notes to the Financial Statements
2.
Significant accounting policies (continued)
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 2022. 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 rigs. 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 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.
a)
Contract Assets and Receivables
i.
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 and the Group had obtained
full title to the remaining 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. Carrying amount of the
equipment that the Group had salvaged from these four uncompleted rigs was approximately $109,974,000
as at 31 December 2022 (2021: $145,598,000). During the financial year, the Group had also successfully
completed settlements with all vendors for related contract costs for the four uncompleted rigs with a total
savings of $65,763,000. This amount has been written back in the profit or loss during the financial year and
the remaining provision for settlement as at 31 December 2022 is $36,063,000.
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 a possible payout
from the Plan of approximately US$8,900,000.
Management performed an assessment of the estimated recovery of the two rigs which Magni had bidded to
purchase from Sete. Carrying amount of these two rigs was approximately $157,574,000 (net of cumulative
losses) as at 31 December 2022 (2021: $157,449,000).
Management estimated the net present value of the cashflows relating to the construction contract with
Magni or another investor to replace Magni at similar terms. In addition, management performed an
assessment to estimate the cost of discontinuance of related agreements of the EPC contracts with Sete,
as well as the possible option of repossessing the rigs, complete the construction and charter out to extract
value from the uncompleted rigs.
In estimating the charter rates, management have considered the assumptions provided by independent
professional firms.
Arising from the above assessment, the loss allowance for trade debtors of $183,000,000 and the provision
for related contract costs of $245,000,000 made in prior years remain adequate to the exposure relating to
the EPC contracts with Sete. Total cumulative loss recognised in relation to these rig contracts amounted to
$410,237,000 after the write-back of the provision as at 31 December 2022 (2021: $476,000,000).
The above assessment had been made with the following key assumptions, taking into consideration the
likelihood and expected financial impact of the various possible outcomes:
(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;
If Magni or another investor is unable to purchase the rigs from Sete, KOM would regain possession of
the rigs, complete the construction and charter them out. The recoverable amounts under this scenario
are based on the VIU of the rigs determined by management with the assistance of the independent
professional firms as detailed above; and
The future cost of construction of the rigs are not materially different from management’s current
estimation.
(iii)
(iv)
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Financial Report
The Group has considered that a combination of reasonable change in the assumptions above could
eliminate the headroom in the recoverable amount over the carrying amounts and hence has not reversed any
of the previously recognised expected credit loss as at 31 December 2022.
ii.
Other contracts
During the financial year, the Group formally terminated several construction contracts of rigs, of which some
of these rigs have entered into bareboat charter contracts. As a result, these rigs were reclassified to stocks or
fixed assets. Please see the following sections on the significant estimations on these stocks and fixed assets.
As at 31 December 2022, 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 $572,179,000 (31 December 2021: $1,707,190,000).
The Group had also delivered rigs to customers where receipt of the construction revenue has been
deferred under certain financing arrangements, amounting to $377,964,000 as at 31 December 2022 (2021:
$791,952,000). These receivables are secured on the delivered rigs.
Management has 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 as at 31 December 2022.
Based on the results of the assessments, the Group did not recognise any expected credit loss on contract
assets and receivables during the financial year ended 31 December 2022 (2021: expected credit loss
allowance of $75,952,000 on receivables).
The valuations of the rigs based on estimated VIU were most sensitive to discount rates and dayrates.
•
•
A discount rate of 9.0% has been used in the valuation as at 31 December 2022 (2021: 7.6%).
An increase of 1% of the discount rate would not result in additional expected credit loss (2021:
$7,000,000).
A decrease in dayrates of US$5,000 per day across the entire asset useful life of 25 years would not
result in additional expected credit loss (2021: $nil).
The Group has considered that a combination of reasonable change in the assumptions above could
eliminate the headroom in the recoverable amount over the carrying amounts and hence have not reversed
any of the previously recognised expected credit loss as at 31 December 2022.
b)
Stocks at net realisable value
The net realisable value of stocks represents the estimated selling price for these stocks less all estimated cost of
completion and costs necessary to make the sale.
As at 31 December 2022, the carrying value of stocks under work-in-progress amounted to $1,548,872,000. This
balance includes the stocks that were transferred from contracts assets and receivables following the termination
of the construction contracts in Note 2.28(b)(i)(a)(ii) above of $374,694,000 during 2022.
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 2022 (2021: $nil).
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.
•
•
•
A discount rate of 9.0% has been used in the valuation as at 31 December 2022 (2021: 7.6%). An increase of
1% of the discount rate would not result in an impairment (2021: $46,500,000).
A decrease in dayrates of US$5,000 per day across the entire asset life of 25 years would not result in an
impairment (2021: $nil).
A delay in charter start date of 12 months would not result in an impairment (2021: $24,200,000).
The Group has considered that a combination of reasonable change in the assumptions above could eliminate the
headroom in the recoverable amount over the carrying amounts and hence have not reversed any of the previously
recognised impairment as at 31 December 2022.
Annual Report 2022
163
Notes to the Financial Statements
2.
Significant accounting policies (continued)
c)
Impairment of fixed assets
As noted in Note 2.28(b)(i)(a)(ii) above, the Group formally terminated several construction contracts, of which
some of these rigs have entered into bareboat charter contracts. These rigs were reclassified to fixed assets and
amounted to $1,164,887,000 (before the reversal of any impairment loss) during 2022.
Based on the results of the VIU assessment, the Group made a reversal of impairment previously recognised on
these fixed assets due to significant improvements in the demand for these rigs and that they are already on charter
and in operation. The reversal represented the excess of the recoverable amount as at 31 December 2022 over
previously impaired carrying amount, and did not exceed the recoverable amount that would have been determined
(net of amortisation or depreciation) had no impairment loss been recognised for the rigs in prior years. The
recoverable amount as at 31 December 2022 was determined based on VIU calculations. A higher pre-tax discount
rate of 9.0% and higher forecasted dayrates provided by independent professional firms were used as compared
to when the impairment was originally made in prior years. A reversal of impairment of $292,838,000 has been
recognised in the profit or loss.
The valuations of these fixed assets based on estimated VIU were most sensitive to discount rates and dayrates.
•
•
A discount rate of 9.0% has been used in the valuation as at 31 December 2022 (2021: 7.6%). An increase of
1% of the discount rate would reduce the impairment reversed by approximately $143,598,000.
A decrease in dayrates of US$5,000 per day across the entire asset useful life of 25 years would reduce the
impairment reversed by approximately $78,774,000.
(ii)
(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 2022.
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.
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, the work of engineers as well as quotations and references
from other projects. These estimations are also made with due consideration of the circumstances and relevant events
that were known to management at the date of these financial statements.
The above assessment had been made with the following key assumptions:
(i)
(ii)
(iii)
estimation of the expected completion dates of each project, including expectations of any potential delays;
additional costs that will be required to complete the projects; and
impact of potential cost escalations.
As at 31 December 2022, management has assessed that for some projects, total contract costs for each project would
exceed the total contract sum, resulting in the recognition of the expected loss as an expense immediately. Costs yet to
be incurred for these projects as at 31 December 2022 have been included in provision for onerous contracts as detailed
in Note 22 and $91,548,000 (2021: $18,831,000) relating to discontinued operations presented within liabilities directly
associated with disposal group held for sale.
Revenue from construction contracts is disclosed in Note 25 and revenue from construction contracts in relation to the
offshore & marine business amounting to $2,647,964,000 is disclosed within discontinued operations in Note 37.
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Financial Report
(iv)
(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.
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. See Note 33 for
further disclosures relating to the Group’s claims and litigations.
(vi) 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.
(vii) Revaluation of investment properties
The Group carries its investment properties at fair value with changes in fair value being recognised in the profit or 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 2022, valuations were obtained from the
valuers for the Group’s investment properties, and the resultant fair value changes were recognised in the profit or 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.
(viii) 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.
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.
Annual Report 2022
165
Notes to the Financial Statements
2.
Significant accounting policies (continued)
(ix)
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; and
Valuation techniques 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.
3.
Share capital
Group and Company
Number of Ordinary Shares (“Shares”)
Issued Share Capital
Treasury Shares
2022
2021
2022
2021
Balance at 1 January
1,820,557,767
1,820,557,767
Treasury shares transferred pursuant to share plans
Treasury shares purchased
Balance at 31 December
Balance at 1 January
Treasury shares transferred pursuant to share plans
Treasury shares purchased
Balance at 31 December
-
-
-
-
(943,259)
8,209,410
(75,864,000)
1,820,557,767
1,820,557,767
(68,597,849)
(3,051,474)
4,668,215
(2,560,000)
(943,259)
Amount ($’000)
Issued Share Capital
Treasury Shares
2022
2021
2022
1,305,668
1,305,668
-
-
-
-
1,305,668
1,305,668
(4,624)
48,602
(499,993)
(456,015)
2021
(13,690)
22,114
(13,048)
(4,624)
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 8,209,410 (2021: 4,668,215) treasury shares to employees under vesting of Shares
released under the KCL Share Plans. The Company also purchased 75,864,000 (2021: 2,560,000) treasury shares in the Company in the
open market during the financial year. The total amount paid was $499,993,000 (2021: $13,048,000). 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
Penny Goh (appointed on 1 June 2022)
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.
166
Keppel Corporation Limited
Financial Report
During the financial year, 1,566,518 (2021: 2,955,417) Shares under the KCL Restricted Share Plan – Deferred Shares (“KCL RSP-
Deferred Shares”), 3,802,557 (2021: 1,712,798) Shares under the KCL Restricted Share Plan 2020 – Deferred Shares (“KCL RSP
2020-Deferred Shares”), 495,600 (2021: nil) Shares under the KCL Performance Share Plan (“KCL PSP”) and 2,344,735 (2021: nil) Shares
under the KCL PSP – Transformation Incentive Plan (“KCL PSP-TIP”) were vested.
Details of the KCL RSP-Deferred Shares, KCL RSP 2020-Deferred Shares, KCL PSP, KCL PSP 2020, 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-Deferred Shares &
KCL RSP 2020-Deferred Shares
Award of fully-paid ordinary shares
of the Company
KCL PSP & KCL PSP 2020
KCL PSP-TIP
Award of fully-paid ordinary shares
of the Company, conditional on
achievement of pre-determined
targets over a three-year
performance period
Award of fully-paid ordinary shares
of the Company, conditional on
achievement of pre-determined
targets over a six-year performance
period
Performance Conditions
-
Final Award
100% of the awards granted
Vesting Condition
and Schedule
Awards will vest equally over three
years subject to fulfilment of service
requirements
Plan Description
Performance Conditions
Final Award
Vesting Condition
and Schedule
(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
PSP awards from Year 2019 to
2021
(a) Absolute Total Shareholder’s
Return
(b) Return on Capital Employed
(c) Net Profit
PSP awards from Year 2022
onwards
(a) Reduction in Carbon Emission
(b) Net Profit
(c) Return on Equity
(d) Absolute Total Shareholder’s
Return
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 three-year performance
period subject to fulfilment of
service requirements
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
KCL PSP-M1 TIP
KCL PSP 2020-TIP
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
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, 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
Annual Report 2022
167
Notes to the Financial Statements
3.
Share capital (continued)
Movements in the number 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 as follows:
KCL RSP 2020-
Deferred
Shares
KCL PSP
KCL PSP-TIP
KCL
PSP-M1 TIP
KCL
PSP 2020
KCL PSP
2020-TIP
2022
Contingent awards/
Awards (KCL RSP 2020-
Deferred Shares)
Balance at 1 January
Granted
Adjustments upon released
Released
Cancelled
-
6,317,893
(8,862)
(6,309,031)
-
4,171,880
-
(684,400)
(495,600)
(150,000)
6,166,706
-
(3,796,628)
(2,344,735)
(25,343)
423,500
-
-
-
(43,600)
1,490,000
1,775,000
-
-
(150,000)
11,140,000
840,000
-
-
(760,000)
Balance at 31 December
-
2,841,880
-
379,900
3,115,000
11,220,000
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
-
5,096,700
(7,625)
(5,089,075)
-
4,300,000
-
-
-
(128,120)
6,522,171
-
-
-
(355,465)
423,500
-
-
-
-
-
1,490,000
-
-
-
-
11,380,000
-
-
(240,000)
Balance at 31 December
-
4,171,880
6,166,706
423,500
1,490,000
11,140,000
At the end of the financial year, the number of contingent award of Shares granted but not released was:
•
•
•
•
•
2,841,880 (2021: 4,171,880) under the KCL PSP;
nil (2021: 6,166,706) under the KCL PSP-TIP;
379,900 (2021: 423,500) under the KCL PSP-M1 TIP, out of which 115,100 (2021: 127,900) is to be vested in three years and
264,800 (2021: 295,600) is to be vested in six years;
3,115,000 (2021: 1,490,000) under the KCL PSP 2020; and
11,220,000 (2021: 11,140,000) 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 4,262,820 under the KCL PSP, zero to a maximum of 569,850 under the KCL PSP-M1 TIP, zero to a maximum of
4,672,500 under the KCL PSP 2020, and zero to a maximum of 16,830,000 under the KCL PSP 2020-TIP.
Awards released but not vested:
Balance at 1 January
Released
Vested
Cancelled
Other adjustments
Balance at 31 December
2022
2021
KCL RSP-
Deferred
Shares
KCL RSP-
2020
Deferred
Shares
KCL RSP-
Deferred
Shares
KCL RSP-
2020
Deferred
Shares
1,576,649
-
3,231,494
6,309,031
4,669,070
-
-
5,089,075
(1,566,518)
(3,802,557)
(2,955,417)
(1,712,798)
(10,131)
(483,620)
(133,989)
(144,783)
-
-
-
(3,015)
-
5,254,348
1,576,649
3,231,494
As at 31 December 2022, there were no awards released but not vested (2021: 1,576,649) under the KCL RSP-Deferred Shares and
5,254,348 (2021: 3,231,494) under the KCL RSP 2020-Deferred Shares.
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.
168
Keppel Corporation Limited
Financial Report
On 15 February 2022, the Company granted awards of 6,317,893 Shares under the KCL RSP 2020-Deferred Shares and the estimated
fair value of the Shares granted were $5.84. On 29 April 2022, the Company granted contingent awards of 1,775,000 Shares under the
KCL PSP 2020 and the estimated fair value of the Shares granted was $6.07. On 29 April 2022, the Company granted contingent awards
of 840,000 Shares under the KCL PSP 2020-TIP and the estimated fair value of the Shares granted was $3.53.
In the prior year, 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.
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
Date of grant
Prevailing share price at date of grant
Expected volatility of the Company
Expected term
Risk free rate
Expected dividend yield
2022
KCL RSP 2020-
Deferred Shares
KCL PSP 2020
KCL PSP 2020-TIP
15.02.2022
29.04.2022
29.04.2022
$6.05
26.92%
$6.87
26.05%
$6.87
26.05%
0.00 - 2.00 years
2.83 years
3.83 years
0.90% - 1.26 %
*
2.17%
*
2.27%
*
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%
*
0.56%
*
0.77%
*
*
Expected dividend yield is based on management’s forecast.
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.
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
Group
2022
$’000
205,342
(60,911)
239,457
40,000
121,021
544,909
2021
$’000
198,151
(49,653)
(180,398)
40,000
121,519
129,619
Company
2022
$’000
205,342
19,430
-
-
(7,736)
217,036
2021
$’000
198,151
24,100
(452)
-
2,960
224,759
10,632,860
10,365,733
9,361,110
8,271,057
(849,163)
(141,256)
-
-
10,328,606
10,354,096
9,578,146
8,495,816
Exchange differences arises from the translation of financial statements of foreign operations whose functional currencies are different
from that of the Group’s presentation currency as well as from the translation of foreign currency loans that form part of the Group’s net
investment in foreign operations. The translation losses for 2022 arose largely from weakening of Renminbi against Singapore Dollar
(2021: translation gains arose largely from strengthening of Renminbi against Singapore Dollar).
Annual Report 2022
169
Notes to the Financial Statements
4.
Reserves (continued)
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:
Group
2022
As at 1 January
Fair value changes arising during the year, net of tax
Realised and transferred to profit or loss account
- Materials, subcontract and other 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
2021
As at 1 January
Fair value changes arising during the year, net of tax
Realised and transferred to profit or loss account
- Materials, subcontract and other 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
Foreign
exchange risk
$’000
Interest
rate risk
$’000
Price risk
$’000
Total
$’000
2,396
(16,329)
(33,943)
224,247
(148,851)
(180,398)
(52,147)
155,771
(1,895)
80,464
-
-
-
-
(3,253)
2,830
1,882
66,518
66,624
256,505
117,432
115,537
-
-
-
-
(83,566)
80,464
(3,253)
2,830
68,506
239,457
(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)
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
2022
20%
2021
20%
Carrying amount of NCI
2022
$’000
280,725
52,835
2021
$’000
304,313
80,387
Profit after tax
allocated to NCI
2022
$’000
10,041
(15,453)
2021
$’000
6,999
(23,039)
Total
333,560
384,700
(5,412)
(16,040)
170
Keppel Corporation Limited
Financial Report
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 (used in)/generated from investing activities
Net cash used in financing activities
Total comprehensive income allocated to NCI
Dividends paid to NCI
Konnectivity Pte. Ltd.
2022
$’000
2021
$’000
1,935,283
1,865,149
459,086
143,409
489,427
641,450
135,917
485,153
1,761,533
1,885,529
(357,907)
(363,965)
1,403,626
1,521,564
1,182,413
1,096,177
65,313
56,091
155,663
(148,946)
(178,765)
12,629
38,640
40,979
45,841
273,921
360,092
(423,465)
7,396
9,980
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 on changes in ownership interest in subsidiaries
Amounts paid on acquisition of additional interest made in prior year
Non-controlling interest acquired
Total amount recognised in equity reserves
6.
Perpetual Securities
2022
$’000
2021
$’000
(28,600)
(31,307)
3,996
13,138
-
19,385
(11,466)
(11,922)
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.
As at 31 December 2022, the perpetual securities of $401,521,000 (2021: $401,521,000) recognised within equity represent the
$398,120,000 (2021: $398,120,000) perpetual securities issued net of transaction costs, and include the accrued distributions for the
perpetual securities.
Annual Report 2022
171
Notes to the Financial Statements
7.
Fixed assets
Group
2022
Cost
At 1 January
Additions
Disposals
Write-off
Subsidiaries acquired
Subsidiaries disposed
Reclassification
- ROU asset
- Contract assets
- Other fixed assets categories
- Disposal group and assets
classified as held for sale
(Note 37)
Exchange differences
Freehold
Land &
Buildings
$’000
Buildings on
Leasehold
Land
$’000
Vessels &
Floating
Docks
$’000
Networks &
Related
Application
Systems
$’000
Plant,
Machinery,
Equipment
& Others(1)
$’000
Capital
Work-in-
Progress
$’000
Total
$’000
83,916
1,883,539
455,186
321
(267)
-
3,409
-
-
-
38
1,237
(159)
-
-
(249,852)
(303)
-
5,450
6
(13)
-
-
-
-
-
(877)
(40,124)
(1,078,608)
(448,773)
(2,057)
(21,832)
(5,529)
80,825
73,200
-
-
-
-
-
-
-
-
-
2,231,360
160,344
4,895,170
104,601
100,048
279,413
(43,443)
(5,396)
(49,278)
(890)
420
(52)
-
(942)
3,829
(43,053)
(791)
(293,696)
-
-
-
(303)
753,612
753,612
24,184
(28,795)
-
(1,232,094)
(810,811)
(3,610,410)
(9,391)
1,585
(37,224)
At 31 December
45,236
539,472
-
154,025
1,031,694
169,744
1,940,171
Accumulated depreciation and
impairment losses
At 1 January
Depreciation charge
- from continuing operations
- from discontinued operations
Disposals
Subsidiaries disposed
Reclassification
- ROU asset
- Other fixed assets categories
- Disposal group and assets
classified as held for sale
(Note 37)
Exchange differences
At 31 December
Net Book Value
57,039
956,228
171,115
37,083
1,586,668
42,663
2,850,796
-
13,208
919
446
(256)
-
-
-
17,516
7,496
(155)
(157,231)
(155)
(96)
4,992
(13)
-
-
-
(24,308)
(568,868)
(172,040)
(1,657)
(7,951)
(4,054)
32,183
246,784
13,053
292,688
-
-
84,560
12,560
(39,884)
(37,844)
-
96
-
-
-
-
-
-
116,203
25,494
(40,308)
(195,075)
(155)
-
(985,456)
(19,555)
(1,770,227)
(7,463)
(2,229)
(23,354)
-
-
-
-
-
-
-
50,291
613,237
20,879
963,374
103,734
418,457
148,865
976,797
Included in freehold land & buildings are freehold land amounting to $2,655,000 (2021: $6,264,000). Certain fixed assets with carrying
amount of $88,000 (2021: $116,755,000) are mortgaged to banks for loan facilities (Note 23).
Interest capitalised during the financial year amounted to $nil (2021: $nil).
172
Keppel Corporation Limited
Financial Report
Group
2021
Cost
At 1 January
Additions
Disposals
Write-off
Subsidiaries disposed
Reclassification
- ROU asset
- Stocks
Freehold
Land &
Buildings
$’000
Buildings on
Leasehold
Land
$’000
Vessels &
Floating
Docks
$’000
Networks &
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)
-
-
-
-
6,262
(2,787)
(11,775)
-
36,406
(19,642)
81,434
144
106,519
90,816
103,423
308,785
(2,774)
(749,377)
(21,258)
(32,157)
(809,934)
-
-
-
-
(20,578)
(55,340)
6,795
-
-
-
-
(636)
-
-
(2,696)
(208)
-
-
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
- Other fixed assets categories
(32,292)
- Asset held for sale (Note 37)
Exchange differences
(69)
(142,955)
(1,876)
22,602
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
- from continuing operations
- from discontinued operations
Disposals
Impairment
Write-off
Subsidiaries disposed
Reclassification
- ROU asset
- Stocks
- Other fixed assets categories
- Asset held for sale (Note 37)
Exchange differences
(13,506)
(30)
(835)
70,386
968,237
176,300
155,070
1,544,970
40,646
2,955,609
884
1,496
(1,356)
-
-
-
-
-
32,247
17,651
(2,326)
35,969
(6,002)
-
12,124
(10,094)
21,845
(118,729)
5,306
-
82,447
22,201
-
83,250
43,163
(2,066)
(200,350)
(20,730)
-
-
-
-
-
(12,138)
(16,834)
3,652
-
-
-
-
-
(84)
-
-
-
(1,732)
(186)
-
-
3,883
(71,867)
5,917
-
-
-
866
-
-
-
-
-
-
198,828
84,511
(226,828)
36,835
(7,734)
(186)
12,124
(10,094)
-
(207,460)
1,151
15,191
At 31 December
Net Book Value
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
(1) Others comprise furniture, fittings and office equipment and cranes.
In 2021, the Group recognised an impairment loss of $35,969,000 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 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% per annum.
In 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 does not contain a lease in accordance with SFRS(I) 16 Leases. Accordingly, the NSA has been accounted for as a
service contract.
Annual Report 2022
173
Notes to the Financial Statements
7.
Fixed assets (continued)
Company
2022
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
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
(2) Others comprise furniture, fittings and office equipment.
8.
Investment properties
At 1 January
Development expenditure
Fair value gain (Note 27)
Disposal
Reclassification
- Stocks (Note 15)
Exchange differences
At 31 December
Freehold
Land &
Buildings
$’000
Plant,
Machinery,
Equipment
& Others(2)
$’000
Total
$’000
1,233
23,661
24,894
-
-
146
(663)
146
(663)
1,233
23,144
24,377
1,233
-
-
15,199
2,582
(278)
16,432
2,582
(278)
1,233
17,503
18,736
-
5,641
5,641
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
Group
2022
$’000
2021
$’000
4,256,428
3,674,075
216,799
131,711
(41,204)
-
(280,641)
229,581
238,458
-
3,544
110,770
4,283,093
4,256,428
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.
174
Keppel Corporation Limited
Financial Report
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 professional valuers as at 31 December 2022:
-
-
-
-
-
-
Cushman & Wakefield VHS Pte Ltd and Knight Frank Pte Ltd for properties in Singapore;
Cushman & Wakefield Shenzhen Valuation Company Limited and Colliers Appraisal & Advisory Services 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) and VAS Valuation Co., Ltd (in association with CBRE
(Vietnam) Co., Ltd) 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 professional valuers, management has analysed the appropriateness of the fair
value changes.
Interest capitalised within development expenditure during the financial year amounted to $41,249,000 (2021: $42,027,000).
The Group has mortgaged certain investment properties of carrying value amounting to $1,913,364,000 as at 31 December 2022 (2021:
$1,875,368,000) to banks for loan facilities (Note 23).
During the year, the Group reclassified $nil (2021: $3,544,000) 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
Group
2022
Net Book Value
At 1 January
Additions
Subsidiaries acquired
Depreciation
- from continuing operations
- from discontinued operations
Subsidiaries disposed
Write-off
Remeasurement
Reclassification
- Fixed assets (Note 7)
- Disposal group and assets classified as held for sale (Note 37)
- Other right-of-use assets categories
Exchange differences
At 31 December
Leasehold
Land &
Buildings
$’000
Plant,
Machinery,
Equipment
& Others(1)
$’000
Base
Station
Sites
$’000
Total
$’000
501,956
24,045
226
(35,806)
(9,594)
(32,753)
(524)
17,375
148
(253,063)
408
1,210
5,230
952
-
(2,057)
(95)
(727)
-
-
-
(57)
6
(95)
22,030
6,885
-
(4,234)
-
-
-
-
-
-
(414)
-
529,216
31,882
226
(42,097)
(9,689)
(33,480)
(524)
17,375
148
(253,120)
-
1,115
213,628
3,157
24,267
241,052
Annual Report 2022
175
Notes to the Financial Statements
9.
Right-of-use assets (leases) (continued)
Group
2021
Net Book Value
At 1 January
Additions
Depreciation
- from continuing operations
- from discontinued operations
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
Leasehold
Land &
Buildings
$’000
Plant,
Machinery,
Equipment
& Others(1)
$’000
553,983
70,558
(33,880)
(30,048)
(271)
(5,452)
(24,282)
(32,192)
(27)
3,567
5,048
2,910
(2,291)
(375)
-
(43)
-
-
27
(46)
Base
Station
Sites
$’000
23,675
2,353
(3,584)
-
-
-
-
-
-
(414)
Total
$’000
582,706
75,821
(39,755)
(30,423)
(271)
(5,495)
(24,282)
(32,192)
-
3,107
501,956
5,230
22,030
529,216
(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 $58,000 (2021: $4,742,000).
Total cash outflow for all the leases was $106,546,000 (2021: $99,894,000), comprising repayment of principal of $82,641,000 (2021:
$68,573,000) and interest payment of $23,905,000 (2021: $31,321,000).
Certain right-of-use assets with carrying amount of $nil (2021: $10,520,000) are mortgaged to banks for loan facilities (Note 23).
Company
2022
Net Book Value
At 1 January
Depreciation
Additions
At 31 December
2021
Net Book Value
At 1 January
Depreciation
Additions
Remeasurement
At 31 December
Leasehold
Land &
Buildings
$’000
Plant,
Machinery,
Equipment
& Others(2)
$’000
15,102
(3,669)
147
11,580
11,031
(3,727)
338
7,460
15,102
129
(72)
22
79
173
(72)
28
-
129
Total
$’000
15,231
(3,741)
169
11,659
11,204
(3,799)
366
7,460
15,231
(2) Others comprise office equipment.
Total cash outflow for all the leases was $4,225,000 (2021: $4,211,000), comprising repayment of principal of $3,875,000 (2021:
$3,885,000) and $350,000 interest payment (2021: $326,000).
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
176
Keppel Corporation Limited
Group
2022
$’000
3,315
212
404
2021
$’000
10,247
588
666
Financial Report
As at 31 December 2022, future cash outflows to which the Group is potentially exposed that are not reflected in the measurement
of lease liabilities include variable lease payments, $24,890,000 (2021: $609,797,000) for extension options and $55,243,000 (2021:
$57,086,000) for committed leases which have yet to commence.
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
2022
$’000
38,111
33,085
55,781
154,365
2021
$’000
99,392
89,607
205,571
366,435
2022
$’000
4,205
4,031
4,945
-
2021
$’000
4,181
4,137
8,941
-
281,342
761,005
13,181
17,259
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
Group
2022
$’000
70,734
62,569
42,880
24,002
15,852
47,388
2021
$’000
75,685
68,125
54,012
30,662
20,885
62,347
263,425
311,716
The Group entered into leasing arrangement with customers for certain equipment as a manufacturer lessor and built-to-suit data
centre for a customer. The lease is classified as finance lease as the customers have an option to purchase the underlying asset at
a price that is expected to be sufficiently lower than the fair value at the date the option becomes exercisable for it to be reasonably
certain, at the inception date, that the option will be exercised.
The asset relating to the finance lease is derecognised and the net investment in the lease is recognised under lease receivables
(Note 13).
The Group has 6 jack-up oil rigs within the disposal group held for sale which has entered into bareboat charter contracts for a period of
three to five years with total undiscounted lease receivable of $268,460,000 (Note 37).
The following table shows the maturity analysis of the undiscounted lease payments to be received:
Within one year
In the second year
In the third year
In the fourth year
In the fifth year
After the fifth year
Total
Group
2022
$’000
11,418
11,602
11,697
76,797
1,937
15,106
128,557
2021
$’000
375
375
375
374
374
3,352
5,225
Annual Report 2022
177
Notes to the Financial Statements
10. Subsidiaries
Quoted shares, at cost
Market value: $6,111,000 (2021: $5,750,000)
Unquoted shares, at cost
Provision for impairment
Movements in the provision for impairment of subsidiaries are as follows:
At 1 January
Charge to profit or loss
Disposal
Write-back
At 31 December
Company
2022
$’000
2021
$’000
493
7,633,512
7,634,005
493
8,442,349
8,442,842
(445,612)
(449,056)
7,188,393
7,993,786
Company
2022
$’000
449,056
-
(3,000)
(444)
2021
$’000
480,569
18,487
-
(50,000)
445,612
449,056
In 2018, Keppel FELS Limited and Keppel Shipyard Limited, both indirect wholly owned subsidiaries of the Company, issued fixed rate
senior perpetual securities (the “perpetual securities”) with an aggregate principal amount of $2,000,000,000 to Kepinvest Holdings Pte
Ltd, a direct wholly owned subsidiary of the Company.
During the financial year ended 31 December 2022,
(a)
(b)
the perpetual securities amounting to $2,364,876,000 have been novated from Kepinvest Holdings Pte Ltd to the Company and
were classified as an investment in subsidiaries by the Company; and
unquoted shares in Keppel Offshore & Marine Ltd (“KOM”) amounting to $801,720,000 and perpetual securities relating to the
KOM group as described above, amounting to a total of $3,166,596,000, have been reclassified to “Disposal group and assets
classified as held for sale” on the balance sheet of the Company.
The above transactions were for the purposes of undertaking an internal restructuring of KOM (the “KOM Pre-Combination
Restructuring”) to effect the Proposed Combination as mentioned in Note 37.
Impairment of $18,487,000 made for the financial year ended 31 December 2021 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 13, 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.
For the financial year ended 31 December 2021, provision of impairment amounting to $50,000,000 was written-back as a result
of increase in the estimated recoverable amount of subsidiaries mainly attributable to fair value gains from investments held by
subsidiaries. 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, which approximates fair value. This is a Level 3 fair value measurement.
Information relating to significant subsidiaries consolidated in the financial statements is given in Note 40.
178
Keppel Corporation Limited
Financial Report
11. Associated companies and joint ventures
Quoted shares, at cost
Market value: $2,302,422,000 (2021: $2,981,536,000)
Unquoted shares, at cost
Provision for impairment
Share of reserves post acquisition
Carrying amount
Unquoted shares, at fair value through profit or loss
Notes issued by an associated company
Advances to associated companies and joint ventures
Group
2022
$’000
2021
$’000
2,304,848
3,454,664
5,759,512
2,277,137
3,006,644
5,283,781
(112,004)
(144,005)
5,647,508
5,139,776
476,094
393,681
6,123,602
5,533,457
246,677
245,000
176,583
142,238
245,000
129,563
6,791,862
6,050,258
Notes issued by an associated company of $245,000,000 are unsecured and will mature in 2040. Interest is charged at 17.5% (2021:
17.5%) per annum.
Advances to associated companies and joint ventures are unsecured and are not repayable within the next 12 months. Interest is
charged at 3.0% to 11.0% (2021: 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 and liquidation
Reclassification to
-
Investments
- Disposal group and assets classified as held for sale
At 31 December
Group
2022
$’000
144,005
1,000
(26,900)
-
(6,101)
2021
$’000
152,509
-
(674)
(7,830)
-
112,004
144,005
Impairment loss made during the current year mainly relates to the shortfall between the carrying amount of the costs of investment
and the recoverable amount of an associated company.
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
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)
2022
$’000
2021
$’000
2,085,919
1,953,614
496,454
618,968
254,503
470,649
673,007
262,146
3,336,018
2,690,842
6,791,862
6,050,258
Annual Report 2022
179
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
2022
$’000
795,861
8,085,514
8,881,375
714,266
2,301,805
3,016,071
5,865,304
(746,388)
5,118,916
47%
2,390,022
(304,103)
2,085,919
219,286
448,403
18,690
467,093
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
1,590,158
101,123
1,943,429
98,865
**
Based on the quoted market price at 31 December (Level 1 in the fair value hierarchy).
As at 31 December 2022 and 31 December 2021, the fair value of Keppel REIT was below the carrying amount of the Group’s
effective ownership interest. Management is of the view that no impairment is required as it is held for long term and its
recoverable amount approximates the carrying amount.
(b) 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).
180
Keppel Corporation Limited
2022
$’000
262,606
3,845,057
4,107,663
244,640
1,406,105
1,650,745
2,456,918
(42,800)
2,414,118
20%
485,721
10,733
496,454
277,322
234,174
29,804
263,978
612,172
22,380
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
Financial Report
(c) 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
(d)
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
Revenue
Profit/(Loss) after tax
Other comprehensive loss
Total comprehensive income/(loss)
Dividends received
2022
$’000
1,243,193
503,634
1,746,827
460,153
17,747
477,900
1,268,927
50%
634,464
(15,496)
618,968
32,077
6,482
-
6,482
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
-
21,162
2022
$’000
108,842
828,485
937,327
54,965
372,540
427,505
509,822
50%
254,503
254,503
230,772
(15,122)
-
2021
$’000
88,287
878,785
967,072
52,381
389,559
441,940
525,132
50%
262,146
262,146
127,016
322,163
(3)
(15,122)
322,160
-
-
Apart from the equity interest in Floatel, the Group has exposure for a guarantee in relation to a bilateral agreement between the
Group and financial institutions, on a revolving credit facility granted to Floatel, as disclosed in Note 33.
(e) 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 – continuing operations
Share of results – discontinued operations
Share of other comprehensive income/(loss)
Share of total comprehensive income
2022
$’000
290,426
4,420
(150,486)
144,360
2021
$’000
106,139
8,135
72,324
186,598
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.
Annual Report 2022
181
Notes to the Financial Statements
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 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
2022
$’000
2021
$’000
Company
2022
$’000
2021
$’000
490,886
3,820
78,561
-
109,381
90,746
773,394
34,618
622,449
52,258
709,325
495,432
6,878
70,871
28,120
27,032
100,029
728,362
71,314
547,849
100,139
719,302
-
-
-
-
19,430
24,100
-
-
-
-
-
-
19,430
24,100
-
-
-
-
-
-
-
-
Total investments
1,482,719
1,447,664
19,430
24,100
In prior year, unquoted investments at fair value through profit or loss included a bond amounting to $20,791,000 bearing interest at 4%
per annum which is maturing in 2027. For the financial year ended 31 December 2022, the balance has been reclassified to disposal
group and assets classified as held for sale (Note 37).
Unquoted investments at fair value through profit or loss included compulsorily convertible debentures amounting to $46,821,000
(2021: $74,034,000). During the year, the Group has converted 5,035,464 of the compulsorily convertible debentures held into equity
shares at a conversion rate of 1:1 amounting to INR 1,280 million (approximately $22.7 million). The remaining compulsorily convertible
debentures bear interest at 10.0% per annum which is maturing in 2040.
13. Long term assets
Call option
Finance lease receivables
Trade receivables
Other receivables
Group
2022
$’000
192,522
93,339
-
212,675
2021
$’000
171,520
3,473
791,952
235,037
Company
2022
$’000
-
-
-
2021
$’000
-
-
-
70,252
94,161
498,536
1,201,982
70,252
94,161
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 2022, 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 839-year leasehold and 88-year leasehold (2021: based on the remaining 840-year
leasehold and 89-year leasehold). The details of the valuation techniques and inputs used for the call option are disclosed in Note 35.
Trade receivables are related to financing arrangements for delivered rigs where the Group has retained title. As noted in Note 2.28(b)
(i), the trade receivables have been presented in the balance sheet as “Disposal group classified as held for sale” following the
definitive agreements for the proposed combination of Keppel O&M and Sembcorp Marine and for the sale of Keppel O&M’s legacy
rigs and associated receivables to a new and separate entity. In 2021, $377,660,000 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. In the prior year, the
Group recognised an expected credit loss allowance of $75,952,000 on the trade receivables as detailed in Note 2.28(b)(i)(a)(ii). As at 1
January 2021, the Group’s long term trade receivables amounted to $875,810,000.
182
Keppel Corporation Limited
Financial Report
Included in other receivables is a secured loan receivable due from KrisEnergy Asia Limited (“KAL”), a company under receivership.
The Company had provided a guarantee, which was in relation to a bilateral agreement between the Company and a bank, on a
revolving credit facility (RCF) granted to KAL. KAL defaulted on the repayment of the RCF on 30 June 2021, on which the Company
had made payment to the bank and recorded a loan receivable (net of impairment provision) from KAL. As at 31 December 2022, the
loan receivable under the RCF amounted to $109,601,000 (31 December 2021: $109,513,000). In addition, the Company had extended
a short term interest free bridging facility to KAL (in receivership) for the purpose of its cash flow requirements and receivership
expenses which amounted to $5,197,000 as at 31 December 2022 (31 December 2021: $5,876,000). The non-current portion of the
loan receivable and advances amounted to $69,657,000 (31 December 2021: $93,311,000) while the current portion amounted to
$45,141,000 (31 December 2021: $22,078,000) which is included under Debtors (Note 18).
The Group had a comprehensive first ranking security package over the assets of the KrisEnergy Limited group (“KrisEnergy”)
through the RCF. With KrisEnergy Limited in liquidation, the Group has implemented detailed recovery plans which were developed in
consultation with its financial advisor, Borrelli Walsh (now “Kroll”), and legal advisor to preserve KrisEnergy’s assets and to maximise
recoveries for the Group. The Group had appointed Kroll in 2021 as receiver over the assets of a number of members of the KrisEnergy
group under the security package.
In assessing expected credit loss, management had reviewed the cash flow projections prepared by Kroll, based on the estimated
amount of cash available from producing assets to be held over the remaining lives of the concession period of 7.5 to 11 years
(2021: 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$80 to US$97 per barrel for 2023 to
2032 (December 2021: US$67 to US$73 from 2022 to 2033). 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, oil prices and discount rates
used in assessing recoverable amounts are subject to risk and uncertainty.
Based on the assessment, no additional expected credit loss provision was required for the year ended 31 December 2022. The
assessment took into account the rights to the cash flows from the secured assets on a receivership basis.
In the financial year ended 31 December 2021, management had performed an assessment on the Group’s exposure to KrisEnergy and
an impairment provision of $317,999,000 was recognised. 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 (previously presented as part of investment in associated companies) of $35,084,000.
Management had reviewed the cash flow projections prepared by Kroll and determined that the cash flow projections are most
sensitive to oil prices for the financial year ended 31 December 2022. The headroom in the recoverable amount over the carrying
amount would be eliminated if oil prices were to decrease by 9.1% across the forecasted period of 2023 to 2032, and any further decline
in oil prices would result in an additional expected credit loss provision for the financial year ended 31 December 2022.
For the financial year ended 31 December 2021, the cash flow projections were most sensitive to the timing of trapped cash. The
existing cash from one of the producing assets under the security package have been withheld as the operator of this asset is seeking
clarity from the regulator on the estimated decommissioning security required to cover the decommissioning costs for the asset at the
end of field life in 2031. A study on the estimated decommissioning costs had been completed and submitted to the regulator in 2022.
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 expected credit loss provision for the financial year ended 31 December 2021.
Included in other receivables is an unsecured, interest-free advance to an investee amounted to $19,804,000 (2021: $19,788,000), which
matures on 31 December 2024.
Included in other receivables is claims receivable which represents claims from customer for long term contracts. During the year, the
Group recognised $9,089,000 (2021: $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.
The carrying amount of the long term assets approximates their fair value.
Annual Report 2022
183
Notes to the Financial Statements
14.
Intangibles
Group
2022
At 1 January
Additions
Acquisition of subsidiaries
Disposal of a subsidiary
Disposals
Amortisation
- from continuing operations
- from discontinued operations
Reclassification
- Disposal group and assets
classified as held for sale
Exchange differences
Goodwill
$’000
Development
Expenditure
$’000
Brand
$’000
Customer
Spectrum Contracts and
Rights Relationships
$’000
$’000
Others
$’000
Total
$’000
1,047,558
13,685
251,349
132,176
122,253
22,251
1,589,272
-
-
-
-
-
-
424
-
(1,275)
(52)
(777)
(216)
(5,070)
(6,685)
-
(96)
-
-
-
-
26,252
-
-
-
-
10,767
-
-
-
32
-
-
26,676
10,799
(1,275)
(52)
(9,252)
(15,686)
(22,143)
(400)
(48,258)
-
-
-
-
-
-
-
-
(380)
-
(216)
-
(1)
(11,755)
(477)
At 31 December
1,042,488
5,008
242,097
142,742
110,497
21,882
1,564,714
Cost
1,042,488
12,723
277,563
183,787
210,517
22,577
1,749,655
Accumulated amortisation
-
(7,715)
(35,466)
(41,045)
(100,020)
(695)
(184,941)
1,042,488
5,008
242,097
142,742
110,497
21,882
1,564,714
2021
At 1 January
Additions
Amortisation
- from continuing operations
- from discontinued operations
Reclassification
Exchange differences
-
-
-
-
-
1,047,558
16,749
260,601
910
-
124,553
27,504
141,652
17,711
1,608,824
-
4,673
33,087
(1,017)
(645)
(2,558)
246
(9,252)
(19,881)
(21,957)
(133)
(52,240)
-
-
-
-
-
-
-
2,558
-
-
-
-
(645)
-
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
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 $1,042,488,000, 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% (2021: 1.48%), premised on the estimated long term growth rate for the country where the CGU operates. Cash
flows were discounted using a discount rate of 7.9% (2021: 7%) per annum.
The recoverable amount was estimated to be higher than the carrying value of the M1 Limited CGU. Accordingly, no impairment of
goodwill was recognised in 2022 and 2021. The calculation of value-in-use for the CGU is sensitive to the terminal growth rate and the
discount rate applied. If the discount rate were to increase by 1.1%, the recoverable amount would decrease and equate the carrying
amount, and any further increase in discount rate would result in impairment for the financial year ended 31 December 2022.
184
Keppel Corporation Limited
Financial Report
15. Stocks
Consumable materials and supplies (net of provision)
Finished products for sale (net of provision)
Work-in-progress (net of provision)
Properties held for sale
Group
2022
$’000
24,521
40,954
-
(a)
2,235,475
2021
$’000
227,224
82,651
1,289,838
3,004,272
2,300,950
4,603,985
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. For the financial year ended 31 December 2022, the work-in-progress balance has been
reclassified to disposal group and assets classified as held for sale (Note 37). The provision for stocks to write down its carrying value
to its net realisable value at the end of the financial year was $12,080,000 (2021: $177,220,000).
(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 or loss account
Exchange differences
Amount written off
At 31 December
Group
2022
$’000
2021
$’000
1,035,952
1,688,380
370,187
201,881
526,584
210,084
1,608,020
2,425,048
646,795
600,140
2,254,815
3,025,188
(19,340)
(20,916)
2,235,475
3,004,272
Group
2022
$’000
20,916
76
(1,823)
171
2021
$’000
19,987
583
452
(106)
19,340
20,916
See Note 2.28(b)(viii) for further disclosures on estimating NRV of the Group’s properties held for sale.
As at 31 December 2022, properties amounting to $248,990,000 (2021: $220,556,000) in value and included in the above balances were
mortgaged to the banks as securities for borrowings as referred to in Note 23.
Interest capitalised during the financial year amounted to $10,646,000 (2021: $17,499,000) at rates of 0.95% to 4.71% (2021: 0.79% to
0.95%) per annum for Singapore properties and 2.00% to 7.00% (2021: 1.50% to 7.00%) per annum for overseas properties.
In 2021, the Group reclassified $3,544,000 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 from fixed asset to
properties held for sale due to change of use of the assets.
Annual Report 2022
185
Notes to the Financial Statements
16. Contract assets/liabilities
Non-current
Current
Contract assets
Contract liabilities
Group
31 December
2022
$’000
86,411
255,900
342,311
2021
$’000
99,109
3,169,694
3,268,803
1 January
2021
$’000
73,458
2,657,231
2,730,689
209,770
1,002,024
2,072,303
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 $572,179,000 (2021: $1,707,190,000) has been reclassified to disposal group and assets classified as
held for sale.
Contract liabilities included proceeds received from sale of properties of $153,487,000 (2021: $535,334,000). Remaining contract
liabilities of $56,283,000 (2021: $466,690,000) 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 2022 in relation to contract liability balance at 1 January 2022 was
$882,597,000 (2021: $1,358,302,000).
The aggregate amount of the transaction price allocated to the remaining performance obligations is $1,001,841,000 (2021:
$6,047,351,000) and the Group expects to recognise this revenue over the next 1 to 3 years (2021: 1 to 4 years).
Movements in the allowance for expected credit loss for contract assets are as follows:
At 1 January
Charge to profit or loss account (Note 27)
- from continuing operations
- from discontinued operations
Amount utilised
Reclassification
- Stocks - work-in-progress (Note 15)
- Disposal group and assets classified as held for sale
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 or loss account
Write-off
At 31 December
Group
31 December
2022
$’000
2021
$’000
1 January
2021
$’000
432,541
432,541
21,000
-
-
-
-
(432,541)
-
23,225
-
(23,225)
-
-
432,541
-
430,842
-
(19,301)
-
432,541
Company
2022
$’000
2021
$’000
143,837
7,543,926
7,687,763
(141,143)
104,390
9,893,770
9,998,160
(145,251)
7,546,620
9,852,909
3,555
269,508
9,820
165,982
273,063
175,802
145,251
279
(4,387)
6,600
138,651
-
141,143
145,251
Advances to and from subsidiaries are unsecured and are repayable on demand. Interest is charged at rates up to 5.84% (2021: up to
4.00%) per annum on interest-bearing advances.
186
Keppel Corporation Limited
Financial Report
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 or loss account
Reclassified to disposal group and assets classified as held for sale
At 31 December
Group
2022
$’000
2021
$’000
Company
2022
$’000
2021
$’000
39,037
239,254
278,291
(16,223)
169,612
431,854
601,466
(31,800)
262,068
569,666
33,692
36,171
44,017
242,068
69,863
286,085
31,800
1,506
(17,083)
16,888
14,912
-
16,223
31,800
202
-
202
-
202
900
-
900
-
-
-
-
32
-
32
-
32
882
-
882
-
-
-
-
Advances to and from associated companies and joint ventures are unsecured and are repayable on demand. Interest is charged at
rates ranging from 3.00% to 8.00% (2021: 0.05% to 13.00%) per annum on interest-bearing advances.
As at 1 January 2021, the Group’s amount due from associated companies and joint ventures relating to trade amounted to
$160,987,000.
18. Debtors
Trade debtors
Allowance for expected credit loss
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
Company
2022
$’000
661,671
(29,163)
632,508
119,694
78,428
1,237
75,519
1,712
44,559
36,542
357,787
604
6,583
722,665
2021
$’000
1,218,664
(233,267)
985,397
370,305
129,802
7,755
103,382
25,973
251,307
62,337
361,846
19,340
4,375
1,336,422
(115,875)
606,790
(131,129)
1,205,293
2022
$’000
20
-
20
45,795
12
-
179
-
385
4,849
7,671
- 8
-
58,891
-
58,891
Total
1,239,298
2,190,690
58,911
Movements in the allowance for expected credit loss are as follows:
At 1 January
Charge to profit or loss account
Amount written off
Subsidiaries acquired
Subsidiaries disposed
Exchange differences
Reclassified to disposal group and assets classified as held for sale
Total
364,396
26,986
(10,998)
1,265
(1,801)
810
(235,620)
259,345
113,379
(15,966)
-
-
7,638
-
145,038
364,396
-
-
-
-
-
-
-
-
As at 1 January 2021, the Group’s net trade debtors amounted to $1,564,398,000.
2021
$’000
26
-
26
22,804
87
-
32
-
382
5,637
3,073
-
32,023
-
32,023
32,049
-
-
-
-
-
-
-
-
Annual Report 2022
187
Notes to the Financial Statements
19. Short term investments
Investments at fair value through other comprehensive income:
Quoted equity shares
Investments at fair value through profit or loss:
Quoted equity shares
Total short term investments
Group
2022
$’000
2021
$’000
48,097
26,834
685
269
48,782
27,103
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
Company
2022
$’000
657,790
369,653
2021
$’000
1,976,981
1,348,400
6,290
72,991
108,611
218,261
2022
$’000
1,232
-
-
-
2021
$’000
810
-
-
-
1,142,344
3,616,633
1,232
810
Fixed deposits with banks of the Group mature on varying periods, substantially between 1 day to 6 months (2021: 3 days to 6 months).
This comprises Singapore Dollars fixed deposits of $81,303,000 (2021: $268,451,000) at interest rates substantially ranging from 2.61%
to 3.93% (2021: 0.05% to 0.25%) per annum, and foreign currency fixed deposits of $288,350,000 (2021: $1,079,949,000) at interest
rates substantially ranging from 0.32% to 9.2% (2021: 0.10% to 5.40%) per annum.
Cash and cash equivalents of $328,052,000 (2021: $1,013,296,000) 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
Advances from non-controlling shareholders
Group
Company
2022
$’000
372,380
104,535
322,887
2021
$’000
763,233
85,277
905,520
1,787,731
2,928,665
17,735
122,092
41,460
21,800
187,078
46,213
2022
$’000
1,005
-
4,273
60,654
-
-
2021
$’000
1,643
-
5,186
57,514
-
-
23,153
28,180
2,768,820
4,937,786
89,085
92,523
301,563
255,975
111,142
142,015
29,228
32,187
-
-
557,538
253,157
29,228
32,187
Advances from non-controlling shareholders of certain subsidiaries are unsecured and are repayable on demand. Interest is charged at
rates ranging from 1.65% to 5.24% (2021: 0.50% to 3.62%) per annum on interest-bearing advances.
The carrying amount of the non-current liabilities approximates their fair value.
188
Keppel Corporation Limited
Financial Report
22. Provisions
At 1 January
(Write-back)/Charge to profit
or loss account
Amount utilised
Exchange differences
Reclassified to disposal group and
liabilities classified as held for sale
Warranties
$’000
28,932
(5,986)
(6,871)
(931)
2022
Onerous
Contract
$’000
37,831
63,457
(27,887)
(303)
Group
Total
$’000
Warranties
$’000
66,763
39,449
57,471
(34,758)
(1,234)
(9,866)
(252)
(399)
(10,966)
(18,831)
(29,797)
-
2021
Onerous
Contract
$’000
27,290
186,859
(176,318)
-
-
Total
$’000
66,739
176,993
(176,570)
(399)
-
At 31 December
4,178
54,267
58,445
28,932
37,831
66,763
23. Term loans
Group
Keppel Corporation Medium Term Notes
Keppel Land Medium Term Notes
Keppel Telecommunications & Transportation
Medium Term Notes
Keppel Corporation Commercial Papers
Bank loans
- secured
- unsecured
Company
Keppel Corporation Medium Term Notes
Keppel Corporation Commercial Papers
Unsecured bank loans
2022
2021
Due within
one year
$’000
Due after
one year
$’000
Due within
one year
$’000
Due after
one year
$’000
200,000
299,979
1,817,864
409,619
700,000
199,978
2,053,710
709,403
-
35,996
-
-
-
100,000
128,000
-
127,393
554,291
8,852
717,559
2,914,290
3,821,412
3,622,478
3,215,240
3,577,658
6,603,186
4,659,308
6,795,912
200,000
35,996
1,817,864
-
700,000
128,000
2,053,710
-
2,553,305
2,226,120
2,498,730
2,059,985
2,789,301
4,043,984
3,326,730
4,113,695
(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 $2,017,864,000 (2021: $2,753,710,000). The notes denominated in Singapore Dollars, US Dollars and
Japanese Yen, are unsecured and comprised fixed rate notes due from 2023 to 2042 (2021: from 2022 to 2042) with interest
rates ranging from 0.88% to 4.00% (2021: 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 $579,672,000 (2021:
$579,518,000). The notes denominated in Singapore Dollars, are unsecured and comprised fixed rate notes due from 2023 to
2026 (2021: 2023 to 2026), with interest rates ranging from 2.00% to 2.84% (2021: 2.00% 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 $129,926,000 (2021: $329,863,000). The notes denominated in Singapore Dollars, are unsecured and
comprised fixed rate notes due in 2024 (2021: 2022 to 2024) with interest rates of 3.90% (2021: 3.80% to 3.90%) per annum.
At the end of 2021 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. 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. The MTN has since been fully redeemed and cancelled on 5 September 2022.
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 $35,996,000 (2021: $128,000,000). The commercial papers, which are denominated
in Singapore Dollars, are unsecured and comprised fixed rate commercial papers due in 2023 (2021: 2022) with interest rate of
0.90% (2021: 0.58% to 0.64%) per annum.
Annual Report 2022
189
Notes to the Financial Statements
23. Term loans (continued)
(e)
The secured bank loans consist of:
-
-
-
-
-
A term loan of $39,615,000 drawn down by a subsidiary. The term loan is repayable in 2027 and is secured on certain
assets of the subsidiary and bear interest at rate of 18.25% per annum.
A term loan of $71,428,000 drawn down by a subsidiary. The term loan is repayable in 2023 and is secured on certain
assets of the subsidiary and bear interest at rates of 0.95% to 4.71% per annum.
A term loan of $76,561,000 drawn down by a subsidiary. The term loan is repayable in 2024 and is secured on certain
assets of the subsidiary and bear interest at rate of 4.68% per annum.
A term loan of $433,849,000 drawn down by a subsidiary. The term loan is repayable in 2034 and is secured on certain
assets of the subsidiary and bear interest at rates of 3.96% to 4.31% per annum.
Other secured bank loans totaling $60,231,000 (2021: $222,695,000) comprised $38,572,000 (2021: $92,264,000) of loans
denominated in Singapore Dollars and $21,659,000 (2021: $130,431,000) of foreign currency loans. They are repayable
within one to six (2021: one to six) years and are secured on investment properties and certain fixed and other assets of
the subsidiaries. Interest on foreign currency loans ranges from 3.80% to 16.00% (2021: 3.90% to 13.25%) per annum.
(f)
The unsecured bank loans of the Group totaling $6,735,702,000 (2021: $6,837,718,000) comprised $2,973,178,000 (2021:
$2,768,820,000) of loans denominated in Singapore Dollars and $3,762,524,000 (2021: $4,068,898,000) of foreign currency loans.
They are repayable within one to six (2021: one to ten) years. Interest on loans denominated in Singapore Dollars ranges from
0.71% to 5.05% (2021: 0.67% to 3.05%) per annum. Interest on foreign currency loans ranges from 0.50% to 7.85% (2021: 0.06%
to 10.95%) per annum.
The unsecured bank loans of the Company totaling $4,779,425,000 (2021: $4,558,715,000) comprised $1,360,000,000 (2021:
$1,280,000,000) of loans denominated in Singapore Dollars and $3,419,425,000 (2021: $3,278,715,000) of foreign currency loans.
They are repayable within one to five years (2021: one to four years). Interest on loans denominated in Singapore Dollars ranges
from 0.71% to 5.03% (2021: 0.71% to 1.28%) per annum. Interest on foreign currency loans ranges from 0.50% to 5.84% (2021:
0.06% to 1.46%) per annum.
The Group has mortgaged certain properties and assets of up to an aggregate amount of $2,165,124,000 (2021: $2,223,200,000) to
banks for loan facilities.
The fair values of term loans for the Group and Company are $9,805,129,000 (2021: $11,304,660,000) and $6,498,043,000 (2021:
$7,312,908,000) 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
2022
$’000
2021
$’000
Company
2022
$’000
2021
$’000
1,859,527
3,671,418
1,072,241
1,652,688
3,929,770
1,213,454
842,710
889,922
2,551,274
2,476,893
650,000
746,880
6,603,186
6,795,912
4,043,984
4,113,695
190
Keppel Corporation Limited
Financial Report
24. Deferred taxation
Deferred tax liabilities
Deferred tax assets
Net deferred tax liabilities
Group
2022
$’000
368,031
(87,624)
2021
$’000
426,891
(212,679)
280,407
214,212
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 $13,434,000 (2021: $41,815,000) for taxes that would be payable on the
undistributed earnings of certain subsidiaries 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 unrecognised deferred tax liabilities of $10,970,000 (2021: $14,632,000) for taxes that would be payable on the
undistributed earnings of certain associated companies as these earnings would not be distributed in the foreseeable future.
The Group has unutilised tax losses and capital allowances of $681,521,000 (2021: $1,035,843,000) 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 $337,067,000 (2021: $276,311,000) can be carried
forward for a period of one to nine 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:
Charged/
(credited)
to other
comprehen-
sive
income
$’000
Net
subsidiaries
acquired/
disposed
$’000
Reclassifi-
cation to
liabilities
directly
associated
with assets
classified as
held for sale
$’000
At
1 January
$’000
Charged/
(credited) to
profit or loss
$’000
Exchange
differences
$’000
At
31 December
$’000
Group
2022
Deferred Tax Liabilities
Accelerated tax depreciation
Investment properties valuation
Offshore income & others
Total
Deferred Tax Assets
Other provisions
Unutilised tax benefits
Lease liabilities
Total
202,506
170,157
87,242
459,905
(117,525)
(110,590)
(17,578)
(245,693)
(1,065)
32,162
(6,782)
24,315
(9,462)
10,314
765
1,617
Net Deferred Tax Liabilities
214,212
25,932
-
-
-
-
-
-
-
-
-
803
-
(32,801)
(31,998)
(56,962)
-
(6,156)
(63,118)
(1,099)
(18,342)
(3,031)
(22,472)
144,183
183,977
38,472
366,632
546
-
3,557
4,103
100,412
32,941
16,574
149,927
450
4,609
(1,238)
3,821
(25,579)
(62,726)
2,080
(86,225)
(27,895)
86,809
(18,651)
280,407
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
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)
(3,099)
(20,523)
1,785
(21,837)
-
-
-
-
-
-
-
-
Net Deferred Tax Liabilities
284,120
(71,806)
(108)
(4,224)
-
-
-
-
-
-
-
-
-
2,399
7,237
3,669
13,305
(1,323)
(5,854)
102
(7,075)
202,506
170,157
87,242
459,905
(117,525)
(110,590)
(17,578)
(245,693)
6,230
214,212
Annual Report 2022
191
Notes to the Financial Statements
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 from continuing operations is arrived at after charging/(crediting) the following:
Included in materials and subcontract costs:
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 (Note 13)
#
Comparative information has been re-presented due to a discontinued operation (Note 37).
192
Keppel Corporation Limited
Group
2022
$’000
2021#
$’000
410,181
809,744
456,207
350,734
1,538,477
391,112
3,637,267
3,050,539
738,233
494,579
702,263
503,295
6,546,211
6,536,420
73,507
74,916
6,619,718
6,611,336
Group
2022
$’000
2021#
$’000
515,838
517,636
57,892
43,403
50,745
54,792
37,369
55,372
667,878
665,169
Group
2022
$’000
2021#
$’000
948,116
1,380,717
32,669
32,507
15,182
89
11,826
32,999
1,011
-
-
10,875
93
9,810
129,396
835
23,225
146,024
Financial Report
Included in other operating income - net:
Government grant income
Impairment of associated companies (Note 11 & 13)
Impairment/write-off of fixed and intangible assets
Provision for stocks
Fair value gain on investment properties (Note 8)
Fair value gain on
-
investments and associated companies
- forward foreign exchange contracts
Gain on differences in foreign exchange
(Gain)/Loss on sale of fixed assets
Gain on sale of investments
Gain on disposal of subsidiaries
Gain on disposal of associated companies and joint ventures
Loss from sale of interests in associated companies
Gain from change in interest in associated companies
Gain on acquisition of subsidiaries
Fair value gain on remeasurement of remaining interest in a joint venture
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
2022
$’000
2021#
$’000
(11,452)
(20,545)
1,000
1,171
6,939
35,082
53,345
1,279
(131,711)
(238,458)
(57,801)
(315,540)
-
(704)
639
(16)
(22,498)
(358)
40,168
(10,933)
(6,795)
-
2,487
3,037
2,105
603
193
(1,614)
(15,818)
(1,473)
(9,833)
(241,054)
(208,655)
-
(8,516)
-
(69,469)
2,282
2,257
1,719
1,881
209
^
Including the discontinued operations, the Group’s total auditors’ remuneration and non-audit fees paid amounts to $6,412,000 (2021: $5,502,000) and $803,000
(2021: $2,141,000) respectively.
Government grant income of $277,000 (2021: $8,047,000) 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.
In the prior year, 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, 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.
Loss from sale of interests in associated companies in the current year was mainly attributable to the loss on partial disposal of interest
in MET Holding AG.
#
Comparative information has been re-presented due to a discontinued operation (Note 37).
Annual Report 2022
193
Notes to the Financial Statements
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 on interest rate caps and swaps
29. Taxation
(a)
Income tax expense
Tax expense comprised:
Current tax – continuing operations
Adjustment for prior year’s tax
Others
Deferred tax (Note 24):
Current deferred tax – continuing operations
Adjustment for prior year’s tax
Land appreciation tax:
Current year
Taxation – continuing operations
Taxation – discontinued operations
#
Comparative information has been re-presented due to a discontinued operation (Note 37).
194
Keppel Corporation Limited
Group
2022
$’000
38,320
10,221
2021#
$’000
37,672
67,189
48,541
104,861
22,221
54,646
14,481
22,043
51,881
14,382
91,348
88,306
(137,098)
(10,262)
1,173
(161,590)
(10,082)
1,570
(146,187)
(170,102)
Group
2022
$’000
156,382
(13,105)
19,988
163,265
2021#
$’000
340,311
(33,162)
16,349
323,498
21,040
-
21,040
(56,592)
1,829
(54,763)
60,844
106,454
245,149
33,212
375,189
(50,205)
278,361
324,984
Financial Report
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 before tax – continuing operations
Profit/(loss) before tax – discontinued operations
Share of profit of associated companies and joint ventures,
net of tax – continuing operations
Share of profit of associated companies and joint ventures,
net of tax – discontinued operations
Profit before tax and share of profit of associated companies and joint ventures
Group
2022
$’000
2021#
$’000
1,094,888
1,611,153
116,278
(276,157)
(535,979)
(458,765)
(4,420)
670,767
(8,135)
868,096
114,030
(105,735)
180,037
82,901
(1,817)
(36,687)
60,844
(15,212)
147,576
(155,990)
217,497
26,387
45,128
(35,449)
106,454
(26,619)
278,361
324,984
245,149
33,212
375,189
(50,205)
278,361
324,984
Group
2022
$’000
505,479
(28,708)
171,589
(15,412)
60,844
2021
$’000
358,802
14,632
307,720
(34,238)
106,454
(444,462)
(259,964)
2,204
600
-
(2,182)
19,020
14,328
(12,164)
(73)
Company
2022
$’000
2021
$’000
39,651
29,155
-
7,356
(6,512)
-
2,974
-
-
44
-
-
8,474
(5,300)
-
7,290
-
-
32
-
Tax calculated at tax rate of 17% (2021: 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 deduction on land appreciation tax
Income tax expense – continuing operations
Income tax expense – discontinued operations
(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 acquired
Subsidiaries disposed
Reclassification
- tax recoverable and others
-
liabilities directly associated with assets
classified as held for sale
At 31 December
258,990
505,479
43,513
39,651
#
Comparative information has been re-presented due to a discontinued operation (Note 37).
Annual Report 2022
195
Notes to the Financial Statements
30. Earnings per ordinary share
Profit for the year from continuing operations
Profit/(loss) for the year from discontinued operations
Net profit attributable to shareholders of the company
Weighted average number of ordinary shares
(excluding treasury shares)
Adjustment for dilutive potential ordinary shares
Weighted average number of ordinary shares used to
compute earnings per share (excluding treasury shares)
Group
2022
$’000
2021#
$’000
Basic
Diluted
Basic
Diluted
838,959
87,658
926,617
838,959
87,658
926,617
1,247,468
1,247,468
(224,817)
(224,817)
1,022,651
1,022,651
Number of Shares
Number of Shares
‘000
‘000
1,777,509
1,777,509
1,820,424
1,820,424
-
17,785
-
10,447
1,777,509
1,795,294
1,820,424
1,830,871
Earnings per ordinary share - continuing operations
Earnings per ordinary share - discontinued operations
47.2 cts
4.9 cts
46.7 cts
4.9 cts
68.5 cts
(12.3) cts
68.1 cts
(12.2) cts
Earnings per ordinary share
52.1 cts
51.6 cts
56.2 cts
55.9 cts
31. Dividends
A final cash dividend of 18.0 cents per share tax exempt one-tier (2021: final cash dividend of 21.0 cents per share tax exempt one-tier)
in respect of the financial year ended 31 December 2022 has been proposed for approval by shareholders at the next annual general
meeting to be convened.
Together with the interim cash dividend of 15.0 cents per share tax exempt one-tier (2021: interim cash dividend of 12.0 cents per share
tax exempt one-tier), total distributions paid and proposed in respect of the financial year ended 31 December 2022 will be 33.0 cents
per share (2021: 33.0 cents per share).
During the financial year, the following distributions were made:
A final cash dividend of 21.0 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 15.0 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 $345,752,000 were made.
$’000
378,094
265,139
643,233
#
Comparative information has been re-presented due to a discontinued operation (Note 37).
196
Keppel Corporation Limited
Financial Report
32. Commitments
(a) Capital commitments
Group
2022
Continuing
Operations
$’000
Discontinued
Operations
$’000
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
379,342
936,048
275,861
1,055,105
65,598
674,065
242,905
140,609
3,769,533
2021
$’000
484,512
252,960
548,066
955,074
60,553
-
3,197
-
-
2,259
-
46,181
717,065
261,849
-
32,015
51,637
3,312,094
Less: Non-controlling shareholders’ share
(39,205)
-
(118,362)
3,730,328
51,637
3,193,732
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
Performance guarantees issued for contracts awarded
to customers and third parties
Performance guarantee in favour of a non-related
company in respect of performance on a contract
by a subsidiary, and a related guarantee in respect
of bank loan granted to a non-related party
Group
Company
2022
2021
2022
2021
Continuing
Operations
$’000
Discontinued
Operations
$’000
$’000
$’000
$’000
156,787
382,630
101,072
-
61,364
233,151
626,258
-
147,775
-
784,712
-
424,640
-
487,137
462,579
655,005
-
-
-
-
-
-
-
-
1,065,129
846,076
1,494,321
462,579
655,005
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 $82,551,000 (2021: $119,386,000). The
guarantee is secured on the assets of Floatel International Limited. See further details on the Group’s equity interest in Floatel in
Note 11(d).
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 2022
197
Notes to the Financial Statements
33. Contingent liabilities and guarantees (continued)
Claims and litigations relating to disposal group held for sale
Keppel Offshore & Marine’s Joint Resolution with Brazilian Authorities
On 19 December 2022, Keppel Offshore & Marine (“KOM”) reached a joint resolution with the authorities in Brazil, namely Brazilian
Attorney-General’s Office (“AGU”) and Comptroller General of the Union (“CGU”), in relation to the corrupt payments made by a
former agent of KOM in Brazil, which was previously announced in December 2017. Following KOM’s full cooperation with AGU’s and
CGU’s investigations, KOM entered into a leniency agreement with the two Brazilian authorities and committed to a total payment of
R$343,571,455.25 (equivalent to approximately US$65 million) in fines and damages. The Attorney-General’s Chambers of Singapore
(“AGC”) and the Corrupt Practices Investigation Bureau (“CPIB”) have confirmed that KOM may avail itself of the crediting of up to
US$52,777,122.50, pursuant to the terms of the CPIB Conditional Warning issued on 23 December 2017, in respect of the fines payable
by KOM to the Brazilian authorities and KOM has made full payment of the fines and damages payable under the leniency agreement
with the two authorities in January 2023. With the earlier leniency agreement with the MPF and this additional agreement, both of which
provide for the payment of fines and damages in connection to the same matter, KOM does not expect further grounds for liability in
Brazil in relation to these issues.
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 advice obtained from a legal counsel, there is a very low risk that the Court would award any damages to the Plaintiffs on
summary judgment. However, as to the trial itself, because the outcome of this matter and the potential amount of any loss are
uncertain and the legal counsel have not formed a conclusion that an unfavourable outcome is either probable or remote, the legal
counsel expressed no opinion as to the likelihood of an unfavourable outcome or as to the potential amount of loss.
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 disputes in respect of the First Contract and the Second Contract are in the midst of separate arbitration proceedings between the
parties.
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.
198
Keppel Corporation Limited
Financial Report
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, have denied the Claimant’s alleged right to such price reductions and the defective
equipment and have defended and challenged the Claims in the arbitration proceedings commenced by the Claimant and have sought
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 2022.
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
-
joint ventures
- other related parties
Purchase of goods and/or services from
- associated companies
-
joint ventures
- other related parties
Treasury transactions with
- associated companies
-
joint ventures
Group
2022
$’000
196,399
8,108
135,797
2021
$’000
138,885
592,784
143,829
340,304
875,498
255,653
57,705
209,060
266,007
14,331
177,859
522,418
458,197
3,207
7,822
11,029
1,401
7,349
8,750
Annual Report 2022
199
Notes to the Financial Statements
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
2022
Cashflow hedges
- Forward foreign currency contracts
- Cross currency swaps
-
Interest rate swaps
- HSFO forward contracts
- Dated Brent forward contracts
- JKM forward contracts
-
ICE Brent Crude forward contracts
- Electricity futures contracts
2021
Cashflow hedges
- Forward foreign currency contracts
- Cross currency swaps
-
Interest rate swaps
- HSFO forward contracts
- Dated Brent forward contracts
- Electricity futures contracts
Group
Fair Value
Asset
$’000
Liability
$’000
Notional
amount directly
impacted by
IBOR reform
$’000
14,384
17,300
186,983
23,897
20,436
-
13,214
1,998
47,386
387
26,343
113,369
24
27
27,480
121,836
n.a.
-
-
170,950
40,480
6,973
55,840
159
17,090
n.a.
n.a.
n.a.
n.a.
n.a.
21,652
55,955
32,094
1,710
224
237,763
n.a.
-
2,140,817
n.a.
n.a.
n.a.
Contract
notional
amount
$’000
2,589,650
1,466,863
3,378,334
165,978
344,615
124,232
63,530
28,815
5,329,496
1,200,775
3,912,772
400,325
6,951
94,691
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 JKM forward contracts
is determined using forward Japan/Korea Marker prices provided by the Group’s key counterparty. The fair value of ICE
Brent Crude forward contracts is determined using Intercontinental Exchange Brent Crude 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 $1,639,730,000 (2021: $4,956,170,000).
The net negative fair value of forward foreign exchange contracts is $8,983,000 (2021: net positive fair value of
$22,105,000) comprising assets of $9,533,000 (2021: $43,757,000) and liabilities of $18,515,000 (2021: $21,652,000).
These fair value amounts are recognised as derivative assets and derivative liabilities.
200
Keppel Corporation Limited
Financial Report
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:
2022
2021
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
109,316
801,896
614,770
1,525,982
189,401
2,742,038
-
2,931,439
48,866
-
100,261
149,127
107,477
-
227
107,704
Company
Financial Assets
Debtors
Bank balances, deposits & cash
Financial Liabilities
Creditors
Term loans
Lease liabilities
-
-
37
37
1,333
-
-
1,333
USD
$’000
-
420,402
420,402
14,752
2,742,038
-
2,756,790
8,219
43,461
-
51,680
2022
RMB
$’000
15
-
15
114
-
227
341
2,620
165,719
53,890
720,956
167,223
335,562
567,102
1,341,948
111,854
2,610,015
-
2,721,869
64,300
-
408,536
472,836
603
-
322
925
Others
$’000
USD
$’000
-
157,584
157,584
1,071
411,516
412,587
-
43,461
-
43,461
6,053
2,610,015
-
2,616,068
189
-
34
223
13,903
-
-
13,903
2021
RMB
$’000
58
-
58
122
-
322
444
4,402
125,455
210,797
340,654
8,189
130,674
1,729
140,592
Others
$’000
-
193,760
193,760
107
130,674
-
130,781
Sensitivity analysis for currency risk
If the relevant foreign currency change against SGD by 5% (2021: 5%) with all other variables held constant, the effects will
be as follows:
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
Profit before tax
2022
$’000
2021
$’000
Equity
2022
$’000
2021
$’000
(77,713)
77,713
2,071
(2,071)
(54)
54
(77,487)
77,487
23,596
(23,596)
(568)
568
(116,853)
116,853
(89,827)
89,827
(8)
8
(19)
19
7,419
(7,419)
8,315
(8,315)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Annual Report 2022
201
Notes to the Financial Statements
35. Financial risk management (continued)
(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”),
United States Dollar Secured Overnight Financing Rate (“USD SOFR”) and the United States Dollar London Inter-bank Offer
Rate (“USD LIBOR”) (2021: SOR, SORA and USD LIBOR) and pays fixed rates of between 0.06% and 3.62% (2021: 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, USD SOFR and USD LIBOR. This amounts to 32%
(2021: 30%) of the Group’s total amount of borrowings excluding notional amounts of $nil (2021: $470,419,000) relating to
highly probable future borrowings.
In 2021, there was a loss of $23,065,000 on hedge ineffectiveness in the Energy & Environment segment.
Sensitivity analysis for interest rate risk
If interest rates increase/decrease by 0.5% (2021: 0.5%) with all other variables held constant, the Group’s profit before tax
would have been lower/higher by $19,548,000 (2021: $17,560,000) 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, Dated Brent, JKM and ICE Brent Crude. As at the end of the financial year, the Group has outstanding HSFO,
Dated Brent, JKM and ICE Brent Crude forward contracts. See Note 35(a)(i) for further details pertaining to the notional
amounts and fair value of the HSFO, Dated Brent, JKM and ICE Brent Crude 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.
Sensitivity analysis for price risk
If prices for HSFO, Dated Brent, JKM and ICE Brent Crude increase/decrease by 5% (2021: 5%) with all other variables
held constant, the Group’s hedging reserve in equity would have been higher/lower by $7,324,000 (2021: $25,601,000),
$17,934,000 (2021: $338,000), $3,420,000 (2021: nil) and $3,829,000 (2021: nil) respectively as a result of fair value
changes on cash flow hedges.
If prices for electricity futures contracts increase/decrease by 5% (2021: 5%) with all other variables held constant, the
Group’s hedging reserve in equity would have been lower/higher by $2,164,000 (2021: $16,623,000) as a result of fair value
changes on cash flow hedges.
If prices for quoted investments increase/decrease by 5% (2021: 5%) with all other variables held constant, the Group’s
profit before tax would have been higher/lower by $1,765,000 (2021: $3,579,000) 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 $27,296,000 (2021: $26,458,000) 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.
202
Keppel Corporation Limited
Financial Report
(v)
Cash flow and fair value interest rate risk
The Group is exposed mainly to the SOR and the 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 S$171 million
borrowing linked to USD LIBOR, because the hedging instrument and the hedged item have not yet started transitioning to
SOFR. Discussions are still ongoing.
The following Phase 1 reliefs are applied to the cash flow hedges linked USD LIBOR:
•
•
•
When considering the ‘highly probable’ requirement, the Group has assumed that the 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 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$1,965 million
borrowings linked to SOR and USD LIBOR (including borrowings that had transitioned to alternative benchmark rates
during the year), as both the hedging instrument and the hedged item have been amended or are pending amendments to
the alternative benchmark rates with agreed 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 and SOFR as a hedged risk;
the contractual benchmark rate of the hedged borrowings has been amended from SOR and USD LIBOR to
SORA and SOFR respectively, plus an adjustment spread; and
the variable rate of the hedging interest rate swap has been amended from SOR and USD LIBOR to SORA and
SOFR respectively, 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 and USD LIBOR borrowings that is required by IBOR reform, the accumulated amount outstanding in the
cash flow hedge reserve was deemed to be based on SORA and SOFR. The amount is reclassified to profit or loss in
the same periods during which the hedged SORA and SOFR cash flows affect profit or loss.
(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 expected credit losses (“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.
Annual Report 2022
203
Notes to the Financial Statements
35. Financial risk management (continued)
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 2022 and 2021 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
2022
Energy & Environment
Expected loss rate
Gross carrying amount
Loss allowance
Connectivity
Expected loss rate
Gross carrying amount
Loss allowance
2021
Energy & Environment
Expected loss rate
Gross carrying amount
Loss allowance
Connectivity
Expected loss rate
Gross carrying amount
Loss allowance
-
-
-
0.5%
347,020
1,883
2.2%
0.5%
109,055
173,869
2,402
834
-
-
-
1.7%
145,297
2,402
0.5%
371,999
1,801
0.4%
155,142
684
6.3%
33,957
2,154
2.4%
52,192
1,239
16.0%
10,442
1,666
2.7%
60,841
1,664
17.9%
2,617
469
9.1%
20,019
1,815
8.7%
2,862
249
12.0%
8,102
970
13.5%
12,470
1,687
19.9%
56,742
11,294
17.7%
13,669
2,416
35.5%
31,636
11,245
396,064
6,193
411,877
17,584
398,972
6,132
401,018
16,965
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
204
Keppel Corporation Limited
Financial Report
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 2022 and 31 December 2021, 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 2022 and 2021, there are no significant financial assets that are past due and/or impaired.
(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. As part of its liquidity management, the Group
has built up adequate cash reserves and sufficient undrawn credit facilities to cover any short-term liquidity requirements so as
to support its current operations including investing activities.
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).
Group
2022
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 JKM forward contracts
- Receipts
- Payments
Net-settled ICE Brent Crude forward
- Receipts
- Payments
Net-settled electricity futures contracts
- Receipts
- Payments
Borrowings
Financial guarantees
Within
one year
$’000
Within
one to
two years
$’000
Within
two to
five years
$’000
After
five years
$’000
2,239,200
(2,245,274)
340,320
(348,948)
40,823
(34,464)
96,204
(1,808)
23,578
(40,480)
19,414
(3,196)
-
(51,074)
10,707
(159)
42,137
(31,116)
65,152
(1,879)
319
-
1,022
(3,573)
-
(4,766)
2,507
-
1,989
(1,979)
54,162
(44,748)
55,964
(4,493)
-
-
-
(204)
-
-
-
-
-
-
1,511
(1,260)
-
(3,208)
-
-
-
-
-
-
-
-
1,855
(17,090)
(4,227,532)
(747,134)
143
-
(2,084,210)
-
-
-
(4,014,400)
-
-
-
(1,496,071)
-
Annual Report 2022
205
Notes to the Financial Statements
35. Financial risk management (continued)
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
Financial guarantees
Company
2022
Gross-settled forward foreign exchange contracts
- Receipts
- Payments
Gross-settled cross currency swaps
- Receipts
- Payments
Net-settled interest rate swaps
- Receipts
- Payments
Borrowings
Financial guarantees
2021
Gross-settled forward foreign exchange contracts
- Receipts
- Payments
Gross-settled cross currency swaps
- Receipts
- Payments
Net-settled interest rate swaps
- Receipts
- Payments
Borrowings
Financial guarantees
Within
one year
$’000
Within
one to
two years
$’000
Within
two to
five years
$’000
After
five years
$’000
4,734,239
(4,683,873)
309,972
(306,151)
318,068
(311,080)
-
-
16,035
(26,676)
17,960
(25,890)
26,006
(31,473)
959
(2,345)
3,248
(37,930)
10,945
(12,300)
25,618
(18,119)
220
(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)
(958,085)
-
-
1,284,472
340,320
(1,291,652)
(348,948)
1,989
(1,979)
-
-
-
40,823
(34,464)
42,137
(31,116)
54,162
(44,748)
1,511
(1,260)
75,884
(1,344)
52,798
(1,728)
43,665
(2,962)
-
-
(2,973,264)
(987,162)
(2,778,095)
(843,721)
(462,579)
-
-
4,330,930
(4,310,546)
309,972
(306,151)
318,068
(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)
(655,005)
-
-
-
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.
206
Keppel Corporation Limited
Financial Report
(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 2022. 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
2022
$’000
2021
$’000
9,237,629
11,913,340
0.78x
8,400,306
12,441,361
0.68x
(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
2022
Financial assets
Derivative financial instruments
- from continuing operations
- from discontinued operations
Call option
Investments
-
-
Investments at fair value through other
comprehensive income
- from continuing operations
- from discontinued operations
Investments at fair value through profit or loss
- from continuing operations
- from discontinued operations
Short term investments
-
-
Investments at fair value through other
comprehensive income
- from continuing operations
- from discontinued operations
Investments at fair value through profit or loss
Financial liabilities
Derivative financial instruments
- from continuing operations
- from discontinued operations
Non-financial assets
Investment Properties
- Commercial and hospitality, completed
- Commercial, under construction
- Associates at fair value through profit or loss
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
-
-
-
273,051
5,143
-
-
-
192,522
273,051
5,143
192,522
494,706
-
34,618
-
48,097
3,118
685
1,409
-
-
16,745
277,279
26,603
674,707
55,350
773,394
26,603
709,325
72,095
-
-
-
-
-
-
48,097
3,118
685
581,224
296,348
1,226,461
2,104,033
-
-
-
-
-
-
-
256,204
13,639
269,843
-
-
-
256,204
13,639
269,843
-
-
-
-
1,349,265
2,933,828
246,677
1,349,265
2,933,828
246,677
4,529,770
4,529,770
Annual Report 2022
207
Notes to the Financial Statements
35. Financial risk management (continued)
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
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
Company
2022
Financial assets
Derivative financial instruments
Investments
-
Investments at fair value through other
comprehensive income
Financial liabilities
Derivative financial instruments
2021
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
-
-
502,310
71,314
26,834
269
186,294
-
-
20,791
-
171,520
186,294
171,520
226,052
627,197
728,362
719,302
-
-
-
-
26,834
269
600,727
207,085
1,024,769
1,832,581
-
-
-
-
-
-
-
-
-
-
-
-
-
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
173,642
-
173,642
-
19,430
19,430
173,642
19,430
193,072
-
140,354
140,354
67,499
-
67,499
-
67,499
24,100
24,100
24,100
91,599
-
102,061
102,061
In 2021, 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.
208
Keppel Corporation Limited
Financial Report
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
- from continuing operations
- from discontinued operations
Fair value gain recognised in profit or loss
- from continuing operations
- from discontinued operations
Reclassification
- Disposal group and assets classified as held for sale
- Associates/Joint Ventures
- Transfer to Level 3
- Others
Exchange differences
Distribution
Return on capital
At 31 December
Group
2022
$’000
1,024,769
131,668
(11,374)
2021
$’000
712,761
41,002
(47,625)
Company
2022
$’000
2021
$’000
24,100
22,196
-
-
-
-
(29,785)
(100,790)
(4,670)
1,904
(488)
3,571
113,379
28,043
(82,649)
(22,671)
-
-
(4,975)
-
-
316,867
-
-
14,139
82,443
235
2,399
(193)
(40)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,145,917
1,024,769
19,430
24,100
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
Disposal
Reclassification
- Stocks (Note 15)
Exchange differences
At 31 December
Group
2022
$’000
2021
$’000
4,256,428
3,674,075
216,799
131,711
(41,204)
-
(280,641)
229,581
238,458
-
3,544
110,770
4,283,093
4,256,428
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 2022
209
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
- from continuing
operations
- from discontinued
operations
Call option
Associates at fair value through
profit or loss
Investment properties
- Commercial, completed
Fair value
as at
31 December
2022
$’000
Valuation Techniques
Unobservable Inputs
Range of
unobservable
Inputs
953,395 Net asset value, discounted cash
Net asset value*
Not applicable
flow and binomial option pricing
Discount rate
15.71% to 20.00%
Growth rate
1.10% to 4.32%
Discount for lack of
control
15.00% - 23.30%
81,953 Net asset value and discounted
Net asset value*
Not applicable
cash flow
192,522
Discounted cash flow method
and investment method
Discount rate
9.00% - 19.00%
Transacted price of
comparable properties
(psf)
$1,586 - $3,617
Capitalisation rate
3.40%
246,677 Net asset value
Net asset value
Not applicable
1,349,265
Investment method, discounted
cash flow method and/or direct
comparison method;
Discount rate
7.25% to 14.50%
Capitalisation rate
4.25% to 10.00%
Income capitalisation method
Net initial yield
5.70%
Transacted price of
comparable land plots
(psm)
Transacted price of
comparable properties
(psf)
$3,974 to $5,610
$239 to $1,304
- Commercial, under construction
2,933,828
Direct comparison method,
discounted cash flow method,
and/or residual value method
Discount rate
13.00% to 17.00%
Capitalisation rate
4.00% to 10.00%
Transacted price of
comparable land plots
(psm)
Transacted price of
comparable properties
(psf)
$6,569 to $9,163
$2,376 to $3,617
Gross development value
($’million)
$216 to $1,949
*
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)(ix)).
210
Keppel Corporation Limited
Financial Report
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
Net asset value*
Not applicable
flow and binomial option pricing
Call option
171,520
Discounted cash flow 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%
$1,586 - $3,520
Capitalisation rate
3.50%
Associates at fair value through
profit or loss
Investment properties
- Commercial and residential,
completed
142,238 Net asset value
Net asset value
Not applicable
1,495,780
Investment method, 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%
- 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)
Transacted price of
comparable properties
(psf)
$4,690 to $7,504
$266 to $3,004
Terminal capitalisation rate
7.75%
Discount rate
12.50% to 17.00%
Capitalisation rate
4.00% to 10.00%
Transacted price of
comparable land plots
(psm)
Transacted price of
comparable properties
(psf)
$7,129 to $9,192
$2,468 to $3,171
Gross development value
($’million)
$239 to $2,099
*
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)(ix)).
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 $1,035,348,000 as at 31 December 2022 comprises $753,350,000 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 $37,668,000 increase/decrease in fair valuation.
Valuation process of investment properties is described in Note 8.
Annual Report 2022
211
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 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 27 April 2022, Keppel Corporation Limited (“the Company”) and Sembcorp Marine Ltd (“Sembcorp Marine”) entered into
definitive agreements for the proposed combination of Keppel Offshore & Marine Ltd (“Keppel O&M”) and Sembcorp Marine.
Concurrent with the proposed combination, the Company has entered into a definitive agreement with Baluran Limited and
Kyanite Investment Holdings Pte Ltd, for the sale of Keppel O&M’s legacy rigs and associated receivables to a new and separate
entity (“Asset Co Transfer”).
On 27 October 2022, the structure and terms of the proposed combination have been amended such that, 1) the merger of
Keppel O&M and Sembcorp Marine will be effected by way of the acquisition by Sembcorp Marine of all the Keppel O&M Shares
held by the Company (the “KOM Share Transfer”) and 2) the completion of the Asset Co Transfer will proceed regardless of
whether the KOM Share Transfer takes place.
In accordance with SFRS(I) 5 Non-current Assets Held for Sale and Discontinued Operations, the performance of Keppel O&M, as
a separate reportable operating segment, excluding certain out-of-scope assets, are presented as discontinued operations for the
period, with comparative information re-presented accordingly. Refer to Note 37 for further details.
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.
(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.
212
Keppel Corporation Limited
Financial Report
2022
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 from continuing
operations for year
Attributable to:
Shareholders of Company
Perpetual securities holders
Non-controlling interests
Profit from discontinued operations,
net of tax and NCI
Profit for the year attributable to
shareholders of the Company
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*
Energy &
Environment
$’000
Urban
Development
$’000
Connectivity
$’000
Asset
Management
$’000
Corporate &
Others
$’000
Elimination
$’000
Total
$’000
4,229,331
34,841
4,264,172
903,544
526
904,070
1,291,273
13,135
1,304,408
195,092
13,639
208,731
478
87,918
88,396
-
(150,059)
(150,059)
6,619,718
-
6,619,718
86,044
-
65,705
(56,547)
119,257
214,459
(44,306)
288,166
1,536
36,215
(66,563)
158,809
418,163
(146,447)
62,057
273
6,592
(14,709)
15,794
70,007
(23,134)
91,014
43,218
760
(36,802)
242,119
340,309
(27,211)
27,196
3,514
423,959
(402,719)
-
51,950
(4,051)
170,153
271,716
46,873
313,098
47,899
172,549
-
(2,396)
170,153
281,762
-
(10,046)
271,716
37,236
-
9,637
46,873
310,922
-
2,176
313,098
36,490
11,600
(191)
47,899
21,197
4,208,134
4,229,331
-
4,229,331
680,261
153,245
833,506
70,038
903,544
393,207
894,600
1,287,807
3,466
1,291,273
43,805
151,287
195,092
-
195,092
-
475
475
3
478
10,730
-
(441,883)
431,153
-
-
-
-
-
-
-
-
-
-
-
-
-
565,207
48,541
91,348
(146,187)
535,979
1,094,888
(245,149)
849,739
838,959
11,600
(820)
849,739
87,658
926,617
1,138,470
5,407,741
6,546,211
73,507
6,619,718
11,161,774
11,350,215
(188,441)
11,978,928
6,392,475
5,586,453
3,431,961
2,738,442
693,519
4,291,601
1,797,304
2,494,297
13,044,000
9,716,488
3,327,512
(12,843,287) 31,064,977
(12,843,287) 19,151,637
11,913,340
-
*
inclusive of disposal group classified as held for sale
Investment in associated
companies and joint ventures
Additions to non-current assets
Depreciation and amortisation
Impairment loss on non-financial
assets
Allowance/(write-back) for
expected credit loss and
bad debt written-off
Geographical information
External sales
Non-current assets
1,119,697
639,425
32,982
2,250,570
344,047
31,080
100,684
236,983
124,760
3,320,911
236,830
2,718
7,052
107
1,953
23,683
(776)
10,917
-
-
-
1,117
15,018
-
186
-
-
-
-
-
6,791,862
1,458,402
206,558
9,112
34,010
Singapore
$’000
China/
Hong Kong
$’000
5,465,913
8,192,941
916,228
3,503,743
Other
Far East
& ASEAN
countries
$’000
Brazil
$’000
-
-
172,458
1,695,069
Other
countries
$’000
65,119
465,765
Elimination
$’000
Total
$’000
-
-
6,619,718
13,857,518
Other than Singapore and China, no single country accounted for 10% or more of the Group’s revenue for the year ended 31 December 2022.
Information about a major customer
Revenue of $2,045,861,000 is derived from a single external customer and is attributable to the Energy & Environment segment for the
year ended 31 December 2022.
Note: Pricing of inter-segment goods and services is at fair market value.
Annual Report 2022
213
Notes to the Financial Statements
36. Segment analysis (continued)
2021#
Revenue
External sales
Inter-segment sales
Total
Segment Results
Operating profit/(loss)
Investment income
Interest income
Interest expenses
Share of results of associated
companies and joint ventures
Profit/(loss) before tax
Taxation
Profit/(loss) from continuing
operations for year
Attributable to:
Shareholders of Company
Perpetual securities holders
Non-controlling interests
Loss from discontinued operations,
net of tax and NCI
Profit for the year attributable to
shareholders of the Company
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*
Energy &
Environment
$’000
Urban
Development
$’000
Connectivity
$’000
Asset
Management
$’000
Corporate &
Others
$’000
Elimination
$’000
Total
$’000
3,560,370
28,127
3,588,497
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
-
(121,902)
(121,902)
6,611,336
–
6,611,336
(290,695)
-
60,391
(106,732)
144,450
(192,586)
3,767
992,963
1,512
36,797
(52,342)
93,170
1,072,100
(331,263)
86,488
270
304
(19,094)
18,528
86,496
(18,567)
112,880
41,632
147
(30,752)
202,617
326,524
(26,188)
222,950
61,447
366,147
(331,925)
-
318,619
(2,938)
(188,819)
740,837
67,929
300,336
315,681
(189,028)
-
209
(188,819)
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
12,324
3,548,046
3,560,370
-
3,560,370
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
-
-
-
-
-
4,737
–
(375,480)
370,743
-
-
-
-
-
-
-
-
-
-
-
-
-
1,129,323
104,861
88,306
(170,102)
458,765
1,611,153
(375,189)
1,235,964
1,247,468
3,401
(14,905)
1,235,964
(224,817)
1,022,651
1,835,721
4,700,699
6,536,420
74,916
6,611,336
11,481,452
11,929,685
(448,233)
13,954,820
6,955,468
6,999,352
3,606,910
2,525,065
1,081,845
3,989,870
1,708,088
2,281,782
12,205,731
9,679,116
2,526,615
(12,915,856)
(12,915,856)
-
32,322,927
19,881,566
12,441,361
*
inclusive of disposal group classified as held for sale
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
626,848
62,998
30,406
2,281,122
274,447
42,564
151,162
349,995
201,430
2,991,126
34,098
2,796
-
6,698
13,627
58,294
53,051
1,586
117,236
1,346
11,781
146,024
-
-
-
-
-
-
(132)
-
-
-
-
-
-
-
6,050,258
728,236
290,823
112,931
130,231
146,024
External sales#
Non-current assets
Singapore
$’000
4,856,690
7,928,820
China/
Hong Kong
$’000
1,526,698
3,922,600
Other
Far East
& ASEAN
countries
$’000
Brazil
$’000
-
160,951
159,197
1,803,975
Other
countries
$’000
68,751
653,202
Elimination
$’000
Total
$’000
-
-
6,611,336
14,469,548
Other than Singapore and China, no single country accounted for 10% or more of the Group’s revenue for the 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.
#
Comparative information has been re-presented due to a discontinued operation (Note 37).
214
Keppel Corporation Limited
Financial Report
37. Discontinued operations and disposal group and assets classified as held for sale and liabilities directly associated with
disposal group and assets classified as held for sale
(i)
Discontinued operations and disposal group held for sale and liabilities directly associated with disposal group
classified as held for sale
Keppel Offshore & Marine Ltd (“Keppel O&M”)
On 27 April 2022, the Company and Sembcorp Marine Ltd (“Sembcorp Marine”) entered into definitive agreements for the
proposed combination of Keppel Offshore & Marine Ltd (“Keppel O&M”) and Sembcorp Marine (the “Proposed Combination”).
The Proposed Combination involves the establishment of a new holding company (the “Combined Entity”) which will combine the
businesses of Keppel O&M and Sembcorp Marine via separate schemes of arrangement.
Concurrent with the Proposed Combination, the Company has entered into a definitive agreement with Baluran Limited
(“Baluran”) and Kyanite Investment Holdings Pte Ltd (“Kyanite”), for the sale of Keppel O&M’s legacy rigs and associated
receivables to a new and separate entity, Rigco Holding Pte Ltd (the “Asset Co Transaction”).
On 27 October 2022, the structure and terms of the Proposed Combination have been amended such that, 1) the merger of
Keppel O&M and Sembcorp Marine will be effected by way of the acquisition by Sembcorp Marine (and not the Combined Entity)
of all the Keppel O&M Shares held by the Company (the “KOM Share Transfer”) in consideration for the issuance by Sembcorp
Marine of such number of new ordinary shares in the capital of Sembcorp Marine (“SCM Shares”) representing 54% of the total
number of SCM Shares (“Consideration Shares”) and 2) the completion of the Asset Co Transfer will proceed regardless of
whether the Keppel O&M Share Transfer takes place. Of which, the Company will distribute 49% of the total number of SCM
Shares to its shareholders and remaining 5% of SCM shares (the “Retained Consideration Shares”) transfer to a segregated
account (“Proposed Distribution”). Post acquisition, Sembcorp Marine will be the “Combined Entity” owning a combination of its
current business and KOM.
Accordingly, the assets and liabilities related to Keppel O&M for the Proposed Combination, excluding certain out-of-scope
assets, had been presented in the balance sheet as “Disposal group classified as held for sale” and “Liabilities directly associated
with disposal group classified as held for sale”, and its results were presented separately on the consolidated statement
of comprehensive income as “Discontinued operations” for the financial year ended 31 December 2022, with comparative
information re-presented accordingly. The Group has also ceased the depreciation of $71,185,000 for the relevant assets
classified under disposal group held for sale for the period since 27 April 2022. The disposal group was previously presented
under the “Energy & Environment” reportable segment of the Group (Note 36).
On 8 December 2022, the resolutions relating to 1) the Proposed Transaction involving the Asset Co Transaction and the
Proposed Combination of Keppel O&M and Sembcorp Marine which constitutes a major transaction and an interested person
transaction, and 2) the Proposed Distribution, were duly passed at the extraordinary general meeting of the Company.
(a)
The results of the discontinued operations are as follows:
Revenue
Expenses*
Profit/(Loss) before tax from discontinued operations
Taxation
Non-controlling interests
Profit/(Loss) from discontinued operations,
net of tax and non-controlling interests
2022
$’000
2021
$’000
2,799,418
2,013,377
(2,683,140)
(2,289,534)
116,278
(33,212)
4,592
(276,157)
50,205
1,135
87,658
(224,817)
*
In accordance with SFRS(I) 5 Non-current Assets Held for Sale and Discontinued Operations, following the classification as disposal group
classified as held for sale, the Group has ceased depreciation of $71,185,000 for the relevant assets classified under disposal group held for
sale for the period since 27 April 2022. The 2022 results also include a partial writeback of $292,838,000 (before reversal of deferred tax credit
of $38,919,000 recognised in taxation) impairment made in 2020 for certain legacy rig assets (Note 2.28(b)(i)(c)) and a gain from divestment of
Keppel Smit Towage Pte Limited and Maju Maritime Pte Ltd of $74,495,000.
(b)
The cash flows attributable to the discontinued operations are as follows:
Operating cash flow
Investing cash flow
Financing cash flow
Net cash inflows / (outflows)
2022
$’000
115,472
92,204
260,362
468,038
2021
$’000
(522,898)
3,070
419,417
(100,411)
Annual Report 2022
215
Notes to the Financial Statements
37. Discontinued operations and disposal group and assets classified as held for sale and liabilities directly associated with
disposal group and assets classified as held for sale (continued)
(ii) Assets classified as held for sale and liabilities directly associated with assets classified as held for sale
(a) Marina East Water Pte. Ltd. (“MEW”)
On 30 June 2022, Keppel Infrastructure Holdings Limited (“Keppel Infrastructure”), a wholly-owned subsidiary of the
Company, and Keppel Infrastructure Fund Management Pte Ltd (“KIFM”), as Trustee-Manager of Keppel Infrastructure
Trust (“KIT”), have signed a non-binding term sheet with the intention to enter into definitive agreements with respect to
the sale and purchase of the Group’s interest in MEW (“Proposed Transaction”). The Proposed Transaction is subject to
customary closing conditions including approvals by shareholders and PUB, as well as the receipt of applicable regulatory
approvals. Post the proposed transaction, MEW will be jointly-controlled by Keppel Infrastructure and KIT, with KIT
receiving 100% of the economic interest.
In accordance to SFRS(I) 5 Non-current Assets Held for Sale and Discontinued Operations, the assets and liabilities of
MEW have been presented separately as “assets classified as held for sale” and “liabilities directly associated with assets
classified as held for sale” in the condensed consolidated balance sheet as at 31 December 2022.
Disposal group and assets classified as held for sale
Fixed assets
Intangibles
Right-of-use assets
Associated companies and joint ventures
Deferred tax assets
Other non-current assets
Investments
Contract assets
Stocks
Debtors and other assets
Bank balances, deposits & cash
Liabilities directly associated with disposal group and
assets classified as held for sale
Creditors and other liabilities
Provisions
Contract liabilities
Term loans
Lease liabilities
Taxation
Deferred tax liabilities
Other non-current liabilities
Group
31.12.2022
Assets
classified as
held for sale
$’000
-
-
-
-
-
334,545
-
-
-
8,232
25,325
Disposal
group
$’000
2,629,084
11,739
288,940
204,041
68,989
395,020
101,816
2,435,618
1,823,190
822,058
381,179
Total
$’000
2,629,084
11,739
288,940
204,041
68,989
729,565
101,816
2,435,618
1,823,190
830,290
406,504
9,161,674
368,102
9,529,776
2,178,848
5,349
2,184,197
112,559
774,157
455,864
314,711
25,137
36,021
18,404
-
-
301,847
-
1,106
-
-
112,559
774,157
757,711
314,711
26,243
36,021
18,404
3,915,701
308,302
4,224,003
38. New accounting standards
At the date of authorisation of these financial statements, the following new SFRS(I) and amendments to SFRS(I)s that are relevant to
the Group and the Company were issued but not effective:
•
Amendments to SFRS(I) 1-1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current (effective
for annual periods beginning on or after 1 January 2024)
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.
•
Amendments to SFRS(I) 1-12 Income Taxes: Deferred Tax related to Assets and Liabilties arising from a Single Transaction
(effective for annual periods beginning on or after 1 January 2023)
216
Keppel Corporation Limited
Financial Report
The amendments to SFRS(I) 1-12 Income Taxes require companies to recognise deferred tax on transactions that, on initial
recognition, give rise to equal amounts of taxable and deductible temporary differences. They will typically apply to transactions such
as leases of lessees and decommissioning obligations, and will require the recognition of additional deferred tax assets and liabilities.
The amendment should be applied to transactions that occur on or after the beginning of the earliest comparative period presented.
In addition, entities should recognise deferred tax assets (to the extent that it is probable that they can be utilised) and deferred tax
liabilities at the beginning of the earliest comparative period for all deductible and taxable temporary differences associated with:
•
•
right-of-use assets and lease liabilities, and
decommissioning, restoration and similar liabilities, and the corresponding amounts recognised as part of the cost of the related
assets.
The cumulative effect of recognising these adjustments is recognised in retained earnings, or another component of equity, as
appropriate.
SFRS(I) 1-12 did not previously address how to account for the tax effects of on-balance sheet leases and similar transactions
and various approaches were considered acceptable. Some entities may have already accounted for such transactions
consistent with the new requirements. These entities will not be affected by the amendments.
•
SFRS(I) 17 Insurance Contracts (effective for annual periods beginning on or after 1 January 2023)
SFRS(I) 17, covering recognition and measurement, presentation and disclosure, will replace SFRS(I) 4 Insurance Contracts and
apply to all types of insurance contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of entities
that issue them, as well as to certain guarantees and financial instruments with discretionary participation features. A few
scope exceptions will apply. The overall objective of SFRS(I) 17 is to provide an accounting model for insurance contracts that is
more useful and consistent for insurers. In contrast to the requirements in SFRS(I) 4, which are largely based on grandfathering
previous local accounting policies. The core of SFRS(I) 17 is the general model, supplemented by a specific adaptation for
contracts with direct participation features (the variable fee approach) and a simplified approach (the premium allocation
approach) mainly for short-duration contracts.
The management anticipates that the adoption of the above SFRS(I) 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
(i)
Subsequent to 31 December 2022, the Group divested its shipyard at 55 Gul Road, Singapore, including fixed infrastructure and
equipment thereon through Keppel FELS Limited, wholly owned subsidiary of the Company, for a cash consideration of $95
million. The book value and net tangible value of the yard as at 31 December 2022 was $57 million. The financial effect of this
disposal has been recognised within the discontinued operations in January 2023.
(ii)
The Proposed Combination, as set out in Note 37(i), was approved on 16 February 2023 by the shareholders of Sembcorp Marine.
Based on the carrying values of Keppel O&M’s legacy rigs and associated receivables, as described in Note 37(i), the Asset Co
Transaction was completed on 27 February 2023 for a consideration of approximately $4,372 million satisfied in the following manner:
(a)
issuance of 499,000 new ordinary shares in the capital of Rigco Holding Pte Ltd at the issue price of $1.00 per share;
(b)
issuance of $120 million 10.0% perpetual securities by Rigco Holding Pte Ltd; and
(c)
issuance of vendor notes of 4% per annum for a maximum tenure of 12 years in the same aggregate principal amount by
Rigco Holding Pte Ltd of approximately $4,251 million.
No gain or loss was recognised in the profit or loss on the date of completion from the Asset Co Transaction.
The Proposed Combination was completed on 28 February 2023 and the Company has received:
I.
36,848,072,918 Consideration Shares amounting to approximately $4,237 million. Of which, 33,436,214,314 Consideration
Shares (representing 49% of the enlarged capital of Sembcorp Marine) amounting to approximately $3,845 million has
been distributed as dividend-in-specie to the Company’s shareholders and the remaining 3,411,858,604 Consideration
Shares (representing 5% of the enlarged capital of Sembcorp Marine) amounting to approximately $392 million, as
Retained Consideration Shares placed into a segregated account; and
II.
a Cash Component of $500,000,000 from Keppel O&M in settlement of interests and redemption amount for a partial
redemption of intercompany perpetual securities.
Arising from the Proposed Combination, based on the value of assets and liabilities of Keppel O&M (as Disposal Group) for the
Proposed Combination as of 28 February 2023, the gain on disposal recognised in the profit or loss on the date of completion is
approximately $3,300 million. The gain on disposal is subject to adjustment for any reimbursement by the Company to Keppel
O&M for certain expenditures incurred by Keppel O&M before the completion of the combination, relating to assets sold by
Keppel O&M to Rigco Holding Pte Ltd to the extent that such expenditures are in excess of an agreed sum.
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.
Annual Report 2022
217
Significant Subsidiaries, Associated Companies
and Joint Ventures
Gross
Interest
Effective Equity
Interest
2022
%
31 December
2022
%
2021
%
Cost of Investment
31 December
2022
$’000
2021
$’000
Country of
Incorporation
/Operation
Principal Activities
ENERGY & ENVIRONMENT
Offshore & Marine
(all entities within Offshore & Marine are part of the disposal group held for sale, other than Floatel International Ltd.)
Subsidiaries
Keppel Offshore and Marine Ltd
Keppel FELS Ltd
100
100
100
100
100
801,720
801,720 Singapore
Investment holding
100
1,891,900
# Singapore
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
Pte Ltd
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
Offshore Partners 2 Pte Ltd
100
100
100
Regency Steel Japan Ltd(1)
FELS Asset Co Pte Ltd
FELS Asset Co 2 Pte Ltd
51
100
100
51
100
100
51
100
100
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
218
Keppel Corporation Limited
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
# Singapore
Chartering of ships, barges and
boats with crew
# 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
Financial Report
Gross
Interest
Effective Equity
Interest
31 December
2022
%
2021
%
Country of
Incorporation
/Operation
Principal Activities
Cost of Investment
31 December
2022
$’000
2021
$’000
FELS Asset Co 3 Pte Ltd(n)
FELS Asset Co 4 Pte Ltd(n)
FELS Asset Co 5 Pte Ltd(n)
FELS Asset Co 6 Pte Ltd(n)
Lenity Pioneer Pte Ltd
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
Offshore Technology
Development Pte Ltd
2022
%
100
100
100
100
100
100
99
100
100
87+
100
100
100
100
100
100
100
100
99
100
100
86+
100
100
Keppel Letourneau Middle East
FZE
100
100
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
50
50
49
33
20
20
-
-
50
50
50
49
33
20
20
-
-
50
100
100
100
100
100
100
Keppel Gas Pte Ltd
100
100
100
-
-
-
-
100
#
#
#
#
#
- 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
Chartering of ships, barges and
boats with crew
# Singapore
Service activities related to oil
and gas extraction
100
472,976
# Singapore
Ship repairing, shipbuilding and
conversions
98
100
100
#
#
#
# Philippines
Shipbuilding and repairing
# China
# China
Engineering and construction of
specialised vessels
Engineering and construction of
specialised vessels
86+
3,020
3,020 Philippines
Shipbuilding and repairing
100
100
100
50
50
49
33
20
20
51
51
50
#
#
#
#
#
#
#
#
#
-
-
#
# Singapore
Holding of long-term investments
# Singapore
Production of jacking systems
# UAE
Oilfield equipment trading, service
and repair
# 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
100
445,892
445,892 Singapore
Investment holding
100
100
#
#
#
# Singapore
Investment holding
# Singapore
Electricity, energy and power
supply and general wholesale
trade
# Singapore
Purchase and sale of gaseous
fuels
Annual Report 2022
219
Significant Subsidiaries, Associated Companies
and Joint Ventures
Gross
Interest
2022
%
100
Effective Equity
Interest
31 December
2022
%
100
2021
%
100
Keppel DHCS Pte Ltd
Keppel Seghers Pte Ltd
100
100
100
Country of
Incorporation
/Operation
Principal Activities
Cost of Investment
31 December
2022
$’000
2021
$’000
#
#
#
#
#
#
#
#
#
#
#
# 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
# Singapore
Engineering works, construction
and O&M of plants and facilities
# Singapore
Investment holding
# Singapore
Investment holding
- Singapore
Investment holding
10
10 Singapore
Investment holding
18,425
18,425 Singapore
Investment holding
#
*
#
#
#
#
#
#
#
# Singapore
Investment holding
* Singapore
Investment holding
# Singapore
Commercial power generation
# Switzerland
Integrated energy company
# China
Investment and implementation
of energy and utilities related
infrastructure
- Singapore
Integrated environmental
solutions provider
- Singapore
- Singapore
Procurement, installation,
operating and maintenance of
solar generation facilities
Procurement, installation,
operating and maintenance of
solar generation facilities
- Switzerland Renewable energy generation
100
100
100
100
100
100
100
100
-
100
100
60
100
49
20
20
-
-
-
-
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 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
Keppel Seghers Engineering
Singapore Pte Ltd
Keppel Integrated Engineering Ltd
Keppel New Energy Pte. Ltd.
(formerly known as XTE
Investments Pte. Ltd.)
Keppel EnServices Investment
Pte. Ltd.(n)
Kepinvest Holdings Pte Ltd
Kepinvest Singapore Pte Ltd
Cloud Alpha Pte Ltd
Keppel Renewable Investments
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)
Harmony Holdco Pte Ltd(2)(n)
Cleantech Solar Asia Pte Ltd(2)(n)
Cleantech Renewable Assets
Pte Ltd(2)(n)
Keppel MET Renewables AG(1)(n)
URBAN DEVELOPMENT
Subsidiaries
Keppel Land Ltd
Keppel Land China Ltd
Keppel Land Estate Pte Ltd
Keppel Bay Pte Ltd
100
100
100
100
100
100
100
100
100
100
100
60
100
49
10
20
32
50
51
50
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
60
100
49
10
20
32
45
31
50
100
100
100
100
Keppel Philippines Properties
87+
87+
87+
493
493 Philippines
Property development
Inc(1)
220
Keppel Corporation Limited
Financial Report
Gross
Interest
Effective Equity
Interest
2022
%
31 December
2022
%
2021
%
Cost of Investment
31 December
2022
$’000
2021
$’000
Country of
Incorporation
/Operation
Principal Activities
67
100
100
100
100
100
67
100
100
100
98
100
100
100
100
100
100
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
# BVI
# BVI
Investment holding
Investment holding
# Singapore
Investment holding
# 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
# Singapore
Investment holding
# Singapore
Property investment and
development
# Singapore
Investment holding
# Singapore
Investment holding
# Singapore
Property development
# Singapore
Property development
100+
122,785
122,785 Singapore
Investment holding
Bellenden Investments Ltd(3)
Broad Elite Investments Ltd(3)
Cesario Pte Ltd
Changzhou Fushi Housing
Development Pte 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)
Elaenia Pte Ltd
Evergro Properties Ltd
Floraville Estate Pte Ltd
Greenfield Development Pte Ltd
Harvestland Development Pte Ltd
Straits Properties Ltd
Keppel Point Pte Ltd
Jencity Ltd(3)
K-Commercial Pte Ltd
Katong Retail Trust
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)
67
100
100
100
100
100
67
100
100
100
98
100
100
100
100
100
100
100+
100
100
100
100
100
100
100
67
100
100
100
100
100
67
100
100
100
98
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
100
100
51
100
84
84
100
100
100
100
100
51
100
84
84
100
100
100
100
100
51
100
84
84
100
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
# BVI
Investment holding
# Singapore
Property development/
investment
# Singapore
Investment trust
# 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
Annual Report 2022
221
Significant Subsidiaries, Associated Companies
and Joint Ventures
Gross
Interest
2022
%
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
100
100
-
100
100
99
100
100
100
-
100
Keppel Seasons Residences
Property Development (Wuxi)
Co., Ltd(1)
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
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
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 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)
Effective Equity
Interest
31 December
2022
%
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
100
100
-
100
100
99
99
99
100
-
99
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
75
100
100
100
100
100
99
99
99
100
99
99
Country of
Incorporation
/Operation
Principal Activities
Cost of Investment
31 December
2022
$’000
2021
$’000
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
-
#
#
#
#
#
#
-
#
# China
Property development
# 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
# Singapore
Investment holding
# Singapore
Property development
# Singapore
Investment holding
# Singapore
Investment holding
# BVI
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
# Vietnam
Property development
# BVI
Investment holding
# Vietnam
Property development
# China
Investment holding
# China
Property investment
# China
Property investment
# China
# China
# China
# China
Property investment
Property development
Property investment
Property development
# China
Property development
# China
Investment holding
222
Keppel Corporation Limited
Financial Report
Gross
Interest
Effective Equity
Interest
2022
%
99
99
80
100
100
100
31 December
2022
%
2021
%
99
99
72
100
100
100
99
99
69
100
100
100
Country of
Incorporation
/Operation
Principal Activities
Cost of Investment
31 December
2022
$’000
2021
$’000
#
#
#
#
#
#
# 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+
100+
100
100
100
100
100
39
46
35
30
40
40
25
49
61
61
61
39
8
25
60
30
100+
100
100
100
100
100
39
46
35
30
40
40
25
49
61
61
61
39
8
25
60
30
100+
100
100
100
100
51
39
46
35
30
40
40
25
49
61
61
61
39
8
25
60
30
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
#
# Singapore
Investment holding
# BVI
Investment holding
# China
Property development
# China
Property investment
# China
Property investment
# China
Investment holding
#
#
#
India
Property investment
Indonesia
Hotel ownership and operations
Indonesia
Golf course ownership and
operations
# China
Property development
# China
Property development
# Myanmar
Property development
# Vietnam
Property development
# Singapore
Property management
#
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
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
Substantial Enterprises Ltd(3)
Tianjin Fulong Property
Development Co Ltd(1)
China The9 Interactive
(Shanghai) Ltd(1)
The9 Computer Technology
Consulting (Shanghai) Ltd(1)
Shanghai Mingbu Industrial Co
Ltd(1)
Bangalore Tower Pvt Ltd(2)
PT Straits-CM Village(1)
PT Ria Bintan(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
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)
Annual Report 2022
223
Significant Subsidiaries, Associated Companies
and Joint Ventures
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)
Tianjin Fushi Property
Development Co Ltd(1)
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
Keppel Communications Pte Ltd
Keppel Telecoms Pte Ltd
Keppel Midgard Holdings Pte
Ltd(3)
Adfact Pte Ltd
Keppel Konnect Pte Ltd
Konnectivity Pte Ltd
Apsilon Ventures Pte Ltd
M1 Limited
M1 Net Ltd
Gross
Interest
Effective Equity
Interest
2022
%
31 December
2022
%
2021
%
Cost of Investment
31 December
2022
$’000
2021
$’000
Country of
Incorporation
/Operation
Principal Activities
33
40
50
42
25
15
30
30
30
49
33
40
45
42
25
15
30
30
30
49
33
40
45
42
25
15
30
30
30
49
#
#
#
#
#
#
#
#
#
#
# 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
# China
Investment holding
Property development
100
100
100
621,299
621,299 Singapore
Investment, management and
holding company
-
60
100
100
100
100
100
100
100
80
100
100+
100+
-
60
100
100
100
100
100
100
100
80
100
84+
84+
100
60
100
100+
100
100
100
100
100
80
100
84+
84+
-
#
#
#
#
#
#
#
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
# Singapore
Telecommunications network
operation
# 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
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
SVOA Public Company Ltd(2)
-
21
50+
32
-
21
42+
32
10
21
42+
32
224
Keppel Corporation Limited
Financial Report
Gross
Interest
Effective Equity
Interest
2022
%
31 December
2022
%
2021
%
Cost of Investment
31 December
2022
$’000
2021
$’000
Country of
Incorporation
/Operation
Principal Activities
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
Keppel Funds Investment Pte Ltd
Keppel Infrastructure Fund
Management Pte Ltd
Keppel Capital Alternative Asset
Pte. Ltd.
Associated Companies and
Joint Ventures
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
100
100
100
100+
100
100
100
100
100
100
100
100
100
Keppel DC REIT
20
20
21
Keppel REIT
Keppel Pacific Oak US REIT(2)
Keppel Pacific Oak US REIT
Management Pte. Ltd.(2)
KBS US Prime Property
Management Pte. Ltd(2)
Keppel-Pierfront Private Credit
Fund LP(2)
Keppel Asia Infrastructure
Fund LP(2)
Watermark Retirement
Communities, LLC(2)
WRC KSL Senior Holdings, LLC(2)
Alpha DC Fund Private Limited(2)
Keppel Data Centre Fund II LP(2)
47+
7
50
30
26
19
50
50
65
41
47+
7
50
30
26
19
50
50
65
41
49+
7
50
30
26
19
50
50
65
41
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
# Singapore
Trust Management
# Singapore
Fund Management
# Singapore
Real estate investment trust-
Data centre facilities and
colocation services
# Singapore
Real estate investment trust
# Singapore
Real estate investment trust
# Singapore
Property management
# Singapore
Property management
# Singapore
Investment holding
# Singapore
Investment holding
# USA
Management company
# USA
Investment holding
# Singapore
# Singapore
Investment holding and fund
management
Investment holding and fund
management
Annual Report 2022
225
Significant Subsidiaries, Associated Companies
and Joint Ventures
Gross
Interest
Effective Equity
Interest
2022
%
31 December
2022
%
2021
%
Cost of Investment
31 December
2022
$’000
2021
$’000
Country of
Incorporation
/Operation
Principal Activities
CORPORATE & OTHERS
Subsidiaries
Kephinance Investment Pte Ltd
Keppel Capital One Pte Ltd
Keppel Ventures (Property) Pte
Ltd
Keppel Oil & Gas Pte Ltd
Kepventure Pte Ltd
100
100
100
100
100
100
100
100
100
100
100
100
100
100
#
#
#
100
90,000
90,000 Singapore
# Singapore
Investment holding and central
finance administrator
To arrange, syndicate and/or
provide financing to customers of
Keppel Group
# Singapore
Investment holding
# Singapore
Investment holding
594,922
594,922 Singapore
Investment holding
Total Significant Subsidiaries^
10,766,554
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 or 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) * The cost of investment of the subsidiary is less than $1,000.
(v)
(vi) 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 236 significant subsidiaries, associated companies and joint ventures as at 31 December 2022. 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.
Inclusive of subsidiaries within discontinued operations
^
226
Keppel Corporation Limited
Financial Report
Interested Person Transactions
The Group has obtained a general mandate from shareholders of the Company for interested person transactions in the Annual General
Meeting held on 22 April 2022. During the financial year, the following interested person transactions were entered into by the Group:
Name of Interested Person
Nature of relationship
Aggregate value of all
interested person
transactions during
the financial year
under review (excluding
transactions less than
$100,000 and transactions
conducted under
shareholders’ mandate
pursuant to Rule 920)
Aggregate value of all
interested person
transactions conducted
under a shareholders’
mandate pursuant
to Rule 920 of the
SGX Listing Manual
(excluding transactions
less than $100,000)
Transaction for the Sale of Goods and Services
Temasek Holdings Group (other than the below)
CapitaLand Group
Clifford Capital Group
Keppel Infrastructure Trust Group
Lan Ting Holdings Group
PSA International Group
SembCorp Marine Group
Singapore Power 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
Lan Ting Holdings Group
SembCorp Industries Group
SembCorp Marine Group
Singapore Technologies Engineering Group
Singapore Technologies Telemedia Group
Singapore Telecommunications Group
StarHub Group
Surbana Jurong Group
Treasury Transactions
Temasek Holdings Group (other than the below)
Keppel Infrastructure Trust Group
Clifford Capital Group
SembCorp Marine Group
Joint Venture
Temasek Holdings Group (other than the below)
Keppel Infrastructure Trust Group
Singapore Technologies Engineering 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 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.
2022
$’000
399
–
1,530
20,860
–
11
4
15
95,116
164
346
1,616
–
–
–
–
71
4
71
–
–
20,394
4,201
143,783
159
35,800
278,591
1,198
2022
$’000
1,769
1,391
137
175,453
21,970
6,057
2,907
1,714
2,610
7,019
68,912
2,357
1,211
652,000
127,062
2,064
7,868
1,720
32,873
60,041
1,615
–
–
–
–
–
–
–
Total Interested Person Transactions
604,333
1,178,750
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 2022
227
Other Information Key Executives
Chan Hon Chew, 57
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 has been 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 (appointment till 28 February 2023), 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, 57
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. 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), Keppel Telecommunications & Transportation Ltd, Keppel Land Limited 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
Louis Lim, 50
Master and Bachelor of Economics (Sigma Xi), Massachusetts Institute of Technology; MBA, INSEAD.
Mr Lim is the Chief Executive Officer of Keppel Land Limited, 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, Keppel Capital Holdings Pte Ltd and is also a director of various
subsidiaries of Keppel Corporation Limited and Keppel Land Limited. Mr Lim is currently a member of the INSEAD Facilities Committee and he
also sits on the board of Glyph Community Limited.
Past principal directorships in the last five years
Nil
228
Keppel Corporation Limited
Other Information Cindy Lim, 45
Bachelor of Engineering (Mechanical & Production) (Second Upper Honours), 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 over 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 master
developer of integrated smart and sustainable precincts and townships in the Asia-Pacific region. As the Director of GCD, she focused on
identifying and extracting synergies across the operating business units within the Keppel Group, as well as harnessing both internal and
external collaboration. As the founding Managing Director of KUS, she set up and led the unit to pursue and capture business opportunities
arising from rapid urbanisation and the increasing global focus on liveability and sustainability.
Prior to these, Ms Lim was the Executive Director of Infrastructure Services in Keppel Infrastructure, where she was responsible for the
operations and maintenance business of energy and environmental infrastructure including combined cycle gas turbine power plants. waste-
to-energy plants, water facilities, and district cooling systems. She has diverse experience in operations and process excellence, as well as
assets, people and organisation management.
Her principal directorships include Keppel Infrastructure Holdings, Keppel Capital Holdings Pte Ltd, Keppel Energy Pte Ltd, Keppel Electric Pte
Ltd, Keppel Gas Pte Ltd, Keppel Eaas Pte Ltd, Keppel Seghers Pte Ltd, Keppel DHCS Pte Ltd, Keppel Energy Transition Centre Pte Ltd, Keppel
Water Services Pte Ltd, MET Holding AG, Keppel Urban Solutions Pte Ltd, Cleantech Renewable Assets Pte Ltd, Keppel Renewable Energy Pte
Ltd and Keppel Renewable Investments 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), Primus I Investment Holdings
Pte Ltd and Primus II Investment Holdings Pte Ltd.
Thomas Pang Thieng Hwi, 58
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 has 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, 57
Master of Management Studies (Marketing and Sales Management), University of Bombay; Bachelor of Engineering (Mechanical Engineering),
University of Jabalpur.
Mr Mann assumed the role of Chief Executive Officer at M1 Limited (M1) on 6 December 2018 and was appointed to the Board of M1 on
11 June 2019. Mr Mann is also the Chief Digital Officer of Keppel Corporation, 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 currently holds directorships in several subsidiaries of M1 Limited. He is also a Director of Keppel Telecommunications &
Transportation Ltd, Keppel Digi Pte Ltd and Keppel Enterprise Services Pte. Ltd.
Past principal directorships in the last five years
Pareteum Asia Pte Ltd and Lebara Service Centre Limited
Annual Report 2022
229
Key Executives
Bridget Lee Siow Pei, 51
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, 50
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 26 years of experience in investment, corporate finance and asset management, of which more than 18 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.
Jopy Chiang, 38
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
private equity and investment banking, with more than US$10 billion of transaction and advisory experience in developed and emerging
markets of Asia Pacific, Europe, Middle East 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 a
track record of successful returns to investors.
Mr Chiang was previously the Head of Execution at Mizuho Asia Infra Capital. 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), One Eco Co., Ltd.
(Chairman), Philippine Coastal Storage & Pipeline Corporation (President), Ixom Holdings Pty Ltd., Australia and Wind Fund I AS.
Past principal directorships in last five years
Nil
230
Keppel Corporation Limited
Other Information Anthea Lee, 49
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 25 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, 52
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
Alvin Mah, 51
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 more than 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 the last five years
Nil
Annual Report 2022
231
Key Executives
Sharon Tay Lin Li, 46
Master of Science (Finance & Economics) and Bachelor of Science (Economics), London School of Economics and Political Science; CFA®
Charterholder.
Ms Tay is the Chief Executive Officer of Keppel Asia Infrastructure Fund, which is managed by Keppel Capital Alternative Asset Pte Ltd, a
wholly-owned subsidiary of Keppel Capital Holdings Pte Ltd (Keppel Capital).
Ms Tay has more than 20 years of experience in the infrastructure, private equity, fund management and banking industries, primarily in
Asia. She has extensive experience across all aspects of fund management, from capital raising and fund establishment to successful
implementation of the fund strategy across investments, portfolio construction, active asset management and exits. Ms Tay joined Keppel
Capital in September 2022 and is focused on building its private infrastructure funds business.
Prior to Keppel Capital, Ms Tay was the Head of Renewable Energy (Vietnam) at Sembcorp Industries, where she was responsible for driving
the growth initiatives and strategic direction for Sembcorp’s renewable energy business in Vietnam.
Prior to Sembcorp Industries, she held leadership roles in Asia Climate Partners, Daestrum Capital, Deutsche Asset Management, Macquarie
and Citibank, where she was focused on fund management and investments.
Ms Tay is a director of Keppel Asia Infra Fund (GP) Pte. Ltd., the general partner of Keppel Asia Infrastructure Fund. She also holds
directorships in several subsidiaries, associates, portfolio companies and joint venture companies of Keppel Asia Infrastructure Fund.
Past principal directorships in the last five years
Various subsidiaries and associated companies of Sembcorp Industries
Jee Kim, 50
Master of Finance and Bachelor of Science in Business Administration, Ewha Woman’s University, Seoul, Korea.
Ms Kim joined Keppel Capital Alternative Asset Pte Ltd, a wholly-owned subsidiary of Keppel Capital Holdings Pte Ltd in April 2022 as Chief
Executive Officer for the Core Infrastructure division. She brings with her over 24 years of experience in global infrastructure investment, other
alternative investments (including real estate and private equity), and financial services.
Ms Kim was previously Global Head of Infrastructure Investment at the National Pension Service of Korea (NPS), which is the third-largest
public pension fund in the world with US$768 billion in assets under management as at December 2021. She oversaw NPS’ US$26 billion
infrastructure portfolio in transport, utilities, power and energy, as well as telecommunications and digital infrastructure. Ms Kim held several
senior positions at NPS, including Head of NPS Singapore, where she developed an alternatives assets portfolio in Asia Pacific including
infrastructure, real estate and private equities, and built the investment team since 2015. She was also a member of the NPS Investment
Committee. Prior to that, she was involved in various aspects of investment and asset management in Prudential Asset Management Co.
Ltd. and Prudential Investment & Securities Co. Ltd, a wholly-owned subsidiary of Prudential Financial, Inc., an American Fortune Global 500
company.
Past principal directorships in the last five years
Nil
Carina Lim, 49
Bachelor of Science (Estate Management), Second Class Honours (Upper Division), National University of Singapore; Master of Management
(Financial Management), Macquarie Graduate School of Management, Sydney.
Ms Carina Lim is the Chief Executive Officer of Keppel Education Asset Fund and Executive Director of Keppel Capital Alternative Asset Pte
Ltd (KCAA). She has more than 25 years of experience in the real estate industry holding positions in investment, asset management, leasing,
sales and marketing prior to joining KCAA as a director in January 2019.
Ms Lim joined Alpha Investment Partners Limited (Alpha) in 2008 as Senior Manager and later assumed the role of Head of Asset
Management in 2013, where she oversaw asset management in Asia Pacific for a series of private closed-end funds across different risk
spectrums (including core, core-plus and value-add) and across different asset types. In Alpha, she led the implementation of various asset
strategies including asset optimisation, development, refurbishment, ESG and other value-add initiatives for the funds and was instrumental in
the successful divestment of the funds’ assets. To date, she has been involved in more than $8 billion worth of transactions across key cities
in Asia Pacific.
Prior to joining Alpha, she worked in the government sector as well as with large private developers in the areas of policies, leasing, marketing,
investment and asset management of office, business park and industrial sectors.
Past principal directorships in the last five years
Nil
232
Keppel Corporation Limited
Other Information
Major Properties
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
Land area: 9,710 sqm
46-storey office tower
with retail podium
Land area: 10,441 sqm
18-storey office tower
with a six-storey podium
999 years leasehold
Commercial office building with
rentable area of 81,142 sqm
99 years leasehold
Commercial office building with
rentable area of 123,048 sqm
99 years leasehold
Commercial office buildings with
rentable area of 160,170 sqm
99 years leasehold
Commercial office building with
rentable area of 123,877 sqm
99 years leasehold
Commercial office building with
rentable area of 35,881 sqm
8 Exhibition Street
Melbourne,
Australia
Land area: 4,330 sqm
35-storey office tower
with ancillary retail space
Freehold
Commercial office building with
rentable area of 45,032 sqm
8 Chifley Square
Sydney,
Australia
David Malcolm
Justice Centre
Perth,
Australia
Victoria Police Centre
Melbourne,
Australia
Pinnacle Office Park
Sydney,
Australia
T Tower
Seoul,
South Korea
KR Ginza II
Tokyo,
Japan
Keppel DC
Singapore 1
Serangoon,
Singapore
Keppel DC
Singapore 2
Tampines,
Singapore
Keppel DC
Singapore 3
Tampines,
Singapore
Keppel DC
Singapore 4
Tampines,
Singapore
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
Land area: 22,040 sqm
Three office towers of
8-storey, 7-storey and
4-storey
Freehold
Commercial office building with
rentable area of 34,898 sqm
Land area: 5,346 sqm
28-storey office tower
Freehold
Commercial office building with
rentable area of 21,216 sqm
Land area: 805 sqm
8-storey office tower
Freehold
Commercial office building with
rentable area of 3,427 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
Annual Report 2022
233
Other Information
Major Properties
Held By
Effective
Group
Interest
Keppel Pacific Oak US REIT
7%
234
Keppel Corporation Limited
Location
Keppel DC
Singapore 5
Jurong,
Singapore
DC1
Riverside Road,
Singapore
Gore Hill Data Centre
Sydney,
Australia
Description and
Approximate
Land Area
Land area: 7,742 sqm
5-storey data centre
Tenure
Usage
Expiring 31 August
2050, including further
term of 9 years
Data centre with rentable area of
8,717 sqm
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
21,881 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 1
Guangdong,
China
Guangdong Data
Centre 2
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
6,143 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: 78,021 sqm
7-storey data centre
50 years leasehold
Data centre with rentable area of
20,310 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
Freehold
Land area: 167,621 sqm
Business campus
comprising 19 office
buildings and 2 flex buildings
which are multi-tenanted
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
1800 West Loop
South
Houston,
USA
Land area: 7,627 sqm
A 21-storey high rise office
multi-tenanted property
Freehold
Commercial office building with
rentable area of 56,939 sqm
Commercial office building with
rentable area of 37,171 sqm
Other Information
Held By
Effective
Group
Interest
Location
Description and
Approximate
Land Area
Maitland
Promenade I & II
485 & 495 N Keller
Road,
Florida,
USA
Land area: 78,379 sqm
Office campus featuring
2 multi-tenanted office
buildings
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
Tenure
Freehold
Usage
Commercial office buildings with
rentable area of 42,804 sqm
Freehold
Commercial office building with
rentable area of 41,996 sqm
Keppel Bay Pte Ltd
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)
72%
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%
Reflections
at Keppel Bay
Singapore
Corals at
Keppel Bay
Singapore
I12 Katong
East Coast Road,
Singapore
Linglong Tiandi
Beijing,
China
The Kube
Shanghai,
China
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 19,720 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
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: 2,041,631 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
50 years BOT with
option for another two
10-years
A 5-star hotel in Yangon with
789 rooms
Annual Report 2022
235
Major Properties
Held By
Effective
Group
Interest
Location
Description and
Approximate
Land Area
Tenure
Usage
Keppel Land Watco I Co Ltd
61%
Keppel Land Watco II & III
Co Ltd
61%
Alpha DC Fund
65%
Saigon Centre
(Phase 1)
Ho Chi Minh City,
Vietnam
Saigon Centre
(Phase 2)
Ho Chi Minh City,
Vietnam
Keppel DC Sydney 1
New South Wales,
Australia
Land area: 2,730 sqm
25-storey office, retail
cum serviced apartments
development
50 years leasehold
Land area: 8,355 sqm
50 years leasehold
Commercial building with
rentable area of 11,683 sqm
office and 10,099 sqm of
serviced apartments
Commercial building with
rentable area of 38,000 sqm
retail, 34,000 sqm office and 195
units of serviced apartments
Land area: 3,840 sqm
5-storey data centre
Freehold
Data centre with rentable area of
3,975 sqm
Huizhou Data Centre
Guangdong,
China
Land area: 41,487 sqm
4-storey internet data
centre block
50 years leasehold
Data centre with rentable area of
12,648 sqm
Keppel Heights (Wuxi)
Property Development Co
Ltd
100%
Park Avenue Heights
Wuxi,
China
Land area: 66,010 sqm
Nanjing Zhijun Property
Development Co Ltd
25%
Noblesse IX
Nanjing,
China
Land area: 38,285 sqm
70 years lease
(residential)
40 years lease
(commercial)
70 years lease
(residential)
40 years lease
(commercial)
Keppel Hong Yuan
(Tianjin Eco-City) Property
Development Co Ltd,
Keppel Hong Tai (Tianjin
Eco-City) Property
Development Co Ltd and
Keppel Hong Teng
(Tianjin Eco-City) Property
Development Co Ltd
100%
Seasons City in Sino-
Singapore Tianjin
Eco-City
Tianjin,
China
Land area: 40,451 sqm
40 years leasehold
A mixed-use development with
1,281 residential units with
commercial facilities in Liangxi
District
A mixed-use development with
about 181 residential units and
417 commercial units in Xuanwu
District
A commercial sub-centre
comprising of retail mall and an
office tower
Gaenari IV Pte Ltd (owned
by Keppel Sustainable
Urban Renewal Pte Ltd)
39.5%
Samhwan Building
Seoul,
South Korea
Land area: 5,095 sqm
Freehold
A 15-storey office building with
rentable area of 17,956 sqm
Properties under development
K-Commercial Pte Ltd
100%
Parksville Development
Pte Ltd
100%
Keppel Bay Pte Ltd
100%
Keppel DC Fund II
41%
Keppel REIT
Shanghai Floraville Land
Co Ltd
47%
99%
Harbourfront Three Pte Ltd
39%
Keppel Towers
Hoe Chiang Road,
Singapore
19 Nassim
Nassim Hill,
Singapore
Keppel Bay Plot 6
Singapore
Greater Shanghai
Data Centre,
Shanghai,
China
Huailai Data Centre,
Hebei,
China
Land area: 9,126 sqm
Freehold
Land area: 5,785 sqm
99 years leasehold
Land area: 43,701 sqm
99 years leasehold
Commercial office buildings
*(2024)
A 101-unit condominium
development
*(2023)
A proposed 86-unit waterfront
condominium development
Land area: 22,226 sqm
5-storey internet data
centre block
50 years leasehold
Data centre with rentable area of
29,801 sqm
Land area: 33,248 sqm
50 years leasehold
Data centre with rentable area of
63,305 sqm
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
*(2024)
Land area: 28,579 sqm
99 years leasehold
Park Avenue Central
Shanghai,
China
The Reef at King’s
Dock
Singapore
A 429-unit waterfront
condominium development
*(2025)
A 1,403-unit residential
development with commercial
and SOHO facilities in Binhu
District
*(2023 Phase 7)
Keppel Lakefront (Wuxi)
Property Development Co
Ltd
100%
Waterfront
Residences
Wuxi,
China
Land area: 215,230 sqm
70 years lease
(residential)
40 years lease
(commercial)
236
Keppel Corporation Limited
Other Information Effective
Group
Interest
100%
100%
Held By
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 and Keppel Hong Teng
(Tianjin Eco-City) Property
Development Co Ltd
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%
Bangalore Tower Pvt Ltd
100%
Memphis 1 Pte Ltd
60%
*
Expected year of completion
Location
Seasons Residences
Wuxi,
China
Seasons City in Sino-
Singapore Tianjin
Eco-City
Tianjin,
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
KPDL Grade-A Office
Tower
Bangalore,
India
Keppel DC
Singapore 7
Singapore
Description and
Approximate
Land Area
Land area: 180,258 sqm
Tenure
Usage
70 years lease
(residential)
40 years lease
(commercial)
A 2,904-unit residential
development with integrated
facilities in Xinwu District
*(2023 Phase 5b)
Land area: 40,451 sqm
40 years leasehold
A commercial sub-centre
comprising of two office towers
Land area: 226,972 sqm
Land area: 664,492 sqm
70 years lease
(residential)
40 years lease
(commercial)
70 years lease
(residential)
40 years lease
(commercial)
A mixed-used development
in North Island within Sino-
Singapore Tianjin Eco-City
(*2024-2027)
A mixed-use development
in North Island within Sino-
Singapore Tianjin Eco-City
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: 2,827,534 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
Land area: 30,898 sqm
Freehold
Land area: 24,892 sqm
60 years leasehold
A township with about 4,261
apartments, commercial
complexes and public sports
facilities
*(2027-2031)
A residential development
with about 2,350 units and
commercial space in Thu Thiem
New Urban Area, District 2
*(2025-2026)
A residential township with more
than 3,000 units and commercial
space at South Rach Chiec,
District 2
A 6,624 residential unit
integrated township
development located in Thane
(*2031)
A Grade A office development
located in the prime commercial
hub of Yeshwanthpur
(*2026)
Data centre with rentable area of
15,544 sqm
Annual Report 2022
237
Group Five-Year Performance
Selected Profit or Loss Account Data
($ million)
Revenue
Operating profit
Profit before tax
Net profit from Continuing Operations
Net profit from Discontinued Operations
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, debtors, cash, long term assets & other assets
Disposal group and assets classified as held for sale
Intangibles
Total assets
Less:
2018
2019
2020
2021#
2022
5,965
1,055
1,245
948
-
948
5,224
6,825
14,410
-
129
26,588
7,580
6,574
877
954
707
-
707
6,684
7,121
15,834
-
1,683
31,322
8
(255)
(506)
-
(506)
6,972
7,355
15,161
1,009
1,609
32,106
6,611^
1,129^
1,611^
1,248
(225)
1,023
6,830
7,525
15,851
528
1,589
32,323
6,620 ^
565 ^
1,095 ^
839
88
927
5,501
8,324
6,146
9,530
1,564
31,065
Creditors and other current liabilities
6,912
7,325
7,470
7,049
3,522
Liabilities directly associated with disposal group and
assets classified as held for sale
Borrowings & lease liabilities
Other non-current 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 gearing (times)
Employees
Average headcount (number)
Wages & salaries ($ million)
-
7,549
550
11,577
-
11,657
694
11,646
115
12,603
762
11,156
38
12,017
778
12,441
4,224
10,380
1,026
11,913
11,268
11,211
10,728
11,655
11,178
-
309
-
435
-
428
401
385
401
334
11,577
11,646
11,156
12,441
11,913
67.7
52.3
30.0 *
6.22
6.15
10.8
8.4
1.7 *
(0.48)
48.8
38.9
20.0
6.17
5.25
7.9
6.3
1.9
(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)
67.4
52.1
33.0
6.38
5.49
10.5
8.1
1.6
(0.78)
18,186
1,018
18,297
1,187
18,452
1,166
16,393
1,151
17,238
1,162
*
#
^
Includes the special dividend paid of 5.0 cents per share.
In accordance with SFRS(I) 5 Non-current Assets Held for Sale and Discontinued Operations, the performance of Keppel O&M, as a separate reportable operating segment,
excluding certain out-of-scope assets, are presented as Discontinued Operations for the period, with comparative information for FY2021 re-presented accordingly.
Numbers are for continuing operations.
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.
238
Keppel Corporation Limited
Other Information
2022
Group revenue from continuing operations of $6,620 million was at about the same level as 2021. Revenue from Energy & Environment
increased by $670 million or 19% to $4,230 million led by higher electricity and gas sales, and higher revenue recognition from Keppel Seghers’
projects abroad. Revenue from Urban Development decreased by $725 million to $904 million mainly due to lower revenue from property
trading projects in China as a result of fewer units completed and handed over during the year. Revenue from Connectivity increased by $31
million to $1,291 million mainly due to M1 reporting higher mobile and enterprise revenue, including contribution from the newly acquired
Glocomp Systems (M) Sdn Bhd, partly offset by lower handset sales, and lower revenue from the logistics business following the divestment
of the logistics portfolio in South-East Asia and Australia in July 2022. Revenue from Asset Management increased by $33 million to $195
million mainly due to higher acquisition fees and management fees resulting from increased acquisitions completed.
Group net profit from continuing operations of $839 million was $409 million or 33% lower than that in 2021. Energy & Environment registered
a net profit of $172 million in 2022, reversing the net loss of $189 million in 2021, which had included an impairment of $318 million relating
to the Group’s exposures to KrisEnergy, partially offset by share of Floatel’s net restructuring gain of $215 million. For the current year, the
segment recorded higher electricity and gas sales and contributions from Keppel Seghers’ projects abroad, higher share of results from an
associated company in Europe, and lower share of losses from Floatel. These were partially offset by the provision for supply chain cost
escalation in the environment business. Net profit from Urban Development decreased by $481 million to $282 million mainly due to lower
contributions from property trading projects in China, lower fair value gains from investment properties, as well as lower gains from enbloc
sales. The segment completed the disposals of Upview and Sheshan Riviera projects in Shanghai in the current year, as compared to the
recognition of gains from the disposals of 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 in 2021. Connectivity’s net profit of $37 million was $27
million lower than that in 2021. This was mainly due to the absence of gains from the divestment of interests in Keppel Logistics (Foshan) and
Wuhu Sanshan Port Company Limited in 2021, and lower fair value gains on data centres, which was partly offset by higher net profit from
M1. Net profit from Asset Management increased by $10 million to $311 million mainly due to higher fair value gains on investment properties
recorded by Keppel REIT, and higher fee income arising from acquisitions completed. These were partly offset by mark-to-market losses
from investments, as well as lower fair value gains on data centres recorded by Keppel DC REIT and private funds. Net profit from Corporate
& Others decreased by $272 million to $37 million mainly due to lower fair value gains on investments and lower investment income. In the
prior year, the segment recorded significant distribution income and fair value gains from its investments in new technology and start-ups, in
particular, Envision AESC Global Investment L.P..
The Group’s taxation decreased year-on-year mainly due to lower taxable profit from Urban Development. Taking into account income tax
expenses, non-controlling interests and profit attributable to holders of perpetual securities, the Group’s net profit from continuing operations
attributable to shareholders for 2022 was $839 million. All segments were profitable including Energy & Environment which had registered a
loss in 2021. Including discontinued operations, the Group’s net profit attributable to shareholders was $927 million, which was $96 million
lower year-on-year.
The discontinued operations recorded a net profit of $88 million, as compared to the net loss of $225 million in 2021. In addition to revenue
recognition from new projects and higher progressive revenue recognition on existing projects, the offshore & marine business recorded
higher investment income, gains from the divestment of Keppel Smit Towage Pte Limited and Maju Maritime Pte Ltd, and partial write-back
of impairments made in 2020 on certain legacy rigs. These were partly offset by the provisions made for cost overruns on certain projects
in Keppel’s O&M’s yard in the US, mainly arising from shortage of manpower, higher-than-expected labour costs, as well as COVID-related
supply chain disruptions. Apart from the yard in the US, the projects in Keppel O&M’s other yards, including the FPSOs projects with Petrobras,
are progressing well and are on-track and within budget. The Group has also ceased depreciation for the relevant assets classified under the
disposal group held for sale. Major jobs delivered by the offshore & marine business in 2022 include a jackup, an FSRU conversion repair, an
LNG containership, an LNG carrier repair, two Trailer Suction Hopper Dredgers (TSHD), jumboisation of a TSHD, two offshore substations, a
wind turbine installation vessel upgrade and fabrication of leg component for an offshore wind turbine installation vessel.
Revenue ($ billion)
Pre-Tax Profit ($ million)
Net Profit ($ million)
10.0
8.0
6.0
4.0
2.0
0
2,000
1,500
1,000
500
0
-500
1,200
800
400
0
-400
-800
2018
2019
2020
2021#
2022
2018
2019
2020
2021#
2022
6.0
7.6
6.6
6.6^
6.6^
1,245
954
(255)
1,611^
1,095^
2018
948
2019
707
2020
2021
(506)
1,023
2022
927
#
^
In accordance with SFRS(I) 5 Non-current Assets Held for Sale and Discontinued Operations, the performance of Keppel O&M, as a separate reportable operating segment,
excluding certain out-of-scope assets, are presented as Discontinued Operations for the period, with comparative information for FY2021 re-presented accordingly.
Including discontinued operations, revenue for FY2021 was $8,625 million and pre-tax profit for FY2021 was $1,335 million.
Numbers are for continuing operations.
Annual Report 2022
239
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 $506 million in the preceding year. Profits from Urban Development, Asset Management and Connectivity
businesses were partly offset by losses at Energy & Environment.
Shareholders’ Fund ($ billion)
Total Equity ($ billion)
Market Capitalisation ($ billion)
15.0
12.0
9.0
6.0
3.0
0
15.0
12.0
9.0
6.0
3.0
0
15.0
12.0
9.0
6.0
3.0
0
2018
11.3
2019
11.2
2020
10.7
2021
11.7
2022
11.2
2018
11.6
2019
11.6
2020
11.2
2021
12.4
2022
11.9
2018
10.7
2019
12.3
2020
9.8
2021
9.3
2022
12.7
240
Keppel Corporation Limited
Other Information 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.
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.
Annual Report 2022
241
Group Five-Year Performance
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 and 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 $815 million in 2017. Urban Development was the largest contributor to the Group’s net profit with a 100% share, followed by Asset
Management’s 20% and Connectivity at breakeven, while Energy & Environment and Corporate & Others contributed negative 18% and
negative 2% to the Group’s net profit respectively.
242
Keppel Corporation Limited
Other Information Value-Added Statements
($ million)
Value added from:
Revenue earned
Less: purchases of materials and services
Gross value added from operation
Interest and investment income
Share of results of associated companies and joint ventures
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
Distributions to our Perpetual Securities holders
Dividends to our partners in subsidiaries
Dividends to our shareholders
2018
2019
2020
2021
2022^
5,965
(4,175)
1,790
174
221
435
2,620
988
285
205
-
20
526
751
7,580
(5,267)
2,313
242
147
103
2,805
6,574
(4,591)
1,983
191
(162)
(441)
1,571
8,625
(6,603)
2,022
221
467
398
3,108
1,163
192
1,120
253
1,116
325
313
-
12
418
743
292
-
24
273
589
251
-
11
346
608
9,419
(7,527)
1,892
225
540
221
2,878
1,133
278
293
12
33
643
981
Total Distribution
2,024
2,098
1,962
2,049
2,392
Balance retained in the business:
Depreciation & amortisation
Perpetual Securities holders
Non-controlling interests share of profits in subsidiaries
Retained profit for the year
182
-
(8)
422
596
375
-
43
289
707
414
-
(26)
(779)
(391)
406
3
(27)
677
1,059
242
-
(38)
282
486
2,620
2,805
1,571
3,108
2,878
Average headcount (number)
18,186
18,297
18,452
16,393
17,238
Productivity data:
Value added per employee ($’000)
Value added per dollar employment cost ($)
Value added per dollar sales ($)
144
2.65
0.44
153
2.41
0.37
85
1.40
0.24
190
2.78
0.36
167
2.54
0.31
^
FY2022 value-added includes the results of the Discontinued Operations. In accordance with SFRS(I) 5 Non-current Assets Held for Sale and Discontinued Operations, the
performance of Keppel O&M, as a separate reportable operating segment, excluding certain out-of-scope assets, are presented as Discontinued Operations for the period.
($ million)
4,000
3,000
2,000
1,000
0
-1,000
2,620
2,805
1,571
3,108
2,878
Depreciation & Retained Profit
Interest Expenses & Dividends
Taxation
Wages, Salaries & Benefits
2018
2019
2020
2021
2022
596
751
285
988
707
743
192
(391)
1,059
589
253
608
325
486
981
278
1,163
1,120
1,116
1,133
Annual Report 2022
243
Other Information
Share Performance
Turnover
(million)
Share Prices
($)
200
180
160
140
120
100
80
60
40
20
0
20
18
16
14
12
10
8
6
4
2
0
2018
2019
2020
2021
2022
Turnover
High and Low Prices
Share Price ($)*
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)
2018
2019
2020
2021
2022
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
7.26
7.72
5.06
6.64
52.1
33.0
5.0
12.7
5.49
7.26
4.5
13.9
1.3
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 special dividend paid of 5.0 cents per share.
244
Keppel Corporation Limited
Other Information
Shareholding Statistics
As at 2 March 2023
Issued and Fully paid-up capital (including Treasury Shares) : $1,305,667,320.62
Issued and Fully paid-up capital (excluding Treasury Shares) : $893,084,096.76
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
: 1,758,493,316
: 62,064,451 (3.53%)
: 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
DB Nominees (Singapore) Pte Ltd
CGS-CIMB Securities (Singapore) Pte. Ltd.
Lim Chee Onn
DBS Vickers Securities (Singapore) Pte Ltd
No. of
Shareholders
275
15,729
42,990
10,269
30
%
0.40
22.70
62.04
14.82
0.04
No. of
Shares
10,864
12,436,095
172,595,894
329,615,249
1,243,835,214
%
0.00
0.71
9.82
18.74
70.73
69,293
100.00
1,758,493,316
100.00
No. of
Shares
371,408,292
302,250,360
122,154,247
105,272,696
98,034,659
86,613,406
47,529,023
16,088,730
15,221,133
12,187,735
9,944,972
7,728,492
7,040,000
6,425,953
5,748,487
4,100,000
3,677,719
3,552,213
2,579,282
2,323,700
%
21.12
17.19
6.95
5.99
5.57
4.93
2.70
0.91
0.87
0.69
0.57
0.44
0.40
0.37
0.33
0.23
0.21
0.20
0.15
0.13
1,229,881,099
69.95
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
BlackRock, Inc3
371,408,292
21.12
-
-
4,138,307
88,473,960
0.23
5.03
375,546,599
88,473,960
21.35
5.03
Notes:
1
2
3
“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 4,138,307 shares in which its subsidiaries and associated companies have direct or deemed interests.
BlackRock,Inc is deemed interested in 88,473,960 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 2 March 2023, approximately 73% 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.
Annual Report 2022
245
Other Information
Notice of Annual General Meeting and Closure of Books
eppel
Corporation
Keppel Corporation Limited
Company Registration No. 196800351N
(Incorporated in the Republic of Singapore)
NOTICE IS HEREBY GIVEN that the 55th Annual General Meeting of the Company will be convened and held on Friday, 21st April 2023 at
3.00 p.m. (Singapore time) at Suntec Singapore Convention and Exhibition Centre, Summit 1-2, Level 3, 1 Raffles Boulevard Suntec City,
Singapore 039593 to transact the following business:
Ordinary Business
1.
2.
3.
To receive and adopt the Directors’ Statement and Audited Financial Statements for the year ended 31 December 2022.
Resolution 1
To declare a final tax-exempt (one-tier) dividend of 18.0 cents per share for the year ended 31 December 2022 (2021:
final tax-exempt (one-tier) dividend of 21.0 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/herself for re-election pursuant to Regulation 84 of the
Constitution (see Note 9):
(1) Danny Teoh
(2) Till Vestring
(3) Veronica Eng
4.
To re-elect the following directors, who being appointed by the board of directors of the Company (“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, each offers himself for re-election (see Note 9):
(1) Olivier Blum
(2) Jimmy Ng
To approve the sum of up to S$2,491,000 as directors’ fees for the year ending 31 December 2023 (2022: S$2,491,000)
(see Note 10).
Resolution 3
Resolution 4
Resolution 5
Resolution 6
Resolution 7
Resolution 8
To re-appoint PricewaterhouseCoopers LLP as the auditors of the Company, and authorise the Directors to fix their
remuneration.
Resolution 9
5.
6.
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 10
(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;
246
Keppel Corporation Limited
Other Information
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 11).
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 11
Annual Report 2022
247
Notice of Annual General Meeting and Closure of Books
(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 12).
9.
That:
Resolution 12
(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 13).
To transact such other business which can be transacted at this AGM.
248
Keppel Corporation Limited
Other Information
NOTICE IS ALSO HEREBY GIVEN THAT the Share Transfer Books and the Register of Members of the Company will be closed on 28 April
2023 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 #14-07 Singapore 098632 up to 5.00 p.m. on 28
April 2023 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 28 April 2023 will be entitled to the proposed final dividend. The
proposed final dividend if approved at this AGM will be paid on 10 May 2023.
BY ORDER OF THE BOARD
Caroline Chang/Samantha Teong
Company Secretaries
Singapore, 30 March 2023
Annual Report 2022
249
Notice of Annual General Meeting and Closure of Books
Notes:
1. The AGM will be held, in a wholly physical format, at Suntec Singapore Convention and Exhibition Centre, Summit 1-2, Level 3, 1 Raffles Boulevard Suntec City, Singapore 039593
on Friday, 21 April 2023 at 3.00 p.m. (Singapore time), 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. There will be no option for Shareholders to participate virtually. Printed copies of this Notice of
AGM and the accompanying Proxy Form will be sent by post to members. These documents will also be published on the Company’s website at https://www.kepcorp.com/
en/investors/agm-egm and the SGXNet.
2. The Company may implement such COVID-19 safe management measures (including vaccination-differentiated safe management measures) at the AGM as may be required
or recommended under any regulations, directives, measures or guidelines that may be issued from time to time by any government or regulatory agency in light of the COVID-19
situation in Singapore. Shareholders should check the Company’s website at https://www.kepcorp.com/en/investors/agm-egm and the SGXNet regularly for updates.
3.
(a) A member 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 member 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 member 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 member. 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.
(c)
“Relevant Intermediary” has the meaning ascribed to it in Section 181 of the Companies Act 1967 (“Companies Act”).
4. Arrangements relating to:
(a) attendance at the AGM by Shareholders, including 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”);
(b) submission of questions to the Chairman of the Meeting by Shareholders, including CPF/SRS Investors, in advance of, or at, the AGM, and addressing of substantial and
relevant questions in advance of, or at, the AGM; and
(c) voting at the AGM by Shareholders, including CPF/SRS Investors, or (where applicable) their duly appointed proxy(ies),
are set out in the accompanying announcement dated 30 March 2023. This announcement may be accessed at the Company’s website at https://www.kepcorp.com/en/
investors/agm-egm and the SGXNet.
A member can appoint the Chairman as his/her/its proxy, but this is not mandatory.
5. 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) by post to the office of the Share Registrar at 1 Harbourfront Avenue, Keppel Bay Tower #14-07, Singapore 098632; or
(ii) by 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 18 April 2023 (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.
6. Voting by Investors (including CPF/SRS Investors): The Proxy Form is not valid for use by investors holding shares of the Company through Relevant Intermediaries
(“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 may appoint Chairman as proxy to vote on his/her behalf at the AGM, in which case he/she should approach his/her respective CPF Agent Banks or SRS
Operators to specify his/her voting instructions. 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 11 April 2023.
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.
7. Submission of Questions: All Shareholders (including CPF/SRS Investors) may submit questions relating to the business of the AGM in advance of or 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 11 April
2023 (“Q&A Submission Deadline”) in the following manner:
(i) by email to investor.relations@kepcorp.com; or
(ii) 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).
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 15 April 2023, and (ii) after the Q&A Submission Deadline or 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.
8. All documents (including the Annual Report 2022, Proxy Form, this Notice of AGM and appendices to this Notice of AGM) and 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.
9. Detailed information on these directors can be found in the “Board of Directors” section of the Annual Report 2022.
Mr Danny Teoh will, upon his re-election, continue to serve as the non-executive and non-independent Chairman of the Board and as a member of the Nominating, Remuneration
and Board Risk Committees. Mr Teoh spent 27 years in KPMG LLP, Singapore and over the years, held various senior positions including member of KPMG International Board
and Council, Head of Audit and Risk Advisory Services and Head of Financial Services. He was the Managing Partner of KPMG LLP, Singapore from 2005 to 2010.
Mr Till Vestring will, upon his re-election, continue to serve as non-executive and lead independent Director, and as the Chairman of the Remuneration Committee and a member
of the Nominating Committee. Mr Vestring serves as Advisory Partner of Bain & Company Southeast Asia. His career at Bain & Company has included postings in Munich,
Sydney, Hong Kong, Tokyo and Singapore and he has served as head of Bain’s Automotive & Industrial Practice in Asia, Managing Partner for Southeast Asia, as well as on
Bain’s global Partner Nomination & Compensation Committee. He has more than 25 years of management consulting experience in Asia, advising leading companies on
portfolio strategy, growth, mergers and acquisitions, organisation and performance improvement.
250
Keppel Corporation Limited
Other Information
Ms Veronica Eng will, upon her re-election, continue to serve as a non-executive and independent Director, and the Chairman of the Board Risk Committee and as a member of
the Audit Committee. Ms Eng retired as a Founding Partner of Permira in late 2015. Over her 30-year career with Permira, Ms Eng held a number of key positions in the firm and
had extensive experience in a wide range of roles in relation to its funds’ investments across sectors and geographies. She served on the board of Permira and its Executive
Committee, chaired the Investment Committee and was the Fund Minder to various Permira funds. In addition, she also had oversight of Permira’s firm-wide risk management
as well as its operations in Asia. She is also a Professor (Practice) at the National University of Singapore’s Business School.
Mr Olivier Blum will, upon his re-election, continue to serve as a non-executive and independent Director, and member of the Board Sustainability and Safety Committee. Mr
Blum is currently the Executive Vice-President of Schneider Electric’s Energy Management Business and a member of the company’s Executive Committee. Prior to this, Mr
Blum was the Chief Strategy & Sustainability Officer of Schneider Electric, where he led the development of the company’s strategic, sustainability and quality initiatives, while
steering its merger, acquisitions, and divestment activities globally. Before this, he was on Schneider Electric’s Executive Committee as the company’s Chief Human Resources
Officer. Currently based in Hong Kong, Mr Blum has been living and working in Asia for the last two decades, during which he has held leadership positions in China and India.
Mr Blum has been a Non-Executive Director on both AVEVA Group PLC (as Remuneration Committee member) and Delta Dore Boards since 2020, and is the Chairman of
Luminous Power Technologies (P) Ltd, India. Mr Blum is a graduate of the Grenoble Business School in France.
Mr Jimmy Ng will, upon his re-election, continue to serve as a non-executive and independent Director, and member of the Board Risk Committee. Mr Ng is the Group Chief
Information Officer, as well as Head of Group Technology & Operations (GTO) at DBS Bank. He possesses more than 30 years of regional and global experience in both
wholesale banking and consumer banking businesses with DBS Bank, RBS, ABN Amro Bank and J.P. Morgan. In his current role in DBS, Mr Ng manages more than 10,000
technology and 5,000 operations professionals across the region and is responsible for the technology transformation for DBS. Prior to his current appointment, Mr Ng was the
Chief Audit Executive for Group DBS and the Head of Consumer Banking Operations, where he spearheaded the transformation of the Audit function and the Consumer Banking
Operations using advanced data analytics and machine learning techniques. Mr Ng holds a Bachelor of Science degree in Information Systems from the National University of
Singapore and a Masters in Business Administration (Banking & Finance) from Nanyang Technological University.
10. Resolution 8 is to approve the payment of Directors’ fees for the non-executive Directors of the Company during FY2023. 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 FY2023. In the event that the amount proposed is insufficient,
approval will be sought at the next AGM in the financial year ending 31 December 2024 (“2024 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 2024 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 2024 AGM provided that it does not fall within any applicable restricted period of trading (“2024 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 2024 Trading Day. In the event that the first trading day after the date
of the 2024 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 FY2023 (calculated on a pro-rated basis, where applicable) in cash.
Details of the Directors’ remuneration for FY2022 are set out on page 96 of the Annual Report 2022. The non-executive Directors will abstain from voting, and will procure that
their respective associates abstain from voting, in respect of Resolution 8.
11. Resolution 10 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 10 is passed, and any subsequent bonus issue, consolidation or sub-division of Shares.
12. Resolution 11 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 22 April 2022. 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.
13. Resolution 12 relates to the renewal of a mandate given by Shareholders on 22 May 2003, as updated consequent to the divestment of the offshore and marine business of the
group on 28 February 2023, 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.
14. Any reference to a time of day is made by reference to Singapore time.
15. Personal Data Privacy:
By submitting an instrument appointing proxy(ies), and/or representative(s) to attend, speak and vote at the AGM and/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), 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, takeover rules, regulations and/or guidelines (collectively, the “Purposes”), (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, and (iii) agrees
to provide the Company with written evidence of such prior consent upon reasonable request.
Annual Report 2022
251
Corporate Information
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
Olivier Blum
Jimmy Ng
Audit Committee
Tham Sai Choy (Chairman)
Veronica Eng
Penny Goh
Shirish Apte
Remuneration Committee
Till Vestring (Chairman)
Danny Teoh
Jean-François Manzoni
Penny Goh
Nominating Committee
Jean-François Manzoni (Chairman)
Danny Teoh
Till Vestring
Board Risk Committee
Veronica Eng (Chairman)
Tham Sai Choy
Penny Goh
Shirish Apte
Jimmy Ng
Board Sustainability and Safety
Committee
Teo Siong Seng (Chairman)
Danny Teoh
Loh Chin Hua
Olivier Blum
Company Secretaries
Caroline Chang
Samantha Teong
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
252
Keppel Corporation Limited
Other Information Financial Calendar
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
Despatch of Annual Report to Shareholders
Annual General Meeting
2022 Proposed final dividend
Books closure date
Payment date
FY 2023
Financial year-end
Announcement of 2023 1Q Business Updates
Announcement of 2023 half year results
Announcement of 2023 3Q Business Updates
Announcement of 2023 full year results
31 December 2022
21 April 2022
28 July 2022
27 October 2022
2 February 2023
30 March 2023
21 April 2023
5.00 p.m., 28 April 2023
10 May 2023
31 December 2023
20 April 2023
27 July 2023
19 October 2023
25 January 2024
Annual Report 2022
253
Other Information This page is intentionally left blank
Proxy Form
eppel
Corporation
Keppel Corporation Limited
Company Registration No. 196800351N
(Incorporated in the Republic of Singapore)
ANNUAL GENERAL MEETING
IMPORTANT
1.
The AGM (as defined below) will be held, in a wholly physical format, at Suntec Singapore
Convention and Exhibition Centre, Summit 1-2, Level 3, 1 Raffles Boulevard Suntec
City, Singapore 039593 on Friday, 21 April 2023 at 3.00 p.m. 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. There
will be no option for Shareholders to participate virtually. Printed copies of the Notice of
AGM and this Proxy Form will be sent by post to shareholders of (“Shareholders”) of the
Company (as defined below). These documents will also be published on the Company’s
website at https://www.kepcorp.com/en/investors/agm-egm and the SGXNet.
Arrangements relating to attendance at the AGM by Shareholders, including investors
who hold shares of the Company (“Shares”) through the Central Provident Fund (“CPF”) or
the Supplementary Retirement Scheme (“SRS” and such investors, “CPF/SRS Investors”),
submission of questions to the Chairman of the Meeting by Shareholders, including CPF/
SRS Investors, in advance of, or at, the AGM, and addressing of substantial and relevant
questions in advance of, or at, the AGM, and voting at the AGM by Shareholders, including
CPF/SRS Investors, or (where applicable) their duly appointed proxy(ies), are set out in the
accompanying announcement dated 30 March 2023. This announcement may be accessed at
the Company’s website at https://www.kepcorp.com/en/investors/agm-egm and the SGXNet.
This Proxy Form is not valid for use by investors holding Shares through relevant intermediaries
(as defined in Section 181 of the Companies Act 1967) (including CPF/SRS investors) and
shall be ineffective for all intents and purposes if used or purported to be used by them. An
Investor (other than a CPF/SRS Investor) who wishes to vote should refer to the instructions
set out in the Notice of AGM and the announcement by the Company dated 30 March 2023.
Personal Data Privacy: By submitting this proxy form, a member of the Company 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 proxies to vote on his/her/its behalf at the AGM.
2.
3.
4.
5.
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 55th Annual General Meeting of the Company (“AGM”) to be held on Friday, 21st April 2023 at
3.00 p.m. at Suntec Singapore Convention and Exhibition Centre, Summit 1-2, Level 3, 1 Raffles Boulevard Suntec City, Singapore 039593 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 Danny Teoh as Director
4. Re-election of Till Vestring as Director
5. Re-election of Veronica Eng as Director
6. Re-election of Olivier Blum as Director
7. Re-election of Jimmy Ng as Director
8. Approval of fees to non-executive Directors for FY2023
9. Re-appointment of Auditors
Special Business
10. Issue of additional shares and convertible instruments
11. Renewal of Share Purchase Mandate
12. Renewal of Shareholders’ Mandate for Interested Person Transactions
*
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 ____________________________ 2023
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 member of the Company should insert the total number of Shares held in the proxy form. If a member 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 member (in both the Register of Members and the Depository Register).
2.
(a) A member 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 member 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 member 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 member. 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.
(c)
“Relevant Intermediary” has the meaning ascribed to it in Section 181 of the Companies Act 1967 (“Companies Act”).
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Keppel Corporation Limited
c/o Boardroom Corporate & Advisory Services Pte Ltd
1 Harbourfront Avenue
Keppel Bay Tower #14-07
Singapore 098632
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3. Completion and return of the proxy form shall not preclude a member from attending and voting in person at the meeting. Any appointment of a proxy or proxies will be
revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the proxy
form, to the meeting.
4. The proxy form must be submitted to 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 to be received no later than 3.00 p.m. on 18 April 2023, being 72 hours before the time appointed for the holding of the 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.
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 in writing. Where a proxy form is signed on behalf of the appointor by an attorney,
the power of attorney or other authority 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. A corporation which is a member of the Company may authorise, by resolution of its directors or other governing body, such person as it thinks fit to act as its representative
at the AGM, in accordance with Section 179 of the Companies Act.
7. 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 members whose Shares are entered against their names in the Depository
Register, the Company shall be entitled to reject any proxy form lodged if such members 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.
8. Any reference to a time of day is made by reference to Singapore time.
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
Company Registration Number: 196800351N