KEPPEL CORPORATION LIMITED

Transcription

1 KEPPEL CORPORATION LIMITED Co. Reg. No N (Incorporated in the Republic of Singapore) FULL YEAR FINANCIAL STATEMENTS & DIVIDEND ANNOUNCEMENT TABLE OF CONTENTS Paragraph Description Page CHIEF EXECUTIVE OFFICER S ADDRESS I - II FINANCIAL STATEMENTS & DIVIDEND ANNOUNCEMENT GROUP PROFIT AND LOSS ACCOUNT 1 2 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 4 3 BALANCE SHEETS 5 4 STATEMENTS OF CHANGES IN EQUITY 8 5 CONSOLIDATED STATEMENT OF CASH FLOWS 12 6 AUDIT 14 7 AUDITORS REPORT 14 8 ACCOUNTING POLICIES 14 9 CHANGES IN THE ACCOUNTING POLICIES REVIEW OF GROUP PERFORMANCE VARIANCE FROM FORECAST STATEMENT PROSPECTS DIVIDEND SEGMENT ANALYSIS REVIEW OF SEGMENT PERFORMANCE INTERESTED PERSON TRANSACTIONS REPORT OF PERSONS OCCUPYING MANAGERIAL POSITIONS WHO ARE RELATED TO A DIRECTOR, CHIEF EXECUTIVE OFFICER OR SUBSTANTIAL SHAREHOLDER 22

2 KEPPEL CORPORATION LIMITED ADDRESS BY MR CHOO CHIAU BENG, CHIEF EXECUTIVE OFFICER FULL YEAR ENDED 31 DECEMBER Another Record Performance I am pleased to announce that was yet another record year for Keppel Corporation. Our net profit grew by 14% to a new high of nearly $1.5 billion. This is the fifth year running that our net profit has surpassed the $1 billion mark. Also for the fifth consecutive year, our Return on Equity has remained above 20%. Economic Value Added has also increased to $1,024 million for the year. Final Dividend With these strong results, the Board of Directors will be recommending a total distribution to shareholders of 43 cents per share for the whole year. This will comprise the interim dividend of 17 cents per share, and a proposed final dividend of 26 cents per share. Difficult Environment was an eventful year, which saw natural disasters and political and economic turmoil around the world. We started 2012 amidst a weak global economy. Europe s sovereign debt crisis has deepened in the last quarter, weighing down the global economic outlook. With the contagion spreading to more Eurozone countries, any resolution will be long in coming. There also continues to be uncertainty over the US economy with job creation remaining sluggish. China s growth is expected to moderate further. In Singapore, slower growth is expected for the coming years. Oil prices have strengthened in and are expected to remain firm this year, with WTI crude currently around US$100 a barrel and Brent crude around US$110 a barrel. Business Highlights in Amidst the volatile economic environment around the globe, our businesses have worked hard in to capture value in regions and sectors of growth and opportunity. In, our Offshore & Marine Division was able to capture a good share of the global high specification jackup orders, ending the year with a record level of orders secured totalling $10 billion. Most of these new orders were for our proprietary designs, in particular our KFELS B Class jackup which is now setting the standard for the industry. We also successfully launched our KFELS Super A Class jackup. We are delighted that our customers have continued to entrust us with their projects and we remain committed to building close partnerships with them to deliver solutions tailored to their needs. On the back of our proven track record to deliver on time, on target in Brazil, we have also secured the first deepwater drilling rig for our Angra yard from Sete Brasil. This rig will be built to our proprietary DSS38E design and we will work hard to ensure that we meet our customer s expectations. Chief Executive Officer s Address, I

3 Last year, we successfully delivered a total of 40 major projects on the back of enhanced productivity, careful management and the dedication of our project teams. Keppel has also moved into adjacencies in our Offshore & Marine business, adding a new dimension to our business model to capture more value. In Brazil, we are moving to build offshore support vessels in anticipation of demand, which will be offered for bare-boat charter or sale upon completion. Our investment in Dyna-Mac, a topside module fabricator, strengthens our capabilities as a core solutions provider in floating production systems. Early this year, we also expanded our suite of solutions for offshore wind farm installation with the acquisition of proprietary jacket foundation technology. These are strategic moves into niche areas from which we hope to see recurring income in the years ahead. In Infrastructure, Keppel Energy continued to see good earnings momentum from its power plant on Jurong Island. In October, Keppel Integrated Engineering (KIE) completed the handing over of the Domestic Solid Waste Management Centre in Qatar, and started the operations and maintenance phase of this project. KIE is now focusing on the completion of the Doha North Sewage Treatment Works project. Keppel Telecommunications & Transportation (Keppel T&T) expanded its warehousing capacity in Singapore and China to service the healthy demand for integrated logistics services in these markets. Keppel T&T has also expanded its quality data centre portfolio to tap the growing demand for data centres worldwide. In, the external environment was a difficult year for Property. In two of our key markets, Singapore and China, governments rolled out a series of cooling measures to stabilise home prices. Nonetheless, we managed to sell 2,500 units in Singapore and the region. K-REIT Asia s acquisition of Keppel Land s stake in the Ocean Financial Centre last year is a strategic move for both companies. K-REIT Asia has now grown to become one of the top office REITs in Singapore with a sterling portfolio of Grade A offices in the heart of our financial district. With a strengthened balance sheet, Keppel Land will be able to scout for good sites and assets at attractive prices. Prospects in 2012 Let me now touch on the prospects for our businesses in In Offshore & Marine, we will focus on executing the orders that we have secured, maintaining our track record for on-time, on-budget deliveries and extracting maximum value from each project. Global demand for oil is projected to continue rising. Major oil companies have also announced increased budgets for exploration and production to address the decline in production capacity and replace depleting reserves. Dayrates have been strengthening for both jackups and semisubmersibles. With offshore drilling moving towards deeper waters, we are also seeing improving prospects for our deepwater solutions. Over the past year, our new proprietary products have been gaining market acceptance. Our three KFELS N Class jackups, designed specifically for the harsh environment in the North Sea, have started working for their owner. Our first multipurpose self-elevating platform has also secured a charter for wind farm foundation work in the North Sea. The accommodation semisubmersibles we delivered have also clinched long-term charters. Our KFELS Super A Class jackup for Ensco and a semisubmersible drilling tender for Seadrill, both ordered last year, have already been awarded charters. We are confident that with continued innovation, our Chief Executive Officer s Address, II

4 proprietary designs will meet the evolving needs of the industry and believe that like the KFELS B Class jackup design, they will in time become the industry benchmark. In our Infrastructure Division, Keppel Energy s 800 MW expansion of its existing 500 MW co-generation power plant on Jurong Island is on schedule for completion to meet the sustained energy demand in Singapore. In Asia, urbanisation continues unabated. Last year, China witnessed a milestone of having more of its population living in cities than in rural communities. Many cities elsewhere in Asia are also growing rapidly. Rapid urban growth has also sparked concerns and interest in tougher regulations for environment protection and in minimising carbon emission. This trend will create demand for environmental and urban solutions around the world, especially in Asia, presenting more opportunities for KIE to offer commercially viable solutions for waste and water treatment. Demand for logistics and warehousing services is expected to be sustained with Asia s continued growth. Keppel T&T will capture value from its enhanced logistics network with its recent capacity expansion in China and Southeast Asia. With the strong growth in global cloud-computing needs, Keppel T&T is also looking to grow its data centre business in Singapore and abroad. Despite signs of moderation, Asia s growth is expected to remain on a sustainable footing. Net office demand is likely to remain positive in 2012 with new entrants setting up businesses here in Singapore. As such, office rentals are expected to stay healthy. Keppel s well-located office buildings have continued to command good rentals, with prospects of upward revisions for rental renewals. We will also continue to grow our property fund management business, scanning for good opportunities to enhance our portfolio of quality assets. We continue to believe in the fundamentals of demand from Asia s growing middle class for homes and will continue to position ourselves to capture value. Keppel Land will continue to seek out good sites at attractive prices in our key markets of Singapore, China, Vietnam and Indonesia. Conclusion These past few years have been a period of uncertainty and volatility in our external environment. was difficult will not be any easier. Europe will remain the main headwind in 2012 as a solution requires political resolve, courage and economic pain. At Keppel, we are aware of the mounting challenges in the year ahead. Nonetheless, with Keppel s hallmark Can Do! spirit, we will strive to build on our core competencies, sharpen our competitive edge, strengthen our businesses for sustainable growth, and focus on delivering value to our shareholders, while continuing to make safety a top priority in all our business units. Now, let me now hand over to Mr Loh Chin Hua, our newly appointed Chief Financial Officer, for a review of the Group s full year financial performance. Chin Hua is no stranger to the Group, having headed Alpha Investment Partners, our real estate fund management arm, since Chin Hua, over to you Chief Executive Officer s Address, III

5 KEPPEL CORPORATION LIMITED Full Year Financial Statements & Dividend Announcement UNAUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER The Directors of Keppel Corporation Limited advise the following unaudited results of the Group for the year ended 31 December. 1. GROUP PROFIT AND LOSS ACCOUNT for the year ended 31 December Note Restated +/- % Revenue 10,082,467 9,139, Materials & subcontract costs (i) (6,273,001) (5,767,767) +8.8 Staff costs (ii) (1,432,889) (1,367,077) +4.8 Depreciation & amortisation (iii) (208,571) (188,633) Other operating expenses (270,699) (259,820) +4.2 Operating profit 1,897,307 1,556, Investment income (iv) 24,589 7, Interest income 113, , Interest expense (v) (98,230) (64,701) Share of results of associated companies (vi) 239, , Profit before tax & exceptional items 2,177,420 1,889, Exceptional items 1,135, , Profit before tax 3,312,702 2,550, Taxation (640,506) (560,060) Profit for the year 2,672,196 1,990, Attributable to: Shareholders of the Company Profit before exceptional items 1,491,214 1,307, Exceptional items 349, , ,840,512 1,511, Non-controlling interests 831, , ,672,196 1,990, Earnings per ordinary share Before exceptional items - basic 83.8 cts 74.3 cts diluted 83.0 cts 73.8 cts After exceptional items - basic cts 85.9 cts diluted cts 85.3 cts Return on equity 21.6% 21.5% +0.5 Economic value added before exceptional items 1,024, , The results for the year ended 31 December are restated due to retrospective application of INT FRS 115, which is effective from. INT FRS 115 with its Accompanying Note was issued on 26 August and the Clarification Note was issued on 7 June. A detailed explanation is provided in paragraph 9. Comparatives for earnings per ordinary share have been restated and also adjusted for bonus issue of shares. Keppel Corporation Limited, Page 1 of 22

6 NOTES TO GROUP PROFIT AND LOSS ACCOUNT 1a. Pre-tax profit of the Group is arrived at after charging/(crediting) the following: Note +/- % Share-based payment expenses 51,274 38, Write-down of fixed assets Profit on sale of fixed assets (vii) (26,959) (4,949) Profit on sale of investments (viii) (35,434) (11,795) Provision - stocks & work-in-progress - doubtful debts 11,870 4,043 5,104 5, Bad debts written off >500.0 Stocks recovered (60) (169) Fair value loss/(gain) - Investments - Forward contracts - Financial derivatives (ix) 27,980 (14,111) 7,589 (8,028) (14,813) 1,742 NM Foreign exchange loss (x) 14,318 53, NM - Not Meaningful Note: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) Materials & subcontract costs increased mainly as a result of higher revenue from the Infrastructure Division and Property Division. Staff costs increased mainly due to higher manpower cost in the Property Division. Higher depreciation charges were mainly attributable to capital expenditure of the Offshore & Marine and Infrastructure Divisions. Investment income increased mainly due to higher dividend income received from investments in the Property Division. Higher interest expense was mainly attributable to higher borrowings. Share of profits of associated companies was lower mainly due to lower contribution from associated companies in the Property Division. Profit on sale of fixed assets increased largely due to disposals in the Offshore & Marine Division. Higher profit on sale of investments due to higher investment trading activities. Fair value loss (mark-to-market) on investment portfolio held for trading was due to fall in stock prices. Foreign exchange differences mainly arose from the revaluation of assets denominated in United States dollar to Singapore dollar. 1b. Taxation expenses were higher because of increased profit and income subjected to higher tax rate in foreign jurisdiction. Keppel Corporation Limited, Page 2 of 22

7 1c. Exceptional items for the year comprise the following: $ 000 $ 000 Gain on disposal of subsidiaries, associated companies and investments 25,309 8,645 Impairment of assets / loss provision (165,300) (183,945) Fair value gain on investment properties 1,117,155 64,719 Share of associated companies 208, ,821 Costs associated with restructuring of operations and others (50,127) (4,139) 1,135, ,101 Taxation (195,971) (164,150) 939, ,951 Non-controlling interests share of exceptional items (590,013) (293,019) Net exceptional items 349, ,932 1d. Earnings per ordinary share Restated +/-% Earnings per ordinary share of the Group based on net profit attributable to shareholders:- (i) Based on weighted average number of shares * cts 85.9 cts Weighted average number of shares ( 000) 1,778,594 1,759, (ii) On a fully diluted basis * cts 85.3 cts Adjusted weighted average number of shares ( 000) 1,796,253 1,771, * Comparative figures for EPS have been adjusted for the bonus issue of shares. 1e. Breakdown of sales $ 000 $ 000 Restated +/-% First Half Sales reported for first half year 4,575,472 4,709, Operating profit after tax and exceptional items before deducting non-controlling interests reported for first half year 796, , Second Half Sales reported for second half year 5,506,995 4,429, Operating profit after tax and exceptional items before deducting non-controlling interests reported for second half year 1,875,958 1,207, f. There was no extraordinary item during the year. Keppel Corporation Limited, Page 3 of 22

8 2. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December Restated +/- % Profit for the year 2,672,196 1,990, Available-for-sale assets - Fair value changes arising during the year (i) (146,669) 130,996 NM - Realised and transferred to profit & loss account (ii) (18,906) 1,663 NM Cash flow hedges - Fair value changes arising during the year, net of tax (iii) (116,932) (1,247) > Realised and transferred to profit & loss account (iv) 10,725 (47,508) NM Foreign exchange translation - Exchange differences arising during the year (v) 15,617 (100,559) NM - Realised and transferred to profit & loss account (4,077) 10,013 NM Share of other comprehensive (expense)/income of associated companies (vi) (13,880) 3,133 NM Other comprehensive (expense)/income for the year, net of tax (274,122) (3,509) >500.0 Total comprehensive income for the year 2,398,074 1,986, Attributable to: Shareholders of the Company 1,570,211 1,547, Non-controlling interests 827, , ,398,074 1,986, NM - Not Meaningful Note: (i) (ii) (iii) (iv) (v) (vi) Fair value losses were mainly attributable to lower quoted prices of available-for-sale assets. These represented fair value gains on available-for-sale assets, which were transferred to profit & loss account upon realisation. Fair value losses were due mainly to the hedging differential on forward exchange contracts. These represented cash flow hedges, which were transferred to profit & loss account upon realisation. The translation gains arose from strengthening of foreign currencies, such as Renminbi and Australian dollar against the Singapore dollar. The translation losses in prior year were mainly due to weakening of foreign currencies such as United States dollar, Renminbi and Vietnamese dong. The share of other comprehensive losses of associated companies mainly related to share of translation losses, share of fair value losses from available-for-sale asset reserve and cash flow hedging reserve. Share of other comprehensive gains of associated companies in prior year mainly related to share of fair value gains from available-for-sale asset reserve offset by share of translation losses. Keppel Corporation Limited, Page 4 of 22

9 3. BALANCE SHEETS as at 31 December G r o u p Restated Restated C o m p a n y Share capital 1,016, , ,908 1,016, ,409 Reserves 6,374,270 5,508,975 4,939,957 4,193,452 3,783,517 Share capital & reserves 7,390,382 6,415,384 5,772,865 5,209,564 4,689,926 Non-controlling interests 3,800,674 2,866,384 2,614, Capital employed 11,191,056 9,281,768 8,387,107 5,209,564 4,689,926 Represented by: Fixed assets 2,715,517 2,243,150 2,157,172 4,080 5,120 Investment properties 4,610,107 3,207,539 3,051, Subsidiaries ,928,160 3,580,409 Associated companies 4,232,047 3,586,904 2,651, Investments 310, , , Long term assets 267,060 28, , Intangibles 98, ,676 90, ,234,063 9,473,811 8,649,316 3,932,579 3,585,944 Current assets Stocks & work-in-progress in excess of related billings 6,218,945 3,940,126 2,877, Amounts due from: - subsidiaries ,204,813 1,732,273 - associated companies 403, , ,922 1,483 2,575 Debtors 2,027,933 1,958,993 1,727,099 78,164 82,416 Short term investments 577, , , Bank balances, deposits & cash 3,020,454 4,245,990 2,935,787 1, ,073 12,248,507 10,987,143 8,284,987 2,286,081 2,024,337 Current liabilities Creditors 5,323,267 4,342,963 4,051, , ,435 Billings on work-in-progress in excess of related costs 1,863,881 1,638,193 1,683, Provisions 77,674 83,586 68, Amounts due to: - subsidiaries , ,792 - associated companies 63, , , Term loans 808, , ,117 17,668 9,047 Taxation 478, , ,515 22,244 26,147 Bank overdrafts , ,616,126 7,092,930 7,241, , ,421 Net current assets 3,632,381 3,894,213 1,043,281 1,781,921 1,608,916 Non-current liabilities Term loans 4,068,696 3,675, , , ,000 Deferred taxation 606, , ,080 4,936 4,934 4,675,388 4,086,256 1,305, , ,934 Net assets 11,191,056 9,281,768 8,387,107 5,209,564 4,689,926 Group net (debt)/cash (1,856,717) 177,522 1,176,592 n.a. n.a. Group net (gearing)/cash ratio (0.17x) 0.02x 0.14x n.a. n.a. Keppel Corporation Limited, Page 5 of 22

10 NOTES TO BALANCE SHEETS 3a. Group s borrowings and debt securities (i) Amount repayable in one year or less, or on demand Secured As at As at Unsecured Secured Unsecured 444, ,377 30, ,974 (ii) Amount repayable after one year Secured As at As at Unsecured Secured Unsecured 912,950 3,155,746 1,221,141 2,454,827 (iii) Details of any collateral Certain subsidiaries of the Company pledged their assets in order to obtain loans from financial institutions. The net book value of properties and other assets pledged/mortgaged to financial institutions amounted to $4,196,584,000 (31 December : $2,552,970,000). 3b. Net asset value Group Restated Company +/-% +/-% Net asset value per ordinary share * $4.14 $ $2.92 $ Net tangible asset per ordinary share * $4.09 $ $2.92 $ * Based on share capital of 1,783,716,751 ordinary shares as at the end of the financial year (31 December : 1,766,065,268 ordinary shares). The comparative figures have been adjusted for the bonus issue of shares. Keppel Corporation Limited, Page 6 of 22

11 3c. Balance sheet analysis Group shareholders funds increased from $6.42 billion at 31 December to $7.39 billion at 31 December. The increase was mainly attributable to retained profits for the year, partially offset by fair value loss on cash flow hedges and available-for-sale assets, and payment of final dividend of 23.7 cents per share (adjusted for the bonus issue) in respect of financial year and interim dividend of 17.0 cents per share for financial year. Group total assets of $24.48 billion at 31 December were $4.02 billion or 19.6% higher than the previous year end. Increase in fixed assets was largely due to capital expenditure for the expansion of Keppel Merlimau cogen power plant and other operational capex. Investment properties increased due to acquisition of four levels of strata office at Prudential Tower, redevelopment cost of Ocean Financial Centre and the fair value gain on investment properties in. Increase in investments in associated companies were mainly due to acquisition of interest in Dyna-Mac Holdings Ltd, further investments in existing companies, fair value gain on investment properties and retained profits in. Long term assets increased due to advance payment for acquisition of a subsidiary. Higher stocks & work-in-progress was due to land acquisition cost and development expenditure incurred for Property Division and project cost incurred for Offshore & Marine jobs. Group total liabilities of $13.29 billion at 31 December were $2.11 billion or 18.9% higher than the previous year end. Higher billings on work-in-progress in excess of related costs were attributable to deposits received and progress billings for Offshore & Marine contracts. Increase in creditors was mainly from Offshore & Marine Division, and accrual for development costs in Property Division. Higher level of term loans was mainly due to expenditure in Property Division. Group net debt at 31 December was $1,857 million as compared to group net cash of $178 million at 31 December. This was mainly due to operational cash outflow, capital expenditure and dividend payment. Keppel Corporation Limited, Page 7 of 22

12 4. STATEMENTS OF CHANGES IN EQUITY for the year ended 31 December 4a. Statement of changes in equity of the Group Share Capital Attributable to equity holders of the Company Foreign Exchange Capital Revenue Translation Reserves Reserves Account $ 000 Share Capital & Reserves Noncontrolling Interests $ 000 Capital Employed $ 000 As at 1 January As previously reported 906, ,624 5,318,836 (139,083) 6,739,786 2,984,097 9,723,883 Effect of INT FRS (324,402) - (324,402) (117,713) (442,115) As restated 906, ,624 4,994,434 (139,083) 6,415,384 2,866,384 9,281,768 Total comprehensive income for the year Profit for the year - - 1,840,512-1,840, ,684 2,672,196 Other comprehensive income * - (273,886) - 3,585 (270,301) (3,821) (274,122) Total comprehensive income for the year - (273,886) 1,840,512 3,585 1,570, ,863 2,398,074 Transactions with owners, recognised directly in equity Contributions by and distributions to owners Dividend paid - - (723,857) - (723,857) - (723,857) Share-based payment - 48, ,981 2,213 51,194 Transfer of statutory, capital and other reserves to revenue reserves - 34,788 (34,788) Dividend paid to non-controlling shareholders (157,867) (157,867) Cash subscribed by non-controlling shareholders , ,275 Other adjustments ,132 Shares issued 109,703 (10,422) ,281-99,281 Total contributions by and distributions to owners 109,703 73,729 (758,645) - (575,213) 90,371 (484,842) Changes in ownership interests in subsidiaries Acquisition of additional interest in subsidiaries - - (26,890) - (26,890) (1,625) (28,515) Disposal of interest in a subsidiary company without loss of control - 6, ,890 18,101 24,991 Disposal of interest in a subsidiary company with loss of control (420) (420) Total change in ownership interests in subsidiaries - 6,890 (26,890) - (20,000) 16,056 (3,944) Total transactions with owners 109,703 80,619 (785,535) - (595,213) 106,427 (488,786) As at 31 December 1,016, ,357 6,049,411 (135,498) 7,390,382 3,800,674 11,191,056 * Details of other comprehensive income have been included in the consolidated statement of comprehensive income. Keppel Corporation Limited, Page 8 of 22

13 4a. Statement of changes in equity of the Group (cont d) Share Capital Attributable to equity holders of the Company Foreign Exchange Capital Revenue Translation Reserves Reserves Account $ 000 Share Capital & Reserves Noncontrolling Interests $ 000 Capital Employed $ 000 As at 1 January As previously reported 832, ,289 4,695,478 (83,328) 5,985,347 2,727,226 8,712,573 Effect of INT FRS (212,482) - (212,482) (112,984) (325,466) As restated 832, ,289 4,482,996 (83,328) 5,772,865 2,614,242 8,387,107 Total comprehensive income for the year Profit for the year - - 1,511,064-1,511, ,094 1,990,158 Other comprehensive income* - 91,717 - (55,659) 36,058 (39,567) (3,509) Total comprehensive income for the year - 91,717 1,511,064 (55,659) 1,547, ,527 1,986,649 Transactions with owners, recorded directly in equity Contributions by and distributions to owners Dividend paid - - (991,006) - (991,006) - (991,006) Share-based payment - 36, ,633 1,608 38,241 Transfer of statutory, capital and other reserves to revenue reserves - (345) 441 (96) Dividend paid to noncontrolling shareholders (129,580) (129,580) Cash subscribed by noncontrolling shareholders ,091 5,091 Equity component of convertible bond issued by a subsidiary - 6, ,317 5,733 12,050 Other adjustments - - (1) - (1) 9,495 9,494 Shares issued 73, ,501-73,501 Total contributions by and distributions to owners 73,501 42,605 (990,566) (96) (874,556) (107,653) (982,209) Changes in ownership interests in subsidiaries Disposal to noncontrolling shareholders Acquisition of additional interest in subsidiaries - (20,987) (9,060) - (30,047) (96,987) (127,034) Acquisition of subsidiaries ,973 16,973 Total change in ownership interests in subsidiaries - (20,987) (9,060) - (30,047) (79,732) (109,779) Total transactions with equity holders 73,501 21,618 (999,626) (96) (904,603) (187,385) (1,091,988) As at 31 December 906, ,624 4,994,434 (139,083) 6,415,384 2,866,384 9,281,768 * Details of other comprehensive income have been included in the consolidated statement of comprehensive income. Keppel Corporation Limited, Page 9 of 22

14 4b. Statement of changes in equity of the Company Share Capital Capital Reserves Revenue Reserves Total As at 1 January 906, ,020 3,657,497 4,689,926 Profit / Total comprehensive income for the year - - 1,098,316 1,098,316 Transactions with equity holders, recorded directly in equity Dividend paid - - (723,857) (723,857) Share-based payment - 45,898-45,898 Shares issued 109,703 (10,422) - 99,281 Total transactions with equity holders 109,703 35,476 (723,857) (578,678) As at 31 December 1,016, ,496 4,031,956 5,209,564 As at 1 January 832,908 91,555 3,833,363 4,757,826 Profit / Total comprehensive income for the year , ,140 Transactions with equity holders, recorded directly in equity Dividend paid - - (991,006) (991,006) Share-based payment - 34,465-34,465 Shares issued 73, ,501 Total transactions with equity holders 73,501 34,465 (991,006) (883,040) As at 31 December 906, ,020 3,657,497 4,689,926 Keppel Corporation Limited, Page 10 of 22

15 4c. Share capital Issued share capital and treasury shares Number of shares As at 1 January 1,605,513,880 1,594,496,680 Issue of shares under share option scheme 15,064,000 11,017,200 Issue of shares under restricted share plan 1,255,541 Bonus issue 161,883,330 As at 31 December 1,783,716,751 1,605,513,880 On 6 May, 161,883,330 bonus shares had been allotted and issued pursuant to the bonus issue at one bonus share for every ten existing ordinary shares ( bonus issue ). As at 31 December, the Company is not holding any treasury shares (31 December : Nil). Share options As at 31 December, there were unexercised options for 41,616,020 of unissued ordinary shares (31 December : 58,730,100 ordinary shares) under the KCL Share Options Scheme. The unexercised options have been adjusted during the year to reflect the bonus issue. KCL Performance Share Plan ( KCL PSP ) As at 31 December, the number of contingent shares granted but not released were 1,388,000 (31 December : 680,000) for KCL PSP. Based on the achievement factor, the actual release of the awards in ordinary shares of the Company could range from zero to a maximum of 2,082,000 under KCL PSP. The contingent shares granted on 30 June but not released have been adjusted during the year to reflect the bonus issue. KCL Restricted Share Plan ( KCL RSP ) As at 31 December, the number of contingent shares granted but not released was 4,158,177 (31 December : 3,757,966). Based on the achievement factor, the actual release of the awards in ordinary shares of the Company could range from zero to a maximum of 4,158,177 under KCL RSP. As at 31 December, the number of awards released but not vested was 2,652,870 (31 December : Nil) for KCL RSP. The awards released but not vested have been adjusted during the year to reflect the bonus issue. 4d. Capital reserves $ 000 Group Company $ 000 $ 000 $ 000 Share option reserve 175, , , ,020 Fair value reserve 199, , Hedging reserve (7,296) 95, Bonus issue by subsidiaries 40,000 40, Others 52,638 10, , , , ,020 Keppel Corporation Limited, Page 11 of 22

16 5. CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 December Note Restated OPERATING ACTIVITIES Operating profit 1,897,307 1,556,311 Adjustments: Depreciation and amortisation 208, ,633 Share-based payment expenses 51,274 38,437 Profit on sale of fixed assets (26,959) (4,949) Impairment of assets - 10,715 Operational cash flow before changes in working capital 2,130,193 1,789,147 Working capital changes: Stocks & work-in-progress (1,856,459) (594,375) Debtors (314,907) (292,304) Creditors 563,681 (65,033) Investments (217,518) (71,646) Intangibles (10,199) (5,256) Advances to associated companies (223,772) 928 Translation of foreign subsidiaries 9,414 (73,660) 80, ,801 Interest received 119, ,888 Interest paid (98,118) (57,223) Income taxes paid (343,424) (293,226) Net cash (used in)/from operating activities (242,077) 450,240 INVESTING ACTIVITIES Acquisition of subsidiary and business 5a - (49,184) Advance payment for acquisition of a subsidiary (207,930) - Acquisition and further investment in associated companies (477,340) (343,788) Acquisition of fixed assets and investment properties (875,773) (873,073) Proceeds from disposal of interest in a subsidiary - 16,281 Disposal of subsidiaries 5b (153) - Return of capital and disposal of associated companies 53, ,165 Proceeds from disposal of fixed assets 73,936 58,430 Dividends received from investments and associated companies 175, ,119 Net cash used in investing activities (1,257,774) (643,050) FINANCING ACTIVITIES Proceeds from share issues 99,281 73,501 Proceeds from non-controlling shareholders of subsidiaries 245,275 5,091 Proceeds from disposal of interest in a subsidiary 24,991 - Proceeds from term loans 1,231,567 3,221,224 Repayment of term loans (422,128) (921,644) Acquisition of additional shares in subsidiaries (22,211) (117,464) Dividend paid to shareholders of the Company (723,857) (627,183) Dividend paid to non-controlling shareholders of subsidiaries (157,867) (129,580) Net cash from financing activities 275,051 1,503,945 Net (decrease)/increase in cash and cash equivalents (1,224,800) 1,311,135 Cash and cash equivalents as at 1 January 4,245,254 2,934,119 Cash and cash equivalents as at 31 December 5c 3,020,454 4,245,254 Free cash flow (1,499,851) (192,810) Keppel Corporation Limited, Page 12 of 22

17 NOTES TO CONSOLIDATED STATEMENT OF CASH FLOWS 5a. Acquisition of subsidiary and business In prior year, the fair values of net assets of subsidiary and business acquired were as follows: Fixed assets 123,536 Investments 185 Stocks & work-in-progress 8,425 Long term receivables 120 Amount due to associates (494) Debtors 20,764 Bank balances and cash 16,643 Creditors (25,679) Loans (10,625) Current and deferred tax (415) Non-controlling interests (16,973) 115,487 Goodwill on consolidation 10,560 Amount previously accounted for as associated companies (42,689) Purchase consideration 83,358 Less: Purchase consideration payable (17,531) Less: Bank balances and cash acquired (16,643) Cash outflow on acquisition net of cash acquired 49,184 5b. Disposal of subsidiaries During the financial year, the fair values of net assets of subsidiaries disposed were as follows: Fixed assets (258) (1,007) Long term receivables - (589,440) Stocks & work-in-progress (932) (14,538) Debtors (297) (86,376) Bank balances and cash (1,583) (57,949) Creditors 5,388 21,492 Current and deferred tax ,441 Non-controlling interests 420-2,858 (713,377) Amount accounted for as associated company - 349,552 Amount accounted for as advance from associated company - (57,947) Distribution of dividend in specie (less expenses) - 363,823 2,858 (57,949) Net profit on disposal (4,288) - Sale proceeds (1,430) (57,949) Add: Bank balances and cash disposed 1,583 57,949 Cash outflow on disposal net of cash disposed 153-5c. 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 3,020,454 4,245,990 Bank overdrafts - (736) 3,020,454 4,245,254 Keppel Corporation Limited, Page 13 of 22

18 5d. Cash flow analysis Net cash used in operating activities was $242 million compared to net cash from operating activities of $450 million in the previous year. This was mainly due to increased working capital requirements and higher income taxes paid, partly offset by higher operating profit. Net cash used in investment activities was $1,258 million. The Group spent $1,561 million on acquisitions and operational capex. This comprised principally advance payment for acquisition of a subsidiary, acquisition of interest in associated company, Dyna-Mac Holdings Ltd, further investment in associated companies, acquisition of four levels of strata office at Prudential Tower, further investment in Marina Bay Financial Centre, redevelopment cost of Ocean Financial Centre, capital expenditure for the expansion of Keppel Merlimau cogen power plant and other operational capex. Divestment and dividend income totalled $303 million. Free cash flow was negative $1,500 million as compared to negative $193 million in the previous year. 6. AUDIT The financial statements have not been audited nor reviewed by our auditors. 7. AUDITORS' REPORT Not applicable 8. ACCOUNTING POLICIES Except as disclosed in paragraph 9 below, the Group has applied the same accounting policies and methods of computation in the financial statements for the current financial year compared with those of the audited financial statements as at 31 December. 9. CHANGES IN THE ACCOUNTING POLICIES The Group adopted the new/revised Financial Reporting Standards ( FRS ) and Interpretations of FRS ( INT FRS ) that are effective for annual periods beginning on or after 1 January. Changes to the Group s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS and INT FRS. The following are the new or amended FRS that are relevant to the Group: FRS 24 (Revised) Related Party Disclosures Amendments to FRS 32 Financial Instruments: Presentation - Amendments relating to Classification of Rights Issues Amendments to INT FRS 114 Prepayments of a Minimum Funding Requirement INT FRS 115 Agreements for the Construction of Real Estate INT FRS 119 Extinguishing Financial Liabilities with Equity Instruments Improvements to FRSs (issued in ) The adoption of the above FRS and INT FRS did not have any significant impact on the financial statements of the Group, except for the following: Keppel Corporation Limited, Page 14 of 22

19 INT FRS 115 Agreements for the Construction of Real Estate On 26 August, the Accounting Standards Council ( ASC ) issued INT FRS 115 with an accompanying note that explains the application of the Interpretation to property development sales in Singapore by considering the Singapore legal framework. INT FRS 115 clarifies when revenue and related expenses from a sale of real estate unit should be recognised if an agreement between a developer and a buyer is reached before the construction of real estate is completed. INT FRS 115 determines that such contracts which are not classified as construction contracts in accordance with FRS 11 Construction Contracts can only be accounted for using the percentage of completion ( POC ) method if the entity continuously transfers to the buyer control and the significant risks and rewards of ownership of the work in progress in its current state as construction progresses. Following the implementation of INT FRS 115 and its Accompanying Note with effect from 1 January, the Group has adopted the Completion of Construction ( COC ) method to account for its overseas trading projects after taking into consideration the legal framework and industry practices in those countries in which the Group operates. For Singapore trading projects under progressive payment scheme, the Group has applied the POC method. The ASC has issued a clarification note on 7 June to highlight that the Accompanying Note does not address the accounting treatment for sales under Deferred Payment Scheme ( DPS ). With this clarification note and after consultation with public accounting firms, sales of real estate under DPS have to be accounted under the COC method. Impact on the comparatives for the Financial Statements: The Financial Statements have been prepared to take into account the effects of implementation of INT FRS 115 as described in the preceding paragraphs. This change in accounting policy has been applied retrospectively. Accordingly, the comparatives have been restated. The financial effect of adopting INT FRS 115 is as follows: Group Profit and Loss Account Decrease in revenue (643,314) Decrease in materials and subcontract costs 443,131 Increase in share of results of associated companies 62,962 Decrease in taxation 20,572 Decrease in profit for the year (116,649) Attributable to: Shareholders of the Company (111,920) Non-controlling interests (4,729) (116,649) Decrease in basic EPS before exceptional items Decrease in diluted EPS before exceptional items 6.3 cts 6.3 cts Group Balance Sheet Decrease in revenue reserves (324,402) (212,482) Decrease in non-controlling interests (117,713) (112,984) Decrease in associated companies (19,819) (72,101) Decrease in stocks & work-in-progress in excess of related billings (500,701) (300,518) Decrease in taxation (29,620) (22,436) Decrease in deferred taxation (48,785) (24,717) Keppel Corporation Limited, Page 15 of 22

20 10. REVIEW OF GROUP PERFORMANCE The Group performed well in despite the volatility in the global markets. Group net profit increased by 14% to reach a record high of $1,491 million. Earnings per share rose by 13% to 83.8 cents. Return on equity was 21.6%. Economic Value Added before exceptional items was $1,024 million, $60 million above the previous year. Group revenue exceeded $10 billion, which was 10% higher than. Revenue from Offshore & Marine Division of $5,706 million was slightly above that of the previous year. During the year, the Division completed and delivered nine rigs, ten specialised vessels, seven FPSO/FSO conversions, one drillship outfitting, one drillship upgrade, one livestock carrier conversion and several rig upgrade/repair contracts. Revenue from Infrastructure Division increased by $353 million or 14% to $2,863 million. Higher revenue generated from the cogen power plant in Singapore was partly offset by lower revenue from Keppel Integrated Engineering. Revenue from Property Division of $1,467 million was $425 million or 41% above the previous year. Overseas operations reported higher revenue, due largely to the completion of several projects/phases in India, China and Vietnam in. Higher revenue was also reported by Singapore trading projects, such as Reflections at Keppel Bay, The Lakefront Residences, The Luxurie and Madison Residences due to higher sales and percentage of physical completion achieved. At the pre-tax level, Group profit of $2,177 million was 15% higher than FY. Pre-tax earnings from Offshore & Marine Division increased by 14% to $1,417 million. This was due to cost savings and higher margins on jobs. Profit from Infrastructure Division increased by 29% to $120 million as a result of better performance from Keppel Energy, partly offset by losses from Keppel Integrated Engineering. Property Division recorded profit of $582 million, an increase of 19% over the preceding year. This was mainly attributable to higher contribution from several residential projects in Singapore, China and Vietnam. Profit from Investments Division was lower due to higher costs in. Exceptional gains of $349 million comprised principally net appreciation in value of investment properties, partially offset by provisions for cost overruns and completion delays for the EPC contracts in Qatar, and impairment of non-performing assets. After taking into account income tax expenses and non-controlling interests, net profit including exceptional items attributable to shareholders was $1,841 million. Excluding exceptional items, attributable profit was $1,491 million. Offshore & Marine remained the largest contributor to net profit with 71%, followed by Property Division with 20%, Infrastructure Division with 6% and Investments with 3%. In the opinion of the Directors, no factor has arisen between 31 December and the date of this report which would materially affect the results of the Group and the Company for the year just ended. 11. VARIANCE FROM FORECAST STATEMENT No forecast was previously provided. Keppel Corporation Limited, Page 16 of 22

21 12. PROSPECTS The Offshore & Marine Division secured a record $10 billion of new orders for the year. The net order book stood at $9.4 billion with deliveries extending into The Division continues to see good prospects for the Offshore & Marine industry with the projected increase in exploration and production (E&P) expenditure in the next few years. The Division will continue to focus on innovation, quality, on-time delivery and safety. In the Infrastructure Division, the expansion of the Keppel Merlimau cogen power plant from the current 500MW to 1,300MW is on schedule for completion by Keppel Integrated Engineering continues to make progress with the execution of its Engineering, Procurement and Construction contracts in Qatar and the United Kingdom. The Division believes that the experience gained from our Qatar and United Kingdom projects will enable us to better assess future opportunities for environmental engineering projects. The Division will also seek opportunities to expand its logistics business and focus on acquiring high-quality data centre assets. The Property Division sold about 480 homes in Singapore for the year, primarily in suburban projects such as The Luxurie in Sengkang and The Lakefront Residences in Jurong Lake District. The recent imposition of additional buyer s stamp duty in Singapore is expected to affect buying sentiments in In China, the Property Division also sold about 1,400 homes for the year, mostly in townships. Home sales in China have slowed down due to property cooling measures. The Division acquired two prime residential sites in Shanghai and Wuxi in. In Vietnam, Phase 2 of Saigon Centre in Ho Chi Minh City has commenced construction. When fully completed in 2015, this 45-storey mixed-use development will include 90,000 sm of retail and commercial space as well as serviced apartments. The Division will continue to seek good sites for residential, commercial, township and mixed-use developments in Singapore and overseas. New projects and new phases of existing developments will be selectively launched in accordance with market demand. There remains volatility in the global markets from the continued uncertainty over the Eurozone sovereign debt situation and slowdown in the growth of the Chinese economy. Amidst this environment, the Group will continue to fortify our collective strengths and capabilities among the Divisions, and enhance sustainable growth in our various businesses. Keppel Corporation Limited, Page 17 of 22

22 13. DIVIDEND 13a. Current Financial Period Reported On Any dividend recommended for the current financial year reported on? Yes The Directors are pleased to recommend a final dividend of 26.0 cents per share tax exempt onetier (: 23.7 cents per share tax exempt one-tier, adjusted for the bonus issue) in respect of the financial year ended 31 December for approval by shareholders at the next Annual General Meeting to be convened. Together with the interim dividend of 17.0 cents per share tax exempt one-tier (: 14.5 cents per share tax exempt one-tier, adjusted for the bonus issue), total dividends paid and proposed in respect of the financial year ended 31 December will be 43.0 cents per share (: 38.2 cents per share tax-exempt one-tier, adjusted for the bonus issue). Name of Dividend Dividend type Dividend per share Tax rate Final Cash 26.0 cents Tax exempt 13b. Corresponding Period of the Immediately Preceding Financial Year Any dividend declared for the corresponding period of the immediately preceding financial year? Yes Name of Dividend Dividend type Dividend per share Tax rate Final Cash 23.7 cents Tax exempt 13c. Date Payable The proposed final dividend, if approved at the Annual General Meeting to be held on 20 April 2012, will be paid on 9 May d. Books Closure Date Notice is hereby given that, the Share Transfer Books and Register of Members of the Company will be closed on 28 April 2012 for the preparation of dividend warrants. Duly completed transfers in respect of ordinary shares in the capital of the Company ( Shares ) received by the Company s Registrar, B.A.C.S. Private Limited, at 63 Cantonment Road, Singapore up to 5.00 p.m. on 27 April 2012 will be registered to determine shareholders entitlement to the proposed final dividend. Shareholders whose securities accounts with The Central Depository (Pte) Limited (CDP) are credited with Shares at 5.00 p.m. on 27 April 2012 will be entitled to the proposed final dividend. 13e. Total Annual Dividend Total distribution paid and proposed in respect of the financial year ended 31 December will be 43.0 cents per share (: 38.2 cents per share). +/- % Interim dividend 302, , Final dividend 463,766* 420, Total annual dividend 766, , * Estimated based on share capital of 1,783,716,751 ordinary shares at the end of the financial year. Keppel Corporation Limited, Page 18 of 22

23 14. SEGMENT ANALYSIS Offshore & Marine Infrastructure Property Investments Elimination Total Revenue External sales 5,705,966 2,862,389 1,467,043 47,069-10,082,467 Inter-segment sales - 107,829 2,342 66,589 (176,760) - Total 5,705,966 2,970,218 1,469, ,658 (176,760) 10,082,467 Segment Results Operating profit 1,317, , ,565 16,420 3,186 1,897,307 Investment income 3,046-19,300 2,243-24,589 Interest income 59,022 3,184 53,585 87,769 (89,578) 113,982 Interest expenses (7,504) (18,343) (79,452) (79,323) 86,392 (98,230) Share of results of associated companies 44,266 32, ,391 31, ,772 Profit before tax & exceptional items 1,416, , ,389 58,563-2,177,420 Exceptional items (45,223) (84,475) 1,292,622 (27,642) - 1,135,282 Profit before tax 1,371,366 35,404 1,875,011 30,921-3,312,702 Taxation (309,521) (24,092) (300,538) (6,355) - (640,506) Profit for the year 1,061,845 11,312 1,574,473 24,566-2,672,196 Attributable to: Shareholders of Company Profit before exceptional items 1,064,243 82, ,647 44,883-1,491,214 Exceptional items (44,994) (90,524) 512,452 (27,636) - 349,298 1,019,249 (8,083) 812,099 17,247-1,840,512 Non-controlling interests 42,596 19, ,374 7, ,684 1,061,845 11,312 1,574,473 24,566-2,672,196 Other information Segment assets 6,734,279 3,354,860 16,275,376 5,266,419 (7,148,364) 24,482,570 Segment liabilities 4,916,110 2,512,787 9,562,374 3,448,607 (7,148,364) 13,291,514 Net assets 1,818, ,073 6,713,002 1,817,812-11,191,056 Investment in associated companies 386, ,592 3,108, ,230-4,232,047 Additions to non-current assets 349, , ,706 19,980-1,593,162 Depreciation and amortisation 141,360 52,652 14, ,571 GEOGRAPHICAL SEGMENT Singapore Far East & Other ASEAN Countries America $ 000 Other Countries Elimination Total External sales 7,555, , , ,641-10,082,467 Non-current assets 9,328,697 1,615, , ,243-11,864,174 Keppel Corporation Limited, Page 19 of 22