TThe he EEnterprisenterprise IInstinctnstinct

SuccessfulSuccessful organisations strive to keep alive the enterprise organisations strive to keep alive the enterprise spirit among its people – the one single force that propels an spirit among its people – the one single force that propels an organisation forward, keeps its innovative edge and inspires organisation forward, keeps its innovative edge and inspires work with passion.work with passion.

Singapore Technologies Engineering (ST Engineering) is one Singapore Technologies Engineering (ST Engineering) is one such organisation.such organisation.

An integrated engineering group providing solutions and An integrated engineering group providing solutions and services in the aerospace, electronics, land systems and marine services in the aerospace, electronics, land systems and marine sectors, it is spreading its wings to become a global entity. sectors, it is spreading its wings to become a global entity. Today, it has over 100 subsidiaries and associated companies Today, it has over 100 subsidiaries and associated companies in 15 countries and 22 cities, a global staff strength of some in 15 countries and 22 cities, a global staff strength of some 12,000, and 2004 revenues of nearly $3b. 12,000, and 2004 revenues of nearly $3b.

ST Engineering is also a company undergoing change. Since ST Engineering is also a company undergoing change. Since its inception, most of its revenues were from the defence sector. its inception, most of its revenues were from the defence sector. In 2004, for the fi rst time, this was surpassed by commercial In 2004, for the fi rst time, this was surpassed by commercial contributions. Other opportunities beckon. With solutions as contributions. Other opportunities beckon. With solutions as diverse as unmanned technologies and satellite communications, diverse as unmanned technologies and satellite communications, it now serves customers in over 60 countries worldwide.it now serves customers in over 60 countries worldwide.

This Annual Report chronicles ST Engineering’s continuing This Annual Report chronicles ST Engineering’s continuing journey to nurture the enterprise spirit.journey to nurture the enterprise spirit.

SINGAPORE TECHNOLOGIES ENGINEERING LTD

51 Cuppage Road #09-08, StarHub Centre, Singapore 229469 Tel: (65) 6722 1818 Fax: (65) 6720 2293

(Regn. No.: 199706274H)

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The The EnterpriseEnterpriseInstinctInstinct

Singapore Technologies Engineering Ltd Annual Report 2004(Regn. No.: 199706274H)

01 01 The Enterprise Instinct The Enterprise Instinct 0202 – Scaling New Heights 0404 – Anticipating Change 0606 – Driven by Innovation 0808 – Growing through Teamwork 10 10 ST Engineering at a Glance ST Engineering at a Glance 12 12 Letter to Shareholders Letter to Shareholders 18 18 Financial Highlights Financial Highlights 24 24 Corporate Governance Corporate Governance 32 32 Board of Directors Board of Directors 38 38 Senior ManagementSenior Management 42 42 Organisation Chart Organisation Chart 44 44 Extending Our Horizons Extending Our Horizons 4646 – Aerospace 5050 – Electronics 5454 – Land Systems 5858 – Marine 62 62 Human Resource Human Resource 64 64 Corporate Social Responsibility Corporate Social Responsibility 66 66 Investor RelationsInvestor Relations6767 � Dividend History6868 � Investor Relations Calendar 20046868 � Financial Calendar 20056969 � Share Price Performance70 70 Awards and Commendations Awards and Commendations 72 72 Asian Aerospace 2004Asian Aerospace 200474 74 Operating Financial ReviewOperating Financial Review7474 – Group’s Vision, Mission & Strategies 7575 – Sector Overview8080 – Operating Review Half Yearly Performance Full Year Performance Earnings Per Share (EPS) Economic Value Added (EVA) Capital Expenditure Total Assets Major Acquisitions Major Projects

86 – Dynamics and Risk Factors of the Business

Review of Business Environment Risk Management Sensitivity Analysis91 – Prospects for 20059292 – Shareholder Returns Return On Equity Dividend Per Share (DPS) and

Earnings Per Share (EPS) Share Purchase Mandate9292 – Financial Review Treasury Policy and Capital Structure Cash and Foreign Exchange Management Insurance Funding and Borrowings Cash Flows and Liquidity9494 – Accounting Policies95 95 Financial ReportFinancial Report9696 – Directors’ Report111111 – Statement by Directors112112 – Auditors’ Report113113 – Financial Statements Balance Sheets Statement of Profi t and Loss Statements of Changes in Equity Consolidated Statement

of Cash Flows Notes to the Financial Statements181877 – SGX Listing Manual Requirements190190 � Shareholding Statistics192192 – Sectoral Financial Review212212 – Group Structure217217 Corporate InformationCorporate Information218218 Corporate DirectoryCorporate Directory231231 Notice ofNotice of Annual General MeetingAnnual General Meeting Proxy FormProxy Form Annual Report Annual Report SurveySurvey

Contents

The Enterprise Instinct1

The Enterprise Instinct is boldness of vision pursued with determination and focus. It anticipates new trends in business and in the operating environment, and responds with creative solutions. It is proactive, welcoming challenges as growth opportunities.

ST Engineering nurtures the enterprise instinct to become a truly global defence and engineering group. In a volatile and fast changing marketplace, a mindset that embraces change and innovates constantly will be the key differentiator.

Haliaeetus leucocephalus – BALD EAGLEThe bald eagle – king of birds – is a popular symbol of vision and focus, epitomising leadership, strength and decisiveness. This majestic bird displays strong nesting instincts, with both parents raising their young together.

Capra ibex – IBEXThe sure footed ibex inhabits some of the most inhospitable landscapes – craggy cliffs and rocky outcrops. Tenacious and resilient in the face of obstacles, it nimbly overcomes all odds in its quest for the summit.


Scaling New Heights. Vision sets clear goals. Vision drives the enterprise instinct and rises above the mundane to deliver the extraordinary. It is an innate restlessness that constantly searches for the better, faster, more powerful. It is a spirit that yearns instinctively for excellence, climbing ever higher with a dogged determination to reach the summit.

26.4%return on equity for 2004

$6.74b market capitalisation at end December 2004

5.7%dividend yield for 2004

Chen caerulescens – SNOW GEESESnow geese anticipate changes in climate and migrate seasonally to warmer areas for survival. Guided by an exceptional sense of direction and determination, they fl y tirelessly towards their destination.


Anticipating Change. Anticipation is the enterprise instinct in action. Not waiting for change to happen, the enterprise instinct initiates change to stay ahead of the marketplace. ST Engineering believes that, rather than submit passively to the vortex of swirling market forces, it should take charge of its destiny and adapt intuitively to better serve its customers.

over 100 subsidiaries and associated companies

customers in over 60 countries

operations in 22cities

Atta cephalotes – LEAF CUTTING ANTSThese industrious and innovative leaf cutting ants are social insects with a strong sense of devotion to the colony. Instead of merely foraging, they cleverly manipulate their environment to ensure that there is a constant supply of food.


Driven By Innovation. The enterprise instinct has a passion to innovate ahead of market needs. The competitive marketplace and the lightning pace of technological change challenge organisations to continually reinvent themselves. ST Engineering has a dedicated task force constantly looking out for emerging and disruptive technologies to create more value for its customers and set new paradigms in the industry.

52patents granted

191patents fi led

Suricata suricatta – MEERKATSGregarious meerkats exhibit a distinct spirit of allegiance. Sentries stand guard while their comrades look for food and sound the alert when there is any threat. The entire team will share the responsibility of bringing food back to the caregivers and pups.


Growing Through Teamwork. The enterprise instinct thrives on a foundation of teamwork. It knows that an organisation is its people and that the sum is larger than its parts. The enterprise instinct nurtures talent and develops a focussed and committed workforce to propel the organisation forward.

As members of an evolving global entity, ST Engineering staff, spread over several continents, work as one united family. Doing the best for customers, and for the community.

12,000staff worldwide

over11nationalities

484

387

70

35

Revenue

$ m

Profit beforetax

591

717

73

96

Revenue

$ m

Profit beforetax

626

614

66

61

$ m

Revenue

Profit beforetax

1,118

1,092

237

225

Revenue

Profit beforetax

$ m

2,948

2,819

450

413

Revenue

$ m

Profit beforetax

FY2004 FY2003

Singapore Technologies

Engineering LtdAR 2004 10

MARINE SECTOR

• Project Management - Turnkey shipbuilding programme - Ship upgrading and conversion - Weapon system integration and

installation

• Inhouse Design Expertise - Custom design naval and

commercial vessels - Light weight ship design

LAND SYSTEMS SECTOR

• Total System Design, Development, Integration and Production

- Multi role military land systems - Advanced munitions - Homeland security, commercial

specialty vehicles - System modifi cation, upgrades and

technology insertion

ELECTRONICS SECTOR

• Large-Scale Systems Group - Intelligent transportation systems - Intelligent building management

systems - Combat systems integration - Multi-channel Multipoint

Distribution Systems

AEROSPACE SECTOR

• Aircraft Maintenance and Modifi cation

- Line and base maintenance - Technical services and

maintenance planning - Modifi cations, conversions and

refurbishments

• A global, integrated engineering Group providing advanced solutions and services in the aerospace, electronics, land systems and marine sectors.

ST ENGINEERING Core Capabilities

Core Capabilities

Core Capabilities

Core Capabilities

Core Capabilities

ST Engineering

• Communication and Sensor Systems Group

- Wireless broadband and satellite systems

- Radio communications systems - Information security systems - Electro-Optics systems

• Operations and Support Services for Defence Equipment

- Maintenance of vehicles, weapons and other ground support equipment

- Maintenance engineering and training

- Stealth technology - CAD/CAM facilities

• Shipbuilding Expertise - Extensive waterjets experience - Thin gauge steel and aluminium

construction for naval vessels

• The Group creates value for its customers by combining a strategic understanding of their business with innovative technology and customised solutions. It adds speed and affordability to the mix through dual application technologies that traverse traditional industry lines.

• Component/Engine Repair and Overhaul

- Engine maintenance, repair and overhaul

- Aircraft mechanical and avionics component repair


• Shipyards in Singapore and the US• Track record in the design and construction of sophisticated

naval and commercial vessels• Successfully delivered a variety of vessels including Landing

Ship Tanks, Patrol Vessels, Feeder Container Vessels and RoRo/LoLo Vessels.

• Specialist in complex commercial ship repair services, including ship conversion and jumboisation. Established a strong track record in the repair of dredgers and chemical tankers

• 1,436 staff

• Developed and produced a series of top range products which are in service with the Singapore Army, including the Bionix, Bronco, SAR 21 and Primus

• Recognised internationally for having developed the world’s fi rst mechanical 40mm self destruct fuze; the lightest 40mm automatic grenade launcher; a 120mm mortar system with the lowest recoil and highest sustained rate of fi ring

• STAR Automotive Centre is penetrating the China market, and is the only operator in Singapore with a franchise scheme

• 2,317 staff

• 70% market share in Singapore MRT communications systems• 35% market share in Taiwan MRT communications systems• An international leader in providing satellite systems• Provides satellite tracking systems for one of the largest taxi

fl eets in the world• Co-developer of the award winning Infrared Fever Screening

System during the SARS crisis• 2,635 staff

• One of the world’s largest third party aircraft maintenance providers

• Customer base includes seven of the world’s 11 largest airlines and three major freight forwarders

• Operations in Asia Pacifi c, North America and Europe • 4,874 staff

• Over 100 subsidiaries and associated companies• Global footprint in 15 countries and 22 cities• One of the largest companies listed in Singapore • Solid fi nancial standing with “Aaa” credit ratings from Moody’s• Component stock in the Straits Times Index and Jane’s Defence

Weekly 20 Index of global defence companies• 52 patents held by the Group, with 191 patents fi led• 11,619 global workforce with 3,770 engineering staff

at a GlanceFacts

Facts

Facts

Facts

Facts

• Its capability in integrating air, land and sea resources through electronics lends a compelling value proposition to many of the world’s leading commercial enterprises and defence forces.

• Engineering and Materials Services - Customised aircraft upgrade - Design and development and

technology integration - Materials and spares support and

management

• Software Systems Group - Mobile and real time systems - Training and simulation systems - Large-scale solutions

• Commercial Automotive and Industrial Test Services

- Vehicle maintenance, repair and inspection services

- Industrial laboratory and test services

• Maintenance - Overhaul and maintenance of high

performance marine engines

• Shiprepair - Commercial and naval vessels - Upgrading and retrofi tting - Conversion of commercial vessels



TAN Pheng Hock President and CEO

Peter SEAH Lim Huat Chairman

The Enterprise Instinct

Dear Shareholders

2004 began on a brighter note after the diffi cult year before. Economic signs were positive earlier in the year but

turned softer when oil prices rose, interest rates went up and China took steps to cool its over heating economy.

Despite improved traffi c and load factors, major US airlines continued to report large losses. Consequently, the

Group’s expectations for aerospace revenue growth in the US did not materialise as a key customer deferred major

maintenance work in the third quarter. However, with increased cost pressures, US legacy carriers are seeking ways

to lower their costs and this potentially means more outsourcing opportunities for independent MRO providers

– opportunities which the Aerospace sector is well poised to capture. This sector also did well in its Singapore

operations, keeping the three facilities at full utilisation throughout the year. In Asia, the growth of low cost

carriers provided a boost to the air travel industry and offered fresh opportunities for future revenue growth

in aerospace.

Strong production activities in the Singapore yards and increased shipbuilding in the US at VT Halter Marine

contributed to the excellent performance in the Marine sector. The Electronics sector performed in line with

expectations, winning several new contracts, while the Land Systems sector showed better than expected results

through increased cost control measures.

The Group reviewed its management structure and formed the Executive Offi ce in May. This new offi ce, comprising

the CEO, two new Deputy CEOs and the CFO, will strengthen the execution of the Group’s globalisation strategy.

It will also enable an enhanced focus on customers and a better integration of capabilities to push for growth.

Letter To Shareholders

“ The Group’s net profi t increased by 10% to $358.4m in 2004. Turnover and PBT grew 5% and 9% to $2.95b and $450.4m respectively. PBT margins for the Group remained at healthy levels throughout the year. ROE for the Group was a strong 26.4%, compared to 2003 ROE of 24.6%. The Board is recommending a total gross dividend of 123.9% (12.39 cents per share), comprising an ordinary tax exempt (1-tier) dividend of 40% and a special tax exempt (1-tier) dividend of 83.9%.”

13

FINANCIAL PERFORMANCEAfter fl at earnings performance for two years, the Group turned in a credible 10% net profi t growth this year.

The Group’s 2004 turnover and PBT grew 5% and 9% to $2.95b and $450.4m respectively. Net profi t increased

by 10% to $358.4m. PBT margins for the Group remained at healthy levels throughout the year. Cash at the

operating level of $174.4m was lower than that of 2003 by $36.3m, due mainly to increased working capital

requirements. We ended the year with a market capitalisation of $6.74b, compared to $5.89b the year before.

ROE for the Group was a strong 26.4%, compared to 2003 ROE of 24.6%. EVA at $238.7m was marginally lower

than in 2003, largely due to a higher weighted average cost of capital, from 6.5% in 2003 to 7.4% in 2004.

SHAREHOLDER RETURNS AND DIVIDENDSThe Board is recommending a total gross dividend of 123.9% (12.39 cents per share), comprising an ordinary

tax exempt (1-tier) dividend of 40% and a special tax exempt (1-tier) dividend of 83.9%. This represents 100%

payout of net profi t and a dividend yield of 5.7% , in line with our intention of maximising shareholder returns

through growth and a consistent dividend policy.

WINNING NEW CUSTOMERSOur commercial pie continued to expand relative to our defence revenue, ending the year at 51% of total Group

revenue (45% in 2003). During the year, all sectors successfully clinched contracts from new and existing

customers. Notable new businesses included:

• In the Aerospace sector, a US$438m ($728m) contract from United Parcel Service; contracts totalling US$100.5m

($170m) from AirAsia and JetStar Asia; and a contract from the Philippines Air Force, to supply 20 refurbished

UH-1H helicopters with an integrated logistics package, worth US$12m ($20m).

• In the Electronics sector, a $163m automotive telematics contract in Thailand; a $61.4m contract for Taipei’s

subway system; a further $11m order for cable TV receivers in Mexico bringing the total to $55m todate; and a

RMB71.2m ($15m) contract from Guang Zhou Metro Corporation.

• VT Miltope, our US electronics subsidiary acquired in December 2003, won a second contract for rugged

notebooks worth about US$200m ($328m) from the US Army. It is also supplying wireless internet cabin access

points to Boeing planes under the Connexion by BoeingTM programme.

• A feasibility study contract for the development of a Future All Terrain Vehicle for the Finnish Defence Forces was

awarded to the Land Systems sector.





• In the Marine sector, a $20m Kuwaiti contract to build a Landing Supply Craft; a contract for US$85m ($146m)

from Crowley Maritime for two articulated tug barge units; a US$18m ($31m) contract from Lockheed Martin for

two harbour tugs; a US$5.2m ($9m) contract to build a stevedoring crane barge for Tide Leasing Company and a

US$31m ($51m) contract for a Nantucket Steamship Authority ferry. VT Halter Marine has been named a prime

contractor for a possible substantial contract from the US government to build three fast missile craft for Egypt.

There is no contract awarded as yet for this project.

EXPANDING OPERATIONSThe Group continued to expand overseas this year especially in the key growth markets of the US and China.

In the fourth quarter, the Aerospace sector launched STARCO, its MRO Joint Venture (JV) facility with China Eastern

Airlines in Shanghai. During the year, the Aerospace sector also added three new hangars: one in Singapore and

two in Mobile, Alabama.

The Electronics sector set up offi ces in Guangzhou and Shenzhen, China, and a training instrumentation systems

company in Singapore. It also took a 21% stake in Singapore listed ECS Holdings to tap its IT infrastructure and

enterprise systems expertise, as well as its regional network of over 1,000 resellers.

BZK, a JV of the Land Systems sector and Beijing Heavy Duty Truck Plant, started producing dump trucks for

the Chinese construction market in March. The sector also signed two JV agreements to set up automotive

repair centres serving three Chinese provinces and an MOU with Lockheed Martin to collaborate on manned and

unmanned ground systems.

At the Group level, offi ces were set up in India and Kazakhstan to address the emerging markets there. A JV

agreement was signed with Kazakhstan Engineering, the government’s engineering agency, to collaborate and tap

the potential of Central Asia.

“Our commercial pie continued to expand relative to our defence revenue, ending the year at 51% of total Group revenue (45% in 2003). During the year, all sectors successfully clinched contracts from new and existing customers.”

15

MANAGING RISKAs we expand globally, we will be exposed to increased operational and fi nancial risk. An example was Hurricane

Ivan, which narrowly missed three of our US facilities when it swept through the Gulf Coast in September. This

underlines the importance of continual improvements to the enterprise-wide risk management system. In this

regard, the Group has engaged the services of a risk consultancy fi rm to improve its risk management processes.

INNOVATING TO CREATE VALUEWe continued our R&D efforts in dual purpose technologies for both defence and commercial applications. During

the year, the Group fi led 14 and was granted nine patents. This brought the total number of patents held by the

Group to 52, with 191 fi led.

The Group showcased new and transformational products and capabilities at Asian Aerospace 2004 in February.

These included the Maritime, Aviation and Port Security (MAPS) solution, the Active Articulation Vehicle concept,

the Spider Light Strike Vehicle and Unmanned Aerial Vehicles. The Group continued to expand its range of

products and solutions to address the needs for homeland defence and security. The additions included the

Automatic Detection Infrared System, the Perimeter Surveillance System and a real time Mobile Track and

Trace system.

WINNING AWARDS AND CORPORATE RESPONSIBILITYWe believe in being a responsible corporate citizen. In 2004, we joined the Centre for Corporate Social

Responsibility in Singapore. This is in line with our broader philanthropic activities, such as fund raising

for charities and sponsorship of the arts. The Group is contemplating a community-wide workplace safety

outreach programme.

A key fund raising activity was the President’s Challenge 2004, where more than 3,000 staff participated in a

charity walk-a-jog on 7 August to raise $500,000.

Our Electronics sector’s thermal scanner innovation was further recognised by jointly winning an award from the

US Tech Museum in California.

In November, the Group received the inaugural UK Trade & Investment International Business Award for its

investments in the UK. The award was presented by HRH Duke of York, Prince Andrew.

LOOKING AHEAD TO 2005In 2005, we will intensify our efforts to further grow our overseas businesses. Investments in the US in recent

years, namely San Antonio Aerospace, VT Halter Marine and VT Miltope, have achieved sustained revenue growth

and are expected to contribute to profi ts next year. The more recent investments, STARCO and BZK, will be primed

to add to our mid term growth, along with future acquisitions and investments being considered.





We expect our Aerospace, Electronics and Marine sectors to continue to show revenue growth in 2005. The Land

Systems sector, which contracted in 2004 but remained profi table, will continue to nurture recent initiatives such as

BZK, its heavy vehicle business in China, and to focus on new growth opportunities.

The Group is building new capabilities and technologies to address the changing needs of defence customers

in advanced countries, while at the same time applying its existing capabilities to meet the needs of developing

countries. The latter goes beyond selling systems and products. It entails areas like technology transfer,

licensing, subcontracting roles, as well as providing maintenance related services to further penetrate existing

and new markets.

EXPRESSING APPRECIATIONWe would like to express our heartfelt thanks to Mr Tan Guong Ching, who has stepped down from the

ST Engineering Board and has been appointed Chairman of ST Aerospace. He has been an invaluable source of

guidance and direction to the Group. We would also like to express our deep appreciation to Mr Lim Chin Beng

who has stepped down after serving six years as Chairman of ST Aerospace. Through his vision, our Aerospace

sector has grown to become an international MRO brand name and network.

All our stakeholders played a critical role in helping us achieve our successes in 2004 and in building for the

future. To all, we say a big thank you: to our shareholders for their important support; to our customers for

continuing to entrust us with their important projects; and last but not least, our appreciation to our employees

for their passion in going the extra mile for customers. They truly embody ST Engineering’s enterprise spirit.

Peter SEAH Lim HuatChairman

28 January 2005

TAN Pheng HockPresident and CEO

17

Financial Highlights

In 2004, ST Engineering reported 9% higher profi t before tax of $450.4m and 10% increase in profi t after tax of $358.4m. Economic Value Added was $238.7m, comparable to that of the previous year. Commercial sales represented 51% of the Group’s business. International contributions grew in 2004, with 33% of the Group’s turnover from outside Asia. The Board of Directors is proposing a fi nal dividend of 12.39 cents per share, which represents 100% of 2004 earnings, giving a dividend yield of 5.7%.

20042003200220012000

Aerospace

$ m

Electronics Land Systems Marine Others

Turnover By Sector

0

500

1,000

1,500

2,000

2,500

3,000$ m

Profit Before Tax By Sector

0

50

100

150

200

250

300

350

400

450

500

20042003200220012000

$ m

Profit After Tax By Sector(before extraordinary items)

0

50

100

150

200

250

300

350

400

20042003200220012000




Key Financial Data

19The Enterprise Instinct

$ m 2004 2003 2002 2001 2000

Turnover by sector 2,948 100% 2,819 100% 2,619 100% 2,470 100% 2,259 100%

Aerospace 1,118 38% 1,092 39% 1,043 40% 1,031 42% 956 42%

Electronics 626 21% 614 22% 571 22% 489 20% 412 18%

Land Systems 591 20% 717 25% 710 27% 603 24% 527 23%

Marine 484 16% 387 14% 280 11% 335 13% 358 16%

Others 129 5% 9 – 15 – 12 1% 6 1%

Profi t before tax by sector 450.4 100% 412.7 100% 413.0 100% 440.2 100% 412.5 100%

Aerospace 236.6 52% 225.2 55% 213.0 52% 225.7 51% 219.0 53%

Electronics 65.7 15% 61.4 15% 56.7 14% 52.1 12% 46.6 11%

Land Systems 72.6 16% 96.4 23% 96.9 23% 97.2 22% 84.7 21%

Marine 70.1 16% 35.2 9% 41.1 10% 62.6 14% 63.9 15%

Others 5.4 1% (5.5) (2%) 5.3 1% 2.6 1% (1.7) –

Profi t after tax by sector (before extraordinary items) 358.4 100% 325.6 100% 330.7 100% 342.3 100% 288.1 100%

Aerospace 188.4 53% 176.3 54% 155.6 47% 160.3 47% 151.0 52%

Electronics 52.8 15% 48.0 15% 42.8 13% 34.5 10% 30.6 11%

Land Systems 59.1 16% 76.5 24% 100.6 30% 100.3 29% 64.9 23%

Marine 54.0 15% 30.8 9% 29.2 9% 45.7 13% 43.8 15%

Others 4.1 1% (6.0) (2%) 2.5 1% 1.5 1% (2.2) (1%)

cents

Net Tangible Assets Per Share

20042003200220012000

0

5

10

15

20

25

30

35

40

45

50%

Return On Equity

20042003200220012000

0

5

10

15

20

25

30$ m

Shareholders’ Funds

20042003200220012000

0

150

300

450

600

750

900

1,050

1,200

1,350

1,500



Key Financial Data

2004 2003 2002 2001 2000

Shareholders’ funds ($ m) 1,358 1,324 1,452 1,371 1,125

Total assets ($ m) 4,058 4,122 4,351 4,578 4,383

Net tangible assets ($ m) 1,296 1,266 1,431 1,370 1,125

Gross dividend per share (cents) 12.39 11.3 18.50 10.80 9.50

Dividend yield (%) 5.67 6.12 9.25 4.20 3.53

Dividend cover 1.00 1.00 0.74 1.38 1.33

Earnings per share (cents) 12.40 11.29 11.47 11.92 10.12

Return on turnover (%) 12.3 11.6 12.7 14.0 12.9

Return on equity (%) 26.4 24.6 22.8 25.0 25.6

Return on total assets (%) 9.0 7.9 7.7 7.6 6.6

Net tangible assets per share (cents) 44.8 43.9 49.6 47.6 39.4


$ '000

Value Added Per Employee

20042003200220012000

0

20

40

60

80

100

120$ '000

Economic Value Added Per Employee

20042003200220012000

0

2

4

6

8

10

12

14

16

18

20

22$ '000

Profit After Tax Per Employee

20042003200220012000

0

5

10

15

20

25

30

35

21

Productivity Data

2004 2003 2002 2001 2000

Average staff strength 11,684 11,702 11,413 10,780 10,128

Sales per employee ($) 252,333 240,898 229,492 229,134 223,048

Profi t after tax per employee ($) 30,674 27,823 28,977 31,749 28,450

Employment costs ($ m) 822.7 798.0 759.1 742.0 658.5

Employment costs per $ of turnover ($) 0.28 0.28 0.29 0.30 0.29

Economic Value Added ($ m) 238.7 240.9 190.2 159.5 189.3

Economic Value Added spread (%) 13.9 13.9 11.3 10.1 13.3

Economic Value Added per employee ($) 20,435 20,587 16,664 14,792 18,696

Value added ($ m) 1,363.1 1,337.0 1,274.2 1,254.5 1,155.8

Value added per employee ($) 116,668 114,253 111,646 116,373 114,124

Value added per $ of employment costs ($) 1.66 1.68 1.68 1.69 1.76

Value added per $ of gross fi xed assets ($) 1.03 1.05 1.03 1.14 1.12

Value added per $ of turnover ($) 0.46 0.47 0.49 0.51 0.51

$ m

EVA Attributable To Ordinary Shareholders

20042003200220012000

0

50

100

150

200

250



Economic Value Added Statement

($ m) 2004 2003 2002 2001 2000

Net profi t before tax 392.0 367.4 370.7 404.3 369.4 Adjust for: Share of associated companies’ profi ts 58.4 45.3 42.3 35.8 43.1 Interest expense 6.7 3.7 5.0 5.5 12.7 Others (3.5) 18.4 5.3 (43.3) 34.6

Adjusted profi t before interest and tax 453.6 434.8 423.3 402.3 459.8 Cash operating taxes (Note 1) (85.7) (84.7) (76.3) (92.9) (130.3)

Net operating profi t after tax (NOPAT) – (a) 367.9 350.1 347.0 309.4 329.5

Average capital employed (Note 2) 1,724.8 1,712.1 1,685.8 1,571.7 1,422.2 Weighted average cost of capital (Note 3) (%) 7.4 6.5 9.3 9.4 9.9

Capital charge – (b) (127.6) (111.3) (156.8) (147.7) (140.2)

Group Economic Value Added (EVA) – [(a) – (b)] 240.3 238.8 190.2 161.7 189.3

Minority share of EVA (1.6) 2.1 – (2.2)

Group EVA attributable to ordinary shareholders 238.7 240.9 190.2 159.5

Unusual items (UI) losses/(gains) (Note 4) 6.1 0.7 7.9 (1.6) Group EVA attributable to shareholders (exclude UI) 244.8 241.6 198.1 157.9

Note 1: The reported current tax is adjusted for the statutory tax impact of interest expense.Note 2: Monthly average share capital plus interest bearing liabilities, timing provision,

goodwill amortised, and present value of operating leases.

Major Capital Components: $ m Long term debt 163.1 Short term debt 27.7 Equity 1,283.5 Others 250.5

1,724.8 Note 3: The weighted average cost of capital is calculated in accordance to Singapore

Technologies (ST) Group EVA Policy as follows: i) Cost of Equity using Capital Asset Pricing Model with market risk premium at

6.0% (2003 @ 6.0%); ii) Risk-free rate of 3.78% (2003 @ 2.78%) based on yield-to-maturity of

Singapore Government 10 years Bonds; iii) Ungeared beta at 0.7 (2003 @ 0.7) based on ST risk categorisation; and iv) Cost of Debt rate at 3.70% (2003 @ 2.68%) using 5 year Singapore Dollar

Swap Offered rate plus 75 basis point.

Note 4: Unusual Items (UI) refer to divestment of investment properties, subsidiary and associates, long term investments and disposal of major fi xed assets.


$ m

Total Value Added

20042003200220012000

0

300

600

900

1,200

1,500

23

Value Added Statement

($ m) 2004 2003 2002 2001 2000 Value added from: Revenue earned 2,948.1 2,819.0 2,619.2 2,470.1 2,259.0 Bought in materials and services (1,698.6) (1,578.5) (1,452.1) (1,360.8) (1,243.5)

Gross value added 1,249.5 1,240.5 1,167.1 1,109.3 1,015.5 Income from investments and interest 36.2 32.1 49.6 93.9 85.3 Exchange gain/(loss) (2.1) (1.2) (4.2) 9.4 0.2 Other non-operating income 21.1 20.3 19.4 6.1 11.7 Share of results of associated companies and joint ventures 58.4 47.3 43.8 35.8 43.1 Amortisation of goodwill on acquisition of associated companies – (2.0) (1.5) – –

Total value added 1,363.1 1,337.0 1,274.2 1,254.5 1,155.8 Distribution of value added To employees in wages, salaries and benefi ts 822.0 797.4 758.5 741.3 658.8 To government in income and other taxes 93.8 93.1 83.8 90.6 125.5 To providers of capital on: • Interest paid on borrowings 4.2 2.2 2.9 3.2 4.0 • Dividends to shareholders 326.5 449.9 247.8 – 213.0

1,246.5 1,342.6 1,093.0 835.1 1,001.3 Balance retained in/(applied from) business Depreciation 77.7 86.4 78.6 74.9 76.1 Impairment of assets 1.0 1.1 1.9 2.1 – Retained profi ts 3.6 (149.7) 44.2 251.2 (7.1)

82.3 (62.2) 124.7 328.2 69.0 Non-production cost and income Bad debts 0.2 25.7 11.1 (12.1) – Income from investments and interest 36.2 32.1 49.6 93.9 85.3 Exchange gain/(loss) (2.1) (1.2) (4.2) 9.4 0.2

34.3 56.6 56.5 91.2 85.5 Total distribution 1,363.1 1,337.0 1,274.2 1,254.5 1,155.8

Corporate Governance



The Corporate Governance Report below describes

ST Engineering’s corporate governance processes

and activities in 2004 with specifi c references to

the Principles of the Singapore Corporate

Governance Code.

Board’s Conduct of its Affairs and Independence of the Board (Principles 1, 2 and 3)The Board’s key responsibilities include providing

leadership and guidance to management on

corporate strategy, business directions, acquisitions

and divestments, risk policy and implementation of

corporate objectives. The Board is aided in its tasks

by Board Committees which have been established to

focus on the key areas of oversight.

The Board comprises 11 directors and an alternate

director.

The Chairman is Mr Peter Seah, a non executive director

independent of management. He was the President

and CEO of parent company Singapore Technologies

Pte Ltd (STPL) until it restructured and ceased

operations on 31 December 2004.

As a non executive director, Mr Seah is free from

any relationship with the executive management of

the Company that could materially interfere with the

exercise of his independent judgment. However, in

the context of Guidance Note 2.1 of the Corporate

Governance Code, Mr Seah will not be regarded as

an independent director for the time being as he is “a

director being employed by the company or any of its

related companies for the current or any of the past

three fi nancial years”.

The President and CEO is Mr Tan Pheng Hock, who is

an executive director.

Ten of our directors are non executive of whom the

Board has determined that fi ve are independent

directors. These independent directors are Mr Koh

Beng Seng, Mr Venkatachalam Krishnakumar, Dr Philip

Pillai, Mr Winston Tan and Mr Lucien Wong.

The Company’s independent and non executive

directors’ contributions to Board deliberations have

been objective and useful. An independent minded

director can constructively challenge and guide

management without being adversarial in approach.

The Board offers alternative viewpoints in a positive

manner, working with management to achieve success

for the Company.

The Company’s corporate governance framework refl ects the commitment of its Board and management to build a trusted and respected organisation supported by a sound system of practices and processes that regulates the conduct of Board affairs, the Board’s accountability to shareholders and management’s accountability to the Board.


During the year, Mr Tan Guong Ching, an independent

director, retired at the Company’s Annual General

Meeting (AGM) upon the expiry of his term of

offi ce and did not stand for re-election. Mr Tan was

Chairman of the Business Investment and Divestment

Committee and a member of the Executive Resource

and Compensation Committee (ERCC). He had served

on the Board since its inception in 1997 and the

Board and management are deeply appreciative of

his unstinting support and contributions. Mr Tan’s

association with the company began in April 1992

when he was appointed to the Board of Singapore

Technologies Marine, a subsidiary of ST Engineering.

Mr Lim Chin Beng succeeded Mr Tan as Chairman

(co-opted) of the Business Investment and Divestment

Committee on 15 July 2004.

The Board held a total of four meetings during the

year, two of which, in accordance with its planning

cycle, were for the approval of the FY2003 results

and release of half year results. Two special Board

meetings were held to specifi cally consider the business

growth strategies of the Group.

Board Committees (Principles 4, 7 and 11)Supporting the Board are the following Board

Committees:

• Audit Committee

• Business Investment and Divestment Committee

• Executive Resource and Compensation Committee

• Nominating Committee

• Budget and Finance Committee

• Research, Development and Technology Committee

• Senior Human Resource Committee

• Risk Review Committee

• Tenders Committee

The composition of the Board Committees is found on

page 31.

Board Selection, Training and Evaluation of Performance (Principles 4 and 5)The Nominating Committee is responsible for

identifying and selecting new directors and the re-

election of directors due for retirement by rotation at

the AGM. Its members are Mr Peter Seah (Chairman),

Dr Philip Pillai and Mr Venkatachalam Krishnakumar.

The Nominating Committee has the same members

as the ERCC. This is because both committees share

similar objectives of searching for talent and expertise

to enrich the Board and to strengthen management.

During the year, four Nominating Committee

meetings were held to approve the format of an

annual independent questionnaire for independent

directors, adopt a Directorship Review Policy and

review the membership of the Board and Board

Committees in the Company and its key subsidiaries.

The Committee decided not to fi x a term of offi ce for

directors. Instead, it provided for a regular review

of the Board composition to ensure that suitable

directors are appointed to address the relevant industry

and business needs of the Company and its key

subsidiaries. The Committee determined that the Board

is of an appropriate size to meet the objective of

bringing a balance of skills and experience to bear on

the deliberations of the various Board Committees. An

expertise considered useful as a criterion for selection

to the Board was “knowledge of security” in the

context of the nature of the Group’s business.

Informal reviews of directors of the Board are

undertaken by the Nominating Committee when a

director is due for retirement and re-election.

At each AGM, one third of the directors with the

longest term in offi ce is required to retire and submit

for re-election. Mr Venkatachalam Krishnakumar,

Dr Philip Pillai, Mr Lucien Wong and Mr Tan Pheng

Hock will retire and submit themselves for re-election

at the Company’s forthcoming AGM under Article 98 of

its Articles of Association.




ST Engineering subscribes to the principle that all

directors including the President and CEO should

retire and submit themselves for re-election at regular

intervals and at least once every three years. This is

one of the principles in the Corporate Governance

Code (Guidance Note 4.2). ST Engineering is an early

adopter of this principle. It amended its Articles of

Association in 2002 to require all directors, including

the CEO of the Company, to retire by rotation. Mr Tan

Pheng Hock is now due for retirement and is submitting

himself for re-election.

On appointment, new directors are given a briefi ng

by the President and CEO on the strategies of the

Company and its key subsidiaries. From time to

time, seminars on updates to the relevant laws and

corporate governance are organised for the benefi t of

the directors and management. The Board consists

of members with backgrounds in fi nance, banking,

technology, legal and management skills. Each director

brings to the Board an independent and objective

perspective to enable balanced and well considered

decisions to be made.

Access to Information (Principle 6) In accordance with this principle, the Board receives

monthly reports providing updates on key operational

activities and fi nancial analysis. The Board also has

unrestricted access to the President and CEO, the

Chief Financial Offi cer, management and the Company

Secretary as well as the internal and external auditors.

The Board can also seek independent professional

advice if deemed necessary.

Procedures for Developing Remuneration PoliciesLevel and Mix of RemunerationDisclosure on Remuneration (Principles 7, 8 and 9) The ERCC performs the role of the Remuneration

Committee. During the year, Mr Tan Guong Ching

stepped down from the ERCC when he retired at the

Company’s AGM. Mr Ng Kee Choe also stepped down

as a co-opted member. We thank Mr Tan Guong Ching

and Mr Ng Kee Choe for their invaluable contributions

to the ERCC. Mr Venkatachalam Krishnakumar has

replaced Mr Tan Guong Ching on the Committee.

The ERCC members are all non executive directors.

Apart from Mr Peter Seah who is independent of

management, the other members of the ERCC are

independent directors.

The ERCC has access to professional advice from

appropriate external advisors as and when it deems

necessary. The ERCC may meet with these external

advisors without management being present. All

decisions at any meeting of the ERCC shall be decided

by a majority of votes of the ERCC members present

and voting (the decision of the ERCC shall at all times

exclude the vote, approval or recommendation of any

member who has a confl ict of interest in the subject

matter under consideration).

The ERCC has been authorised by the Board to carry

out the following key duties and responsibilities:

• Review and establish executive remuneration policy;

• Approve the remuneration package and service terms

for senior executives;

• Approve equity based incentive share plans and the

grant of performance share awards and targets for

senior executives;

• Approve non executive director remuneration

structure.

The ERCC met four times in 2004. Its key activities

centred on the assessment and development of

the management team, target setting, and the

determination of their compensation, incentives plan

and award.

In May, the ERCC endorsed the creation of an Executive

Offi ce to support the Group’s push for growth,

especially in the international markets. This was

subsequently approved by the Board. The Executive


Offi ce, comprising the President and CEO, two Deputy

CEOs, and the Chief Financial Offi cer, will strengthen

the execution of the globalisation strategy and provide

better focus on customers and growth areas. The two

Deputy CEOs were promoted from within the Group,

an endorsement of the confi dence of the Board in the

management team and the strength of talent in the

Group.

The Committee also reviewed and approved the grant

of share options and conditional performance share

awards under ST Engineering’s approved share plans.

The Group has set out a groupwide cross section of

executives’ remuneration by number of employees

from $100,000 upwards in bands of $50,000 up

to $250,000 on page 188. This is a comprehensive

analysis detailing remuneration for up to 1,000 of

its key employees instead of only for a small group

of selected individuals. It therefore gives a better

perspective of the remuneration pattern in the Group.

The Senior Human Resource Committee, chaired by Mr

Peter Seah, comprises Mr Tan Pheng Hock, Lieutenant-

General Ng Yat Chung and Dr Tan Kim Siew. During

the year, it met twice to review the development of

senior staff as well as those staff with the potential to

hold senior positions in the Group. During the year,

the Committee enhanced its system of identifying and

screening talent to be groomed for senior positions

through a framework of eight leadership competencies.

The Committee also reviewed succession plans for key

positions in the Group.

Accountability (Principle 10)The Board places importance on its relationship with

shareholders as it is accountable to them for the

Group’s performance.

Shareholders are required to approve directors’

fees and also the appointment and re-appointment

of auditors.

Directors and key senior executives of the Group are

prohibited from dealing in ST Engineering shares two

weeks before the announcement of ST Engineering’s

fi rst quarter, half year, third quarter and full year

results up to the date of the announcement of the

results. Additionally, all directors of the Group and its

employees are required to observe the insider trading

laws at all times.

The directors’ interests in shares of ST Engineering

and its related companies during the year are found

on pages 97 to 106.

Audit Committee (Principle 11)The Audit Committee comprises Mr Koh Beng Seng,

Dr Philip Pillai and Mr Venkatachalam Krishnakumar.

All the members of the Audit Committee are

independent directors. The Audit Committee held four

meetings during the year including a session with the

external and internal auditors, without management,

to review FY2003 results.

The Audit Committee reviewed and recommended to

the Board the release of the full year and half year

fi nancial statements, and considered and approved the

2004 Audit Plan and the 2004 Internal Audit (IA) Plan.

It also reviewed internal control procedures, Interested

Person transactions, corporate guarantee status and

noted updates on the risk review undertaken by the

Risk Review Committee. With delegated authority by

The ST Engineering Board provides leadership and guidance on corporate strategy, business directions, acquisitions and divestments, risk policy and implementation of corporate objectives.




the Board, the Audit Committee also met and approved

the release of the fi nancial results for the fi rst quarter

and third quarter of 2004.

In the fi rst meeting in 2005, the Audit Committee

reviewed the audit observations with the external

auditors for the fi nancial statements for FY2004 audit.

The Audit Committee also met with the external and

internal auditors, without management, to review 2004

results. There were no major issues highlighted and

the auditors confi rmed that they would provide an

unqualifi ed report.

The Audit Committee reviewed the nature and extent

of non audit services provided by the external

auditors during the year which included tax services.

It was satisfi ed that the quantum of services was not

signifi cant enough to call into question the external

auditors’ independence.

The Audit Committee also reviewed the performance

of the external auditors. It recommended to the Board

the re-appointment of Ernst & Young as auditors for

FY2005, after having been satisfi ed with its standards

of audit, independence and objectivity.

The Audit Committee was supported in its work by

the audit committees of the four main subsidiaries.

The respective Chairmen of the audit committees of

the four subsidiaries were invited to attend the Audit

Committee meetings of ST Engineering so as to have

a clear understanding of policies made at the holding

level and to give feedback from the subsidiaries’ audit

committees.

The Audit Committee has full authority to commission

and review fi ndings of internal investigations into

matters where it is alerted of any suspected fraud

or irregularity or failure of internal controls or

infringement of any law likely to have a material

impact on the listed Group’s operating results. It can

investigate any matter within its terms of reference and

with the full cooperation of management.

Internal Controls (Principle 12)Internal Audit (Principle 13)The Audit Committee oversees and appraises the

quality of the audit effort of the Company’s IA function.

The IA function in 2004 was carried out by the Group

Internal Audit (GIA), which resided in STPL. During

the year, GIA planned its IA work in consultation with,

but independent of, management. GIA attended every

Audit Committee meeting of ST Engineering and

its subsidiaries and reported on its IA work at such

meetings. In addition, the Audit Committee met GIA

at least once during the year without the presence of

management.

The 2004 IA Plan, which was approved by the Audit

Committee, identifi ed the broad business risks for focus

in the Business Continuity Plan to be drawn up under

the purview of the Risk Review Committee. When the

risk processes are fi nalised and approved by the Board,

IA will monitor and audit the risk processes.

The mix of independent and non executive directors contributes to useful and objective board deliberations. An independent minded director can constructively challenge and guide management without being adversarial in approach.


During the year, GIA made audit visits to overseas

subsidiaries in accordance with their annual IA

schedule. Post acquisition audit reviews of signifi cant

investments were made to ensure the objectives of

the acquisitions were met. There were no signifi cant

control issues highlighted by GIA.

The Board, through the Audit Committee, the President

and CEO and the Chief Financial Offi cer, considers

that the Group’s framework of internal controls

and procedures is adequate to provide reasonable

assurance of the integrity, confi dentiality and

availability of critical information and the effectiveness

and effi ciency of operations, safeguarding of assets

and compliance with rules and regulations. It is also

satisfi ed that problems are identifi ed on a timely basis

and there is in place a process for follow up actions to

be taken promptly to minimise unnecessary lapses.

With STPL ceasing to be the parent company of

ST Engineering with effect from 31 December 2004,

GIA has ceased to exist as a department. For 2005,

the Company has set up its own IA department, headed

by a qualifi ed professional, reporting directly to the

Audit Committee of ST Engineering. The IA department

has engaged the services of an external IA service

provider to supplement its limited resources, skills and

competencies so as to achieve the objectives of the

IA function.

Risk ManagementThe Risk Review Committee, chaired by Mr Winston

Tan, comprises LG Ng Yat Chung, Mr Lucien Wong,

Mr Venkatachalam Krishnakumar, Mr Tan Pheng Hock

and Mr Chang See Hiang, a co-opted member and

Board Director of Singapore Technologies Aerospace.

The Committee has commissioned a consultancy fi rm

to conduct a Value at Risk study of the risk exposures

of the Group. The nature and types of risks in the four

business segments of ST Engineering will be identifi ed

and thereafter internal controls will be refi ned and new

controls, where relevant, will be put in place to enable

management to better manage signifi cant risks.

The consultant’s fi ndings will be reviewed by the Risk

Review Committee before submission to the Board.

The section on risk management is found on pages

88 to 90.

In 2003, GIA introduced the concept of Control

Self-Assessment (CSA) in ST Engineering. CSA is a

methodology that helps management to identify and

manage risks. It has structured processes which tap

into the knowledge and experience of staff to self

assess the risks and controls of their businesses and

the systems and processes employed. As a follow up to

the two pilot CSA projects which were launched in two

subsidiaries with the help of external facilitators, GIA

carried out four CSA projects in four of the Company’s

subsidiaries during the year.

Budget and FinanceBudgets prepared by the respective subsidiaries are

consolidated at the ST Engineering level and presented

to the Budget and Finance Committee for review and

recommendation to the Board for approval.

During the year, the Budget and Finance Committee

held three meetings. Chaired by Mr Lucien Wong, the

Committee members are Mr Quek Poh Huat, Dr Tan

Kim Siew and Mr Tan Pheng Hock. The Committee

also reviewed the fi rst quarter, half year and third

quarter fi nancial statements of the Group, as well

as the forecast for FY2004 against the budget at

every quarter.

Business Investment and Divestment CommitteeThe Business Investment and Divestment Committee

comprises Mr Lim Chin Beng as co-opted member and

Chairman, Mr Tan Pheng Hock, LG Ng Yat Chung,

Mr Winston Tan and Mr Quek Poh Huat.




During the year, the Business Investment and

Divestment Committee, by way of a circular resolution,

approved a share swap arrangement which involved the

divestment of an overseas subsidiary in exchange for

a stake in the purchasing company, an overseas

listed company.

Communication with Shareholders (Principle 14)Greater Shareholder Participation (Principle 15)The Group believes in prompt disclosure of information

to its shareholders. In addition to quarterly live

webcasts of its results and briefi ngs to the media

and investment analysts, the Investor Relations team,

together with the President and CEO and Chief

Financial Offi cer, participated in roadshows in Hong

Kong, Singapore and the US during the year to ensure

that the investing community receives a balanced and

updated view of the Group’s performance and business.

The Board members attend AGMs and Extraordinary

General Meetings where shareholders present are given

an opportunity to clarify or question the Board on

issues pertaining to the resolutions proposed before

they are voted on. The external auditors are also

present at the AGM to assist the directors in

answering questions on audit related matters from

shareholders. The Group fully supports the Corporate

Governance Code’s principle to encourage active

shareholder participation.

The Group has also been supporting investor education

programmes organised by the Securities Investors

Association Singapore (SIAS) to enable investors to

gain competency in reading and interpreting

information in annual reports and other fi nancial

documents. The Group also engages in regular

dialogue with SIAS for feedback to improve its

disclosure and transparency standards.

Financial and other information are made available on

the Company’s website at http://www.stengg.com and

these are regularly updated.

All ST Engineering directors, including the CEO, retire and submit themselves for re-election at regular intervals at least once every three years. ST Engineering was an early adopter of this principle.


SINGAPORE TECHNOLOGIES ENGINEERING LTDBOARD COMPOSITION AND COMMITTEES

(As at 31 December 2004)

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Board Members

Rol

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Boa

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Mr Peter SEAH Lim Huat C C

Mr TAN Pheng Hock M M M M M

Mr KOH Beng Seng C

Lieutenant-General NG Yat Chung M M M

Dr TAN Kim Siew M M

Professor LUI Pao Chuen C

Mr Winston TAN Tien Hin M M C

Mr Lucien WONG Yuen Kuai C M

Dr Philip Nalliah PILLAI M M

Mr QUEK Poh Huat M M

Mr Venkatachalam KRISHNAKUMAR M M M

Brigadier-General Bernard TAN Kok Kiang+

Mr LIM Chin Beng CC

Mr CHANG See Hiang CM

Denotes:C – Chairman, CC – Co-opted Chairman, M – Member, CM – Co-opted Member* The members of the Executive Resource and Compensation Committee and the Nominating

Committee are the same.+ Alternate director to Lieutenant-General NG Yat Chung

31

Non Board Members



Board of Directors

Peter SEAH Lim Huat

TAN Pheng Hock

Dr Philip PILLAI

KOH Beng Seng

Winston TAN Tien Hin

Lucien WONG Yuen Kuai


Comprising a majority of independent members, the ST Engineering Board of Directors includes eminent practitioners in the fi elds of banking, fi nance, law, research, defence and management. They bring a range of perspectives and experience to deliberations on the Group’s policies and strategies.

33

Dr TAN Kim Siew

Brigadier-General Bernard TAN

Professor LUI Pao Chuen

Lieutenant-General NG Yat Chung

Venkatachalam KRISHNAKUMAR

QUEK Poh Huat

The names of the directors holding offi ce at the date of this report are set out below together with details of their academic and professional qualifi cations, date of fi rst appointment as directors, date of last re-election as director as well as directorships in listed companies.

Mr Peter SEAH Lim Huat, ChairmanMr Peter Seah Lim Huat was appointed non executive Chairman on 15 April 2002 and was last re-elected as Director on 3 April 2003. He is currently an Advisor of the Temasek Holdings Advisory Panel and was the President and CEO of Singapore Technologies Pte Ltd and a Board member until 31 December 2004. He was a banker for 33 years before retiring as Vice Chairman and CEO of the former Overseas Union Bank in 2001. Mr Seah is Chairman of SembCorp Industries Limited* and Singapore Computer Systems Limited*. He also sits on the Boards of CapitaLand Limited*, Chartered Semiconductor Manufacturing Ltd#, STATS ChipPAC Ltd# and StarHub Ltd*. Mr Seah is also President Commissioner of PT Indonesian Satellite Corporation Tbk, PT Bank Internasional Indonesia Tbk and Deputy Chairman of Global Crossing Limited. His other appointments include being a member of the Board of Siam Commercial Bank Public Company Limited. He is also a member of the Institute of Defence and Strategic Studies. Mr Seah serves on the Board of the Government of Singapore Investment Corporation and is Chairman of EDBV Management Pte Ltd. He is also the Vice President of the Singapore Chinese Chamber of Commerce and Industry and Honorary Treasurer of the Singapore Business Federation. Mr Seah was awarded the Public Service Star (Bintang Bakti Masyarakat) for his role as Chairman of the Sub-Committee on Finance and Banking, Committee on Singapore’s

Competitiveness in 1999. He graduated from the former University of Singapore in 1968 with an Honours degree in Business Administration.

Mr TAN Pheng Hock Mr Tan Pheng Hock is the President and CEO of Singapore Technologies Engineering (ST Engineering) and an executive Director. He was appointed Director on 1 May 2001 and will be due for re-election at this coming AGM under Article 98 of the Company’s Articles of Association. Mr Tan sits on the Board of SembCorp Marine Ltd*. He is Chairman of the Nanyang Polytechnic (NYP) Board of Governors and also a member of the Temasek Defence Systems Institute, the Singapore Training and Development Association Advisory Council and the Consultative Committee of the NUS Department of Mechanical Engineering. Mr Tan began his career with the Group as an engineer in Singapore Technologies Marine (ST Marine) in 1981. He was previously Executive Vice President of ST Marine, President of Singapore Technologies Kinetics, President and Chief Operating Offi cer of ST Engineering and ST Engineering Group President. Mr Tan holds a Bachelor of Science (Marine Engineering) (First Class Honours) from the University of Surrey and a Master of Science in Management from Stanford University, USA.

Mr KOH Beng SengMr Koh Beng Seng is the Deputy President of United Overseas Bank Ltd (UOB) (until 31 January 2005) and a Director of both UOB and Far Eastern Bank Ltd (both until 15 February 2005). He was appointed independent non executive Director on 15 September 2003 and was last re-elected as Director on 31 March 2004. Prior to UOB, Mr Koh was Senior Advisor to Asia Pulp



Board of Directors’ Profi le


& Paper Co Ltd and Advisor to Bank of China. Mr Koh has extensive experience in the fi nancial services sector. He was with the Monetary Authority of Singapore from 1973 to 1998, where he served as Deputy Managing Director from 1988 to 1998. Mr Koh was also appointed an advisor to the International Monetary Fund to reform Thailand’s fi nancial sector from 1998 to 2000. Mr Koh holds a Bachelor of Commerce (First Class Honours) from the former Nanyang University, Singapore, and a Master of Business Administration from Columbia University, New York, USA.

Lieutenant-General NG Yat ChungLG Ng Yat Chung is the Chief of Defence Force. He was appointed a non executive Director on 15 June 2003 and was last re-elected as Director on 31 March 2004. He joined the Singapore Armed Forces (SAF) in 1979 and was awarded the SAF Overseas Scholarship in 1980. In the course of his military career, he has held various key command and staff positions in the Ministry of Defence. LG Ng is the Deputy Chairman of SRCC Pte Ltd. He is also a Council member of the National University of Singapore (NUS) and Director of the Defence Science & Technology Agency. LG Ng holds a Bachelor of Arts (Honours) (Engineering Tripos) and a Master of Arts (Mathematics) from the University of Cambridge, UK, as well as a Master of Business Administration from Stanford University, USA.

Dr TAN Kim SiewDr Tan Kim Siew is Permanent Secretary (Defence Development), Ministry of Defence (MINDEF). He was appointed non executive Director on 15 December 2003 and was last re-elected as Director on 31 March 2004. Prior to his present appointment with MINDEF, he was the Deputy

Secretary (Policy) with the Ministry of Finance. He was formerly the CEO and Chief Planner of the Urban Redevelopment Authority from 1996 to 2001. Dr Tan is a Director of Keppel Offshore & Marine Ltd and HDB Corporation Pte Ltd. Dr Tan holds a Bachelor of Arts degree in Engineering Tripos and a PhD in Engineering from the University of Cambridge, UK.

Professor LUI Pao Chuen Prof Lui Pao Chuen is the Chief Defence Scientist in MINDEF. He was appointed non executive Director since 1 October 1997 and was last re-elected as Director on 31 March 2004. Professor Lui sits on the management boards of various scientifi c and research institutes. He is an Adjunct Professor in the Engineering Faculty of the NUS. He is also the Deputy Chairman of SembCorp Engineers & Constructors Pte Ltd, a subsidiary of SembCorp Industries Ltd and is Chairman of the Management Board of Temasek Defence Systems Institute and Temasek Laboratories, NUS, and Temasek Laboratories, Nanyang Technological University. Prof Lui graduated from the former University of Singapore with a Bachelor of Science (Honours) in Physics and obtained a Master of Science degree in Operations Research & Systems Analysis from the Naval Postgraduate School, USA.

Mr Winston TAN Tien Hin Mr Winston Tan Tien Hin is the Managing Director of Corporate Brokers International Pte Ltd. He was appointed independent non executive Director on 1 October 1997 and was last re-elected as Director on 31 March 2004. Mr Tan is also a Director of Ascendas Pte Ltd and a member of the Salvation Army Advisory Board. He holds a Bachelor of Science degree in Physics from the former University of Singapore.

35

Mr Lucien WONG Yuen KuaiMr Lucien Wong Yuen Kuai is the Managing Partner of Allen & Gledhill. He was appointed an independent non executive Director on 1 October 1997 and will be due for re-election at this coming AGM under Article 98 of the Company’s Articles of Association. Mr Wong is a Director of CapitaLand Limited*, Cerebos Pacifi c Limited* and Raffl es Investments Ltd. He graduated from the former University of Singapore with a Bachelor of Law (Honours).

Dr Philip PILLAI Dr Philip Pillai is currently the Senior Partner of Shook Lin & Bok. He was appointed an independent non executive Director on 1 April 2000 and will be due for re-election at this coming AGM under Article 98 of the Company’s Articles of Association. Dr Pillai is a Director of Hotung Investment Holdings Limited*, Lindeteves-Jacoberg Ltd*, Singapore Press Holdings Limited* and a Board member of the Monetary Authority of Singapore. He is also a member of the Board of Governors of the Singapore International Foundation. Dr Pillai obtained his LL.B (First Class Honours) from the former University of Singapore, LL.M and SJD from Harvard University, USA.

Mr QUEK Poh Huat Mr Quek Poh Huat is the Group CEO of Singapore Power Ltd. He was appointed a non executive Director on 15 April 2002 and was last re-elected on 3 April 2003. Mr Quek is a Director of Singapore Power Ltd, SP PowerAssets Limited, SP PowerGrid Limited, SP Services Limited and PowerGas Limited. He is also the Chairman of Temasek Management Services Pte Ltd. He obtained his Bachelor of Science (Chemical Engineering) from the University of Leeds, UK, and Master of Science in Management from the Naval Postgraduate School, USA. He is also Singapore’s non resident Ambassador to Sweden. Mr Quek was awarded the Public Service Star in August 1994.

Mr Venkatachalam KRISHNAKUMARMr Venkatachalam Krishnakumar was the Chief Operating Offi cer and Chief Financial Offi cer for the Asia Pacifi c Consumer Bank for Citigroup until 28 February 2005. He was appointed an independent non executive Director on 15 April 2002 and will be due for re-election at this coming AGM under Article 98 of the Company’s Articles of Association. He is a member of the Board of the Singapore Land Authority. He also serves on the boards of e-Serve (India), Citibank Korea Inc. and Citibank Berhad in Malaysia. He holds a Bachelor of Engineering and Master of Business Administration from the Indian Institute of Management, India.



Board of Directors’ Profi le


Brigadier-General Bernard TAN Kok KiangBG Bernard Tan Kok Kiang is the Commander of a Division and concurrently Chief Armour Offi cer in MINDEF. He was appointed Alternate Director to LG Ng Yat Chung on 1 June 2003. He has held various positions in the last 17 years and assumed his present offi ce in 2002. He joined the SAF in 1984 and was awarded the President cum SAF Scholarship in 1985. He was also awarded the Lee Kuan Yew Scholarship in 2001. BG Tan is currently the Vice President of SAFRA. BG Tan holds a Bachelor of Social Science (First Class Honours) (Economics, Political Science) from the University of Birmingham, UK, and a Master of Business Administration from the Massachusetts Institute of Technology, USA.

* listed on the Singapore Exchange Securities Trading Limited# listed on both the Singapore Exchange Securities Trading Limited and NASDAQ

PAST DIRECTORSHIPS IN THE LAST THREE YEARS

Mr Peter SEAH Lim HuatCivil Aviation Authority of SingaporeBoard of Commissioners of Currency, Singapore AF (Indonesia) Pte LtdSingapore Technologies Pte Ltd

Mr TAN Pheng Hock TranSys Pte LtdST Training & Simulation Pte LtdUnicorn International Pte Limited

Mr KOH Beng SengChartered Semiconductor Manufacturing LtdST Assembly Test Services Ltd (now known as STATS ChipPAC Ltd.)

Lieutenant-General NG Yat ChungSingapore Technologies Kinetics Ltd Trade Development Board Public Utilities Board

Mr Winston TAN Tien HinSingapore Technologies Electronics LimitedMethodist Book Room Pte LtdEnersave Holdings LtdGintic Technologies Pte Ltd

Mr Lucien WONGRaffl es Hotel (1886) LtdJohn Hancock International (Southeast Asia) Pte LtdJohn Hancock Life Assurance Company LtdConstruction Exchange Pte Ltd

Mr QUEK Poh HuatShangri-la Asia LtdS I Technology Fund LimitedPSA Corporation LtdAsia Financial Holdings Pte LtdSingapore Telecommunications LimitedOther subsidiaries of Temasek Holdings (Private) Limited

Mr Venkatachalam KRISHNAKUMARPolaris Software Lab Limited

37

Senior Management



Francis HENGChief Financial Offi cer

TAY Kok KhiangPresident,Aerospace Sector

SEAH Moon MingPresident,International Business

Deputy CEO,(Electronics and Land Systems)

President,Electronics Sector

SEE Leong TeckPresident,Marine Sector

from left to right


WU Tzu ChienPresident,Land Systems Sector

John G. COBURNChairman and CEOUS Operations


WEE Siew KimPresident, Defence Business

Deputy CEO,(Aerospace and Marine)

The ST Engineering management team is united by a shared vision and commitment to excellence and innovation, leading by example in driving the enterprise spirit.

Jeep Wrangler courtesy of DaimlerChrysler SEA Pte Ltd

Mr TAN Pheng Hock is President and CEO of ST Engineering and a Director of the ST Engineering Board. (Mr Tan’s profi le can be found on page 34.)

Mr WEE Siew Kim was appointed Deputy CEO on 1 May 2004, overseeing the Aerospace and Marine sectors. He is concurrently the President, Defence Business of ST Engineering, a position he has held since 1 May 2002. Prior to his current position, Mr Wee was President of ST Engineering’s Europe operations from July 2001. Mr Wee joined Singapore Technologies Aerospace (ST Aerospace) as an engineer in 1984. He was appointed President, ST Aerospace from December 1997 to July 2001. Mr Wee was awarded a Bachelor of Science (First Class Honours) in Aeronautical Engineering from the Imperial College of Science & Technology, University of London, UK, and holds a Master in Business Administration from Stanford University, USA. Mr Wee is also a Member of Parliament for the Ang Mo Kio Group Representative Constituency.

Mr SEAH Moon Ming was appointed Deputy CEO and President (International Business) on 1 May 2004, overseeing the Electronics and Land Systems sectors. He is concurrently President, Singapore Technologies Electronics (ST Electronics), a position he has held since 8 December 1997 after serving as Managing Director from 1 July 1997. Mr Seah was General Manager of CET Technologies, a subsidiary of ST Electronics, from July 1994 to July 1997. Mr Seah holds a Master of Science in Electrical Engineering, with distinction, from the Naval Postgraduate School, USA. He is also a member of the International Advisory Panel of the National Information & Communications Technology, Australia, and an Executive Council member of the China Council for the Promotion of International Trade.

Mr Francis HENG Hang Song was appointed Chief Financial Offi cer on 21 June 2004. In this capacity, Mr Heng oversees the fi nance functions, including investor relations, of the ST Engineering Group. Prior to his current position, Mr Heng was Chief Financial Offi cer and Group Treasurer of Hongkong Land Holdings and Jardine Matheson Group respectively. Mr Heng has also held various positions with the Tetra Pak group, JP Morgan, Monetary Authority of Singapore and United Overseas Bank, and has worked in Hong Kong, London, New York and Switzerland. Mr Heng holds a Bachelor of Business Administration from the National University of Singapore (NUS).



Senior Management’s Profi le


Mr TAY Kok Khiang was appointed President, ST Aerospace on 10 July 2001. Mr Tay joined ST Aerospace as Vice President/General Manager of ST Aerospace Engineering in 1993, and held many senior management appointments before becoming President. He was Deputy President and Chief Operating Offi cer prior to his current appointment. Mr Tay holds a Master of Science (Industrial Engineering) from the NUS.

Mr WU Tzu Chien was appointed President, Singapore Technologies Kinetics (ST Kinetics) on 9 February 2000. Mr Wu joined the former Singapore Technologies Automotive (ST Automotive) group in 1986. He became President, ST Automotive in 1993. He was also appointed President, Chartered Industries of Singapore (CIS) in 1999. With the acquisition of CIS, ST Automotive was renamed ST Kinetics, and Mr Wu assumed his current position as President, ST Kinetics. Mr Wu holds a Bachelor of Engineering from the University of Melbourne, Australia.

Mr SEE Leong Teck was appointed President, Singapore Technologies Marine (ST Marine) on 8 December 1997. Mr See joined ST Marine as a naval architect in the early ‘80s. Mr See holds a Master of Science (Naval Architecture) from the University of London, UK, and a Master of Business Administration from the Cranfi eld School of Management, UK.

General (Retired) John G. COBURN was appointed Chairman and CEO of ST Engineering’s US headquarters, Vision Technologies Systems, on 1 December 2001. Gen (Ret) Coburn joined the Group after an illustrious career with the US Department of Defence for 39 years. Prior to taking up this position, Gen (Ret) Coburn was Commanding General of the US Army Materiel Command (AMC), one of the largest commands in the army with 60,000 employees and activities in 40 states and over a dozen foreign countries. Gen (Ret) Coburn holds a Juris Doctor degree from the University of Missouri, USA.

41

ST Engineering




Francis HENGChief Financial Offi cer

INTERNAL AUDIT

Grace SEEHead

DEFENCE BUSINESS

LOW Yee KahSenior Vice President

INTERNATIONAL MARKETING

Patrick CHOYExecutive Vice President

NEW BUSINESS

Steven CHEONGSenior Vice President

HUMAN RESOURCE

TAN Nga KokSenior Vice President/Director

BUSINESS EXCELLENCE

Harnek SINGHVice President/Director

STRATEGIC PLANS

Robin THEVATHASANSenior Vice President

LEGAL

LOW Meng WaiVice President/Director

CORPORATE COMMUNICATIONS

LIM Beng SeeVice President/Head

TECHNOLOGY

FONG Saik HayChief Technology Offi cer

INFORMATION TECHNOLOGY

TEO Chin SengChief Information Offi cer

SPECIAL PROJECTS

CHANG Cheow TeckPresident

PROCUREMENT

GOH Bak NguanChief Procurement Offi cer/

Vice President

RISK MANAGEMENT

Carol LIMVice President

AUDIT COMMITTEE


Executive Offi ce

Organisation Chartas at 28 January 2005

43

WEE Siew KimPresident

DEFENCE BUSINESS

Deputy CEO AEROSPACE AND MARINE

SEAH Moon MingPresident

INTERNATIONALBUSINESS

Deputy CEO ELECTRONICS AND LAND

SYSTEMS

AEROSPACE

TAY Kok KhiangPresident

HO Yuen SangDeputy President and

Chief Operating Offi cer (Defence Business)

MARINE

SEE Leong TeckPresident

HAN Yew KwangChief Operating Offi cer

(Defence Business)

ELECTRONICS

SEAH Moon MingPresident

LEE Fook SunDeputy President

(Operations) and President (Defence Business)

NG Chong Khim President,

Communication and Sensor Systems Group

Deputy President, Corporate Services and

Marketing

TAY Hun KiatPresident

Asia Pacifi c Operations

LAND SYSTEMS

WU Tzu ChienPresident

SEW Chee JhuenDeputy President

(Operations) and President (Defence Business)

TEO Boon SweeExecutive Vice President

Commercial Business

US OPERATIONS

John G. COBURNChairman and CEO

EUROPE OPERATIONS

OOI Ling HeongExecutive Vice President

ADVANCED ENGINEERING CENTRE

FONG Saik HayPresident

INTEGRATED SERVICES

LIM Soon HengVice President/

General Manager


Extending

Our Horizons

Megaptera novaeangliae – HUMPBACK WHALEThe humpback whale embarks on marathon migration across oceans to seek suitable feeding and breeding grounds. Displaying endurance and perseverence, it travels from frigid Alaska to tropical Hawaii in a single journey of over 3,000km.

All sectors of the ST Engineering Group won new customers and expanded their capabilities in 2004, despite the dynamics and challenges in their respective industries.

Aerospace



In 2004, with stronger global economic growth, air travel rose from the depressed levels of the previous three years. Profi tability of the aviation industry, on the other hand, remained affected by the after shocks of 9/11, the war in Iraq, SARS and the rise in fuel prices.

While passenger load factors rose, fl ight frequency and yields did not recover to pre 2001 levels.

Some airlines appeared to be recovering to profi tability or reduced losses. Legacy airlines in general continued to re-engineer their operations and reduce costs in the face of rising fuel prices, higher interest rates and increased competition from the rise of LCCs.

The weakening US dollar, coupled with rising US interest rates, led to higher fi nancing costs

ST Aerospace prides itself in having a clear focus on the interests of customers, big and small. Despite the aviation downturn over the last few years, it had a robust order book throughout 2004 that included PTF aircraft conversions, maintenance work and development activities.

INDUSTRY REVIEW


Flying High through Total Support

47

for US operators. This added to their diffi culties arising from falling revenues. Continued US dollar weakness may result in other complications; other currencies, including the Chinese yuan, may depeg from the US dollar and revalue.

The MRO industry was reported to have shrunk by 14% from 2001 due to reduced fl ying hours, the retirement of maintenance intensive older aircraft

and postponement of non obligatory maintenance and modifi cation work. Many MROs experienced diffi cult times and some have ceased operations. Nevertheless, the industry still faces overcapacity, and further consolidation is possible.

Legacy airlines are expected to continue to restructure their operations to focus on their core businesses and outsource their MRO work to reduce

Singapore Technologies Aerospace (ST Aerospace), the

Group’s aerospace arm, is a leading third party aviation

maintenance and engineering specialist.

With almost three decades of supporting the Republic

of Singapore Air Force (RSAF), ST Aerospace is

the strategic partner of the RSAF and has been

meeting their exacting requirements for leading edge

technologies. Today, it has a global customer base,

serving military air forces, commercial airlines and

freight carriers.

Penetrating new marketsBacked by its span of capabilities, range of innovative

solutions and track record in turnaround time and

quality work, ST Aerospace was able to capitalise

on new market opportunities. One such market was

the emerging Low Cost Carriers (LCCs). Through

programmes such as Maintenance By the Hour (MBH™)

and Total Aviation Support (TAS), ST Aerospace offered

comprehensive and fl exible solutions that enhanced its

competitive position in this segment, especially in Asia.

In 2004, AirAsia awarded ST Aerospace a second

contract of US$63.5m ($104m) for Maintenance, Repair

and Overhaul (MRO) services for 10 of its aircraft

powered by CFM56-3 engines. Valuair was the source

of another similar TAS contract. Jetstar Asia became

ST Aerospace’s latest customer with a US$47m ($77m)

contract for its fl eet of A320s, which will grow to

eight by 2005. The contract is for line, light and base

maintenance, engineering and technical services, as

well as components management and support.

Expanding capabilities ST Aerospace’s major facilities are located at Changi,

Paya Lebar and Seletar airports, Singapore; Mobile and

San Antonio, USA; and Bournemouth and Stansted,

UK. A new capability for commercial airframe MRO was

added this year in the expanding Chinese market with

the establishment of Shanghai Technologies Aerospace

Company (STARCO) in Shanghai. STARCO, a joint

venture with China Eastern Airlines, gives ST Aerospace

an important foothold in China’s fast growing

aviation sector.

The Aircraft Maintenance & Modifi cation (AMM) group

has, since 2003, strengthened its repair capabilities

for all narrow and wide-bodied Airbus, Boeing and

McDonnell Douglas aircraft types, including the most

recent A330, A340 and the B777. For military aircraft,

ST Aerospace extended its capabilities to the F-16

fi ghter aircraft and the Chinook helicopter. These

capabilities included airframe as well as engines

and components repair and overhaul. The company

can now service a wide range of military aircraft

and helicopters.

In 2004, in response to customer demands,

ST Aerospace added three new hangars. Costing

about US$20m ($33m), they comprise two at ST

Mobile Aerospace Engineering (MAE), USA, and one

at ST Aviation Services Co (SASCO), Singapore. ST

Aerospace is also building two narrow-body slots at its

Seletar facility for ST Aerospace Engineering. These are

expected to be ready in early 2005. At the same

Industry Review >>

Aerospace

US$ b

MRO Market Value & Forecast

2004

2009

2014

2003

2002

2001

Line Maintenance Components

Engine HMV & MODS

0 10 20 30 40 50

$42.2

$37.8

$36.1

$37.0

$41.8

$49.1



time, a wide-body aircraft hangar is being planned in

STARCO at Pudong Airport to complement the existing

two hangars at Hongqiao Airport, Shanghai.

On engine support, ST Aerospace further developed

capabilities for the B737CG, B737NG and the F-16.

Service centre agreements were renewed with Rolls

Royce for the repair and overhaul of the T56/501D

engines. New service centre status was also granted by

Honeywell for the repair and overhaul of its

T55 engines.

On non engine support, the Component/Engine Repair

& Overhaul (CERO) group extended its capabilities for

the A320, A310/300, B777, B767, B757, B737NG,

B737CG and MD-11 commercial aviation components,

as well as added new capabilities for the F-16 and

Chinook military components. ST Aerospace received

additional authorisation from Original Equipment

Manufacturers (OEMs), including Howell Instruments, for

the repair and overhaul of all its products in South East

Asia; Sargent Controls & Aerospace for its hydraulic

valves in Asia; and Parker Aerospace for the promotion

and repair of its F-16 hydraulic pumps in Singapore.

Notable service centre renewals included an agreement

with Eurocopter for the SA-330, AS-332 and AS-550

helicopters in Asia.

The Engineering & Materials Services (EMS) group

consolidated its strengths in engineering expertise.

It began development on variants of the B757

Passenger To Freighter (PTF) conversion including a

15 pallet confi guration and marketing its 141/2 pallet

confi guration on an approved Boeing Supplemental

Type Certifi cate.

ST Aerospace’s Engineering and Development Centre

completed Maintainability and Reliability Engineering

studies that enabled customers to improve their fl eet

cost effi ciency. This was an important service to

customers, especially those on TAS programmes.

operating costs. This is a business model the LCCs have adopted from the start.

Strand Associates Inc, an aviation consulting fi rm,

estimates that half of MRO work is now outsourced

compared to one third 10 years ago, and expects about

two thirds to be outsourced by the end of the decade.

Chart infomation and italicised text source: Overhaul and Maintenance magazine, April 2004.

>> Industry Review


ST Aerospace’s quality MBH™ programmes secured a second contract for the maintenance of CFM56 engines used on AirAsia’s 10 aircraft.

A joint venture company with China Eastern Airlines, STARCO is the latest addition to ST Aerospace’s global network of facilities that offers MRO services for commercial aircraft.

Developed in less than two years for surveillance activities, ST Aerospace’s hand launched mini UAV, the Skyblade II, was unveiled in 2004.

49

ST Aerospace used its Aircraft Maintenance and

Engineering System, also known as AMOS, to support

the maintenance planning needs of TAS customers.

The software performs maintenance planning, reliability

calculations, components and rotables tracking and

aircraft scheduling. AMOS thus enables customers

to be updated real time on the progress of their

maintenance programmes.

In 2004, the engineering and development arm of

ST Aerospace fi led six patents.

Winning new customersMajor overseas military projects in 2004 included

the US Pacifi c Air Force C-130 programme for

depot maintenance work, the refurbishment of 20

UH-1H helicopters for the Philippines Air Force and

a fl eetwide avionics standardisation programme for

another customer. ST Aerospace extended its range

of capabilities in the Unmanned Aerial Vehicles

(UAV) arena through the launch of its Skyblade II for

surveillance activities.

In the commercial sector, ST Aerospace furthered

its relationship with its blue chip customers such

as All Nippon Airways, FedEx Express, Japan Airlines,

Northwest Airlines and United Airlines. It signed

a 10 year contract with United Parcel Service

(UPS), for approximately US$438m ($715m), to

exclusively maintain UPS’ DC-8s, A300s and MD-11s

at ST Aerospace’s repair stations globally. There were

also new customers, large and small, further positioning

the aerospace group as a global service provider.

In engineering and modifi cation activities,

ST Aerospace undertook more PTF modifi cations,

design and development programmes. In 2004,

apart from UPS, other airlines such as China Eastern

Airlines, EVA Airlines and Lufthansa Cargo also

commissioned MD-11 conversions. All in all, there

were 38 MD-11 conversion orders secured,

of which 18 were redelivered by yearend.

The Engines business fi rmly established its position

as an MRO and MBH™ provider for the military

aviation market and the CFM56 and JT8 market. Its

components repair and overhaul capabilities assured

good turnaround time and responsive support to

customers with quality delivery. These represent a

standard that customers have come to expect from

ST Aerospace.

With 35 patents fi led since 1998 and 15 patents already granted, ST Electronics continued to innovate, launching customised solutions in communications, homeland security, electronics and Information Communications Technology (ICT).

Electronics

INDUSTRY REVIEW



In 2004, major economies showed clearer signs of sustainable growth. Regional economic growth was also stronger. Several regional economies now have healthier public fi nances to address issues like inadequate transportation infrastructure and the consequent traffi c congestion in cities. Hence, more Asian cities are planning to extend or build new rail and mass rapid transit systems.

However, uncertainties remain. If oil and commodity prices continue to rise, economic growth will inevitably slow; these higher raw material costs will affect profi t margins. Terrorism remains a key concern, its effect on tourism and travel still severe in some parts of the world.

The need for heightened security is a sign of the times and countries are responding to this

Photo courtesy of Land Transport Authority, Singapore


Singapore Technologies Electronics (ST Electronics), the

Group’s electronics arm, is a leading electronics and

ICT system house with offi ces in Australia, China, Hong

Kong, Malaysia, Mexico, Taiwan and the US, marketing

to more than 60 countries. In 2004, ST Electronics

penetrated new markets and won new customers,

expanded its capabilities and continued to introduce

cutting edge commercial and defence applications.

Penetrating new markets ST Electronics and its subsidiaries made further inroads

into China this year. Its Large-Scale Systems (LSG)

division was commissioned by Guang Zhou Metro

Corporation in Guangdong province to provide an

Automatic Fare Collection (AFC) system for the Mass

Rapid Transit (MRT) Line 4. It will design, supply, install

and commission the AFC system, including the ticket

vending machines. CET Technologies (CET) was also

awarded a contract to provide on-train communications

systems for another Guangzhou MRT Line. These

contracts enhanced ST Electronics’ profi le in China

in intelligent building, rail electronics and traffi c

management systems.

ST Electronics also broke new ground in Taiwan. It was

awarded a contract for a communications and disaster

recovery system and to supply a new fl eet of forward

command and communication vehicles by the National

Fire Agency (NFA) (under Taiwan’s Ministry of Interior).

When delivered in 2006, this $11.6m system will allow

the NFA to mobilise and coordinate emergency rescue

and disaster recovery efforts across Taiwan.

Another success was Agilis Communication

Technologies (Agilis) being selected by OSCMAR

International of New Zealand to supply a commercial

satellite broadband solution for its combat training,

simulation and instrumentation products. Its Very Small

Aperture Terminals will be used to form a high speed

backbone enabling realistic ground troop combat

training in real time over widely dispersed

geographical locations.

SES Systems (SES) entered new markets in Africa and

India. In Botswana, the Ministry of Energy, Mines

and Water Affairs, the Department of Taxes and the

Botswana Police Service contracted SES to develop

and provide e-Government solutions. SES also won,

against stiff international competition, a contract

from the Airports Authority of India to supply an Air

Traffi c Control Aerodrome Visual Simulator for its Civil

Aviation Training Centre.

Expanding capabilities

ST Electronics continued to innovate, launching

customised solutions in areas like communications,

homeland security, electronics and ICT.

It launched a purpose-built solution, Maritime, Aviation

and Port Security (MAPS), to tackle today’s terrorism

threats and uncertainties facing ports, airports

and key installations and infrastructures. MAPS

integrates automated surveillance, threat detection,

assessment and immediate response in one solution

for key installations. Using state of the art sensors

and electronic fences, command and control, secured

Bringing Cutting Edge Solutions to the World

51

through various public safety and homeland security solutions.

There were also signifi cant developments in China. To forestall overheating of the economy, Chinese policy makers tightened credit and spending, cutting or delaying large infrastructure projects. Indications so far are that the Chinese economy will not slow signifi cantly. The spending curbs have also not been

uniformly applied to the larger cities like Beijing, Guangzhou and Shanghai nor to major infrastructure projects. These cities will need to continue to build their infrastructure to prepare for major host activities like the Beijing Olympics in 2008 and the Shanghai World Expo in 2010. These various medium term requirements would likely create business opportunities for the sector.

Industry Review >>

Electronics



communication and tracking devices, MAPS offers

surface and sub-surface surveillance protection to

vessels at ports and wharves and, most importantly,

helps secure port infrastructure.

LSG launched its third generation ST8100, SecurNet

Integrated Security and Emergency Management

System this year. The new system, operating on the

latest Windows XP platform, integrates digital video

surveillance and perimeter protection. It has been

deployed in various defence and commercial sites.

To meet increasingly complex communications needs,

Agilis developed and launched new solutions: the

Coastal and Mobile Surveillance Systems offering 24x7,

all weather automated surface surveillance radar; the

C and Ku band high power BUC and dual feed antennae

for operators that require simultaneous dual frequency

operations; and an enhanced Network Management

System for greater control and tracking of assets

in a communications network for seamless

system operations.

In another innovation, CET developed its fl eet

management and wireless communications capabilities

into telematics solutions.

By integrating General Packet Radio Service (GPRS),

Bluetooth and Global Positioning System (GPS),

telematics equip vehicles with wireless communications

and computing capabilities. Users can then access

the internet, emergency assistance, information and

services on the go. CET also developed a range

of hardware based encryption devices for laptop

computers and the world’s fi rst multi functional

universal serial bus token for logical and physical

access to meet the demand for data and communication

security for people on the move.

ST Electronics also rolled out various training and

simulation systems through ST Training & Simulation

(STTS). These included cost effective training systems

like the Unmanned Aerial Vehicle (UAV) Trainer and the

Advanced Combat Emulator.

ST Electronics continued to form partnerships with, and

invest in, regional and international players to provide

value added solutions and penetrate targeted markets.

It acquired a 21.35% equity stake in ECS Holdings

(ECS) through SES. ECS’ products and services

complement SES’ real time solution thrusts, while SES

will leverage on ECS’ channel coverage and business

networks in the region, particularly in China.

Apart from economic developments, the industry is being infl uenced by shifts in customer needs and preferences towards intelligent infrastructure electronics systems.

The industry in the region is also being shaped by trends in business practices and models. In some countries or sectors, where customers lack funds, project fi nancing is typical. These customers also

prefer arrangements like turnkey Engineering Procurement Contracts with full fi nancing, Build Operate and Transfer or Build Own Operate and Transfer.

>> Industry Review


MMDS brought cable programmes to homes in Latin America.

Installation of VSAT Terminal in Marseille, Southern France.

Real time and mission critical software solutions.

53

SES also took a 25% equity stake in Sandz Solutions

(Singapore) (Sandz) which provides solutions and

products in high performance computing and other

business solutions for the fi nancial services and

telecommunications industries and public sector

agencies. SES will leverage on Sandz’s expertise and

its network of contacts, particularly in Indonesia and

the Philippines.

In China, SES set up Xinke Information Systems in

Shenzhen to tap the talent pool there to support

customers and provide public safety solutions to

Guangzhou and Shenzhen.

Winning new customersST Electronics continued to win new customers from

around the world.

It will provide a rail communications solution for Taipei’s

MRT/MCT (Medium Capacity Transit) system. This $61m

contract to LSG is for a communications system for two

MRT lines and for upgrading the existing radio analog

system to the more advanced Tetra Radio System. This

contract reinforces ST Electronics’ reputation in Taiwan,

where it has been providing quality rail solutions in

Taipei and Kaohsiung since 1993.

CET was awarded a $163m contract by Knowledge

Internet Solutions for an automotive telematics system

in Thailand. This will provide drivers with mobile

information services including access to emergency

roadside assistance and entertainment.

In Latin America, ST Electronics’ Multi-channel

Multipoint Distribution System (MMDS) downconverters

continued to gain market share. Latin America is a

potentially large market for this product as MMDS

provides digital quality television transmission to

areas where terrain makes it diffi cult to build terrestrial

communications infrastructure. Orders since 2002

amounted to about $55m.

STTS secured a number of projects in 2004 including

one from Mitsui OSK Line to provide security

consultancy for their vessels passing through the

Straits of Malacca. STTS will also provide ship handling

training services to the Republic of Singapore Navy

(RSN). The Royal Thai Armed Forces also awarded

STTS a contract to upgrade its helicopter

simulator programme.

Two of ST Electronics’ subsidiaries have been awarded

work for systems on fi ve frigates for the RSN. The

fi rst locally built frigate was launched in July and

outfi tting work will commence with CET providing an

advanced communications system. SES will provide

Standard Operating Common Consoles for the Combat

Information Centre, where the ship’s command team will

direct and orchestrate all warfare activities.

IT developmentsST Electronics stays on the forefront of technology

with 35 patents fi led since 1998 and 15 patents

already granted.

Agilis has implemented a new automated Time

Charging Management System (TCMS) for more cost

effective project analysis and planning. The project also

won the National IQC Convention 2004 STAR Award.

ST Electronics also introduced a supply chain

management solution for e-shipping. This provides

for better management of outshipment processes and

enhances effi ciency in validation of freight invoices.

ST Kinetics remained resolute in its efforts to access new markets and customers, packaging products and solutions for defence and commercial customers around the world.

Land Systems

INDUSTRY REVIEW



Commercial SectorIn 2004, Asian economies showed stronger growth, recovering from negative developments in the previous year, such as SARS. Their long term growth prospects seem intact, signalling continued infrastructure and project spendings over the medium term.

While China expects to cool its economy in the short term, it continues to offer exciting prospects.

Since 2003, annual Foreign Direct Investments (FDI) into China have exceeded FDI into the US. FDI into China was estimated at about US$54b and US$60b in 2003 and 2004 respectively (Source: CEIC Data). The strong FDI boosts China’s plans to modernise its infrastructure and develop its energy and power sector. In turn, the construction industry and related sectors, such as heavy equipment and vehicles, will likely see sustained growth over the next few decades.


Singapore Technologies Kinetics (ST Kinetics), the

Group’s land systems arm, designs, manufactures

and services a wide range of military and commercial

vehicles, weapons and munition systems. In 2004,

it continued to provide cutting edge technologies

to address the growing needs in homeland security

and the modern battlefi eld. Leveraging on core

competencies, it has expanded its commercial

business and accelerated its penetration into China’s

rapidly expanding construction equipment and

automotive sectors.

Penetrating new marketsST Kinetics remained resolute in its efforts to access

new markets and customers, packaging products and

solutions for defence and commercial customers around

the world.

The Bronco All Terrain Tracked Carrier continued to

attract interest from many overseas armies. In July,

ST Kinetics was awarded a feasibility study contract

to explore the development of a Future All Terrain

Vehicle for the Finnish Defence Forces. This endorses

ST Kinetics standing as an international defence

company. As part of the evaluation, the Bronco

clocked more than 8,000km over a six month period

under harsh arctic conditions in Finland. It also

surpassed expectations in mobility trials conducted

elsewhere in Europe, Africa, Asia Pacifi c and the US.

As part of its US thrust, ST Kinetics sealed a

Memorandum Of Understanding (MOU) with Lockheed

Martin in February for joint cooperation in the area of

manned and unmanned ground systems.

In September, ST Kinetics joined forces with an industry

partner to propose an integrated maintenance, repair

and overhaul outsourcing solution to the United Arab

Emirates Armed Forces. The result of this international

tender is expected to be known in the fi rst half

of 2005.

On the home front, as the strategic partner to the

Singapore Armed Forces (SAF), ST Kinetics continued

to invest in new technologies to align its capabilities

to the SAF’s vision for a leaner and more potent Third

Generation (3G) Army. There were also continued

contractual deliveries of the Primus Self Propelled

Howitzer, Bronco, SAR 21 Assault Rifl e as well as

other services.

In the commercial business sector, ST Kinetics

achieved milestones in penetrating the Chinese

market. In March, Beijing Zhonghuan Kinetics Heavy

Vehicles (BZK), a 50-50 joint venture (JV) with Beijing

Heavy Duty Truck Plant, commenced operations.

In 2004, BZK produced 120 units of 20 tonne Off-

road Dump Trucks (ODT) and 20 units of 32 tonne

ODTs. It has also produced 10 Bulk Cement Tankers

and expects type approvals for Concrete Mixers by

early 2005.

Following the MOUs, STAR Automotive signed with Sino

Stride Technology (SST) and Pacifi c City International

Holdings (PCI), JV agreements were signed in December

to set up two premier automotive repair and inspection

centres to service the Guangdong, Jiangsu and

Setting the Pace for New Challenges

55

The long term growth prospects for China also highlight the growth potential of its automotive repair and maintenance services sectors.

Defence SectorThe 9/11 attacks, the threat of terrorism and the availability of technology driven weapons and systems had led armed forces to rethink their doctrines on training, equipment and warfare.

Defence forces are investing in new combat capabilities such as: smarter weapons which give mobility and are more lethal and accurate; multi role platforms that can operate in a wider variety of scenarios offering improved payloads without compromising transportability; network-centric systems that give commanders real time battlefi eld information and the capability to direct precision fi repower and other responses.

Industry Review >>

Zhejiang provinces. These will enable ST Kinetics to

export its expertise as a one stop automotive centre to

China. Both JV companies are expected to commence

operations in the second half of 2005, subject to

regulatory approvals.

In December, ST Kinetics divested its stake in its

subsidiary, Solectria, in a share exchange agreement

with Azure Dynamics. A company listed in London and

Toronto, Azure Dynamics complements ST Kinetics’

current capabilities in hybrid electric technologies and

will offer greater leverage in terms of marketing and

product expansion.

To grow its exports, ST Kinetics believes it has to

partner with local operators. Whether for market

access or complementary technologies, it is open to

JV partnerships and acquisitions as part of its growth

strategy. In 2004, ST Kinetics has been actively

identifying and evaluating potential candidates for

acquisitions in the area of specialty vehicles.

Expanding capabilitiesFuture land warfare calls for equipment that is multi

role, adaptable and highly deployable. ST Kinetics has

introduced innovative solutions that incorporate these

features. It unveiled a revolutionary Active Articulation

Vehicle concept using its Bronco as a reference.

Allowing articulated platforms to couple and decouple

quickly into two independent vehicles, this concept

could transform the potential role of conventional

articulated carriers in both the battlefi eld as well as

homeland security situations.

Another design achievement was the dual calibre

Squad Support Weapon (SSW) that combined a semi

automatic 40mm grenade launcher and a personal

defence weapon into a single, light weight handheld

weapon. Conceived for the challenges of military

operations in urban terrain, the SSW is one of the

few handheld weapons developed in the world with a

fi re control system that equips soldiers with a lethal

air bursting capability formerly available only on crew

served weapons.

ST Kinetics also launched the newly designed Spider –

a six seater Light Strike Vehicle (LSV) with a collapsible

roll cage frame to allow the stacking of two vehicles for

more effi cient transportation. The improved prototype

features better speed, mobility, road performance

and higher payloads for a greater variety of

weapon confi gurations.

Land Systems



As a result, military spending on conventional defence products has been reduced. Industry players are therefore required to transform themselves to meet the changing market trends.

Additionally defence budgets have come under scrutiny. The European industry has been hit by defence spending cuts by governments facing budget defi cits. In the US, defence spending has

been maintained, due partly to the country’s continued engagement in Iraq. However, US defence spending will be constrained by its large budget defi cit.

Refl ecting these trends, the defence industry in the industrialised countries is consolidating. The move is towards fewer but bigger and stronger players. This has fuelled changes in the way

>> Industry Review


The threat of terrorism has created urgency for

homeland security solutions. Leveraging on its

experience in ordnance development, ST Kinetics

embarked on R&D for comprehensive solutions in

homeland defence. It is also collaborating with industry

allies to package and market solutions on three fronts:

prevention, protection and response.

A highly customised Threat Containment Vessel that

can withstand up to 5kg of TNT blast capacity was

developed to preserve surrounding vicinities in the

event of explosive threats.

ST Kinetics has also developed a range of homeland

security specialty vehicles. In August, it secured a

Singapore Civil Defence Force contract for HAZMAT

Support Vehicles. These are custom confi gured

logistics vehicles equipped with detection and

monitoring devices to support operational requirements

for the containment of hazardous materials. ST Kinetics

was also contracted in March to supply ambulances to

the Singapore Ministry of Defence.

Winning new customersIn 2004, ST Kinetics’ divisions and subsidiaries

continued to add to their customer base. In Singapore,

STAR Automotive expanded its clientele and secured a

three year fl eet management contract from SMART taxis.

Five new franchisees were introduced this year, bringing

the total number of STAR franchisees to seven. As at

end 2004, it is the appointed Accident Repair Quality

Workshop to 23 insurance companies,

an increase of three over 2003.

STA Inspection secured vehicle inspection contracts for

CityCab taxis and a fl eet of police vehicles in 2004.

It is seeking approval to operate a sixth Independent

Damage Assessment Centre.

Singapore Test Services extended its scope of

accredited services to include the inspection of lifting

devices, fl owmeter calibration and microbiology tests

on Chinese proprietary medicines, pharmaceutical

and health products. It also set up an additional

climatic walk in chamber for reliability testing of

computer peripherals, storage media and wireless

infocomm products.

ST Kinetics will continue to embrace new opportunities

and strengthen core capabilities to stay relevant to its

customers. It will also commit resources to grow its

commercial interests, especially in specialty vehicles.

Innovative designs like the Spider LSV enable effi cient transportation by allowing two vehicles to be stacked.

BZK commenced production of heavy industrial specialty vehicles including ODTs in 2004.

Joint ventures, such as that with PCI, enable ST Kinetics to grow its commercial automotive expertise in China.

57

defence companies operate and participate in major programmes. Defence spending in Singapore, by contrast, has remained consistent with the defence budget maintained at between 4.5% to 5.5% of Gross Domestic Product (GDP).

Source: Singapore Ministry of Finance, various reports

Singapore: Defence Budget as % of GDP

2002

2003

2001

2000

1999 5.2%

4.6%

5.1%

5.2%

5.2%

Together with its US operations, VT Halter Marine, ST Marine secured new contracts and achieved signifi cant milestones during the year, planting it fi rmly in the league of premier shipyards in the world.

Marine



Commercial Newbuilding Boosted by a strong increase in freight rates, the shipbuilding market in 2004 saw many orders for mega container vessels, Liquifi ed Natural Gas (LNG) vessels and Very Large Crude Carriers (VLCC). The corresponding rise in prices of steel and other newbuilding materials saw shipyards operating at lower profi t margins. Competition among the shipyards has also been keen, especially from

the Chinese, Japanese and Korean shipyards. In particular, Chinese shipyards were successful in securing a signifi cant share of newbuilding orders due to the low prices they offer.

In Singapore, with growing world trade and an ageing fl eet, the feeder container and the tanker newbuilding markets will be more buoyant. In addition, legislation for all tankers to be double hull

INDUSTRY REVIEW


Singapore Technologies Marine (ST Marine), the Group’s

marine arm, is a premier shipyard that provides turnkey

shipbuilding, shiprepair and ship conversion services

for a wide range of naval and commercial vessels. It

has a global clientele, spanning Asia, Europe, the

Middle East and the US.

Penetrating new marketsSince its incorporation in October 2002, VT Halter

Marine has been ramping up its operations and has

extended its market reach, securing a variety of new

contracts. The US Defence Security Cooperation

Agency has named VT Halter Marine a prime contractor

for a possible foreign military sale of three Fast Missile

Craft to Egypt. The total value of the sale between the

two governments, if all options are exercised, could

amount to US$565m ($925m).

VT Halter Marine’s capabilities in delivering innovative

shipbuilding solutions were again affi rmed when

it secured a US$85m ($146m) contract, which

includes the cost of owner furnished equipment, to

construct two Articulated Tug Barge (ATB) units for

Vessel Management Services, a subsidiary of

Crowley Maritime.

In November, it secured a US$31m ($51m) contract to

build a double ended passenger/vehicle ferry for the

Nantucket Steamship Authority.

Other contracts signed included one with Lockheed

Martin, valued at US$18m ($31m), for the design and

construction of two Harbour Tugs and a US$5.2m

($9m) contract to build a Stevedoring Crane Barge for

Tide Leasing Company.

VT Halter Marine began the year with the delivery of a

state of the art Offshore Supply Vessel, ‘Seacor Pride’,

to a reputable offshore operator in the US.

Shortly after, VT Halter Marine delivered superstructures

for the retrofi t and upgrade of Island Class Cutters

in February under the US Coast Guard Deepwater

Programme. VT Halter Marine is contributing its

expertise through the Halter-Bollinger joint venture.

For newbuilding projects, the keel was laid for the

National Oceanic and Atmospheric Administration’s

(NOAA) second Fisheries Survey Vessel (FSV). The

FSVs, which VT Halter Marine is currently constructing,

meet the exacting standards of NOAA and are the most

technologically advanced in their class. During the year,

VT Halter Marine also laid the keels for two ATBs for

Vessel Management Services.

2004 also saw several vessels launched at VT Halter

Marine. These included the sea going ferry ‘Caribena’

for the Puerto Rico Port Authority; ‘MG Robert Smalls’,

the second of two Logistic Support Vessels (LSVs)

for the US Army; and ‘Jean Anne’, a Pure Car Truck

Carrier (PCTC) built for Pasha Hawaii Transport Lines.

The latter is the largest vessel to be launched by a

mid sized shipyard in the US and the fi rst car carrier

to be built in the US. Finally, Tide Leasing Company’s

Stevedoring Crane Barge, ‘Columbia 5’ was launched in

the last quarter of 2004.

Spanning the Oceans

59

by 2010 will also present opportunities for local shipyards.

Competition in the US among the mid sized shipyards is also intense. However, there are niches of business opportunities. This includes increasing demand, deriving from the Jones Act*, for tankers and container ships, large Offshore Supply Vessels and Anchor Handling Tug/Supply

vessels, as well as large, fast Ro/Pax vessels for both military and commercial use. New orders, especially for Articulated Tug Barges, are also expected for replacement of ageing vessels and for vessels that comply with the Oil Pollution Act.

* The Jones Act requires that vessels used to transport cargo and passengers between US ports be owned by US citizens, built in US shipyards and manned by US citizen crew.

Industry Review >>

Expanding capabilitiesThe frigate newbuilding programme for the Republic

of Singapore Navy (RSN), which started in 2002, is in

full swing. For this major project, ST Marine upgraded

its facilities to meet the requirements for extensive

scheduling, logistics, technical and project management

expertise. ST Marine staff also rose to the challenge by

creatively redesigning work processes.

This programme gathered pace during the year. In

July, the fi rst locally built frigate, ‘RSS Intrepid’, was

launched by Mrs Lee Hsien Loong, wife of Singapore’s

then Deputy Prime Minister and Minister for Finance.

The successful launch of ‘RSS Intrepid’, the largest

and most sophisticated warship ST Marine has built,

affi rmed ST Marine’s capabilities as a world class naval

shipbuilder and shipyard.

The RSN frigates are signifi cant for the local defence

industry as they will be the most sophisticated addition

to the RSN fl eet. These state of the art warships have

stealth features and advanced combat capabilities to

counter surface, air and underwater threats. They are

also highly automated and technologically advanced,

requiring a crew of only 70.

During the year, ST Marine also held keel laying

ceremonies for Frigate 4 in May and Frigate 5

in November.

Winning new customersIn October, ST Marine was awarded a contract worth

about $20m by the Ministry of Interior, Kuwait, to

design and build a 49m Landing Supply Craft. This is

a multi purpose vessel for both transport and supply

operations and for law enforcement duties in the

Arabian Gulf. It will be designed to carry Roll-on-Roll-

off goods as well as liquid, refrigerated and general

cargoes. This is the second newbuilding contract from

Kuwait’s Ministry of Interior. The fi rst, for two 43m

Landing Supply Craft, was awarded in 1994.

ST Marine successfully won this tender over fi ve

other shipyards which had qualifi ed. This testifi es

to the quality of the earlier Landing Supply Craft it

had delivered.

Marine



Naval NewbuildingOpportunities continue to be available in the naval newbuilding market. In the US, the US Coastguard’s Deepwater programme and the US Navy’s Joint High Speed Vessel (JHSV) programme will spawn shipbuilding opportunities. There is also an emerging demand for specialty products such as research vessels and patrol craft.

ShiprepairCompetition within the shiprepair sector remains keen, especially from Chinese yards which quoted lower steel renewal rates. However, shipyards with the proven capability to provide quality and reliable shiprepair services will have a competitive edge.

>> Industry Review


The shiprepair business continued to grow its customer

base even as it continued its relationships with

prominent players such as Stolt Nielsen, USA; Odfjell,

Norway; Van Oord and Boskalis International, Holland;

and the Belgian company, Dredging International.

New shiprepair customers included Accord Ship

Management, India; Inai Kiara, Malaysia; Star

Management, Japan; Osterreichescher Lloyd Group

as well as Schlussel Reederei, Germany.

ST Marine also completed major assignments such as

the grounding damage repair of the bulk carrier, ‘Ocean

Hope 2’, from MK Shipmanagement of Japan; collision

damage repair of the bulk carrier, ‘Katerina’, from

Eurocarriers, Greece; as well as major steelwork repairs

for the bulk carrier, ‘Emir’, from E-Maritime, Singapore.

The fi rst locally built frigate, ‘RSS Intrepid’ was launched by Mrs Lee Hsien Loong, wife of Singapore’s then Deputy Prime Minister and Minister for Finance.

Keel laying ceremonies for Frigate 4 and Frigate 5 were held at ST Marine during the year.

VT Halter Marine launched ‘Jean Anne’, the fi rst PCTC to be built in the US.

61

The dredger repair market continues to remain soft because of curbs by regional governments on the export of sand for regional reclamation projects.

Human Resource

Nurturing an enterprise instinctAs a globalising entity, ST Engineering is in the very

cauldron of international competition, short product

cycles, rapid technological change and shifts in

customer needs. To stay ahead, the Group must be

focussed and adept, constantly anticipating change and

reinventing itself. At the heart of its ability to achieve

continued success is its people.

The Group recognises its people as its most valuable

asset. It takes pride in investing in them and fostering

a culture where they are empowered and driven by

a passion to excel and be creative. The result is an

environment that embraces innovation, encourages

learning agility and cultivates a cosmopolitan mindset.

Embracing innovationInnovation is celebrated at ST Engineering. The

commitment to innovation springs from the top,

but is embraced across the ranks with management

personally encouraging staff to think different and

take calculated risks, as well as empowering staff

to experiment.

The Group uses many ways to create a hothouse of

innovation and creativity. These range from various

forms of staff development and training, to incentives

that reward innovative thinking and practices, and a

commitment to R&D. On average, each staff member

spends about 15% of his or her time on activities

relating to innovation. These include training, forums,

suggestion schemes and continuous improvement

exercises including EVA, Kaizen and Six Sigma projects.

Each year, the Group introduces about 50 new products

and systems to meet customer needs. As at end 2004,

the Group had been awarded 52 patents with 191

patents fi led.

ST Engineering also has a dedicated business unit,

FusionWorks, chartered to look for emerging and

disruptive technologies around the world. There are, in

addition, Centres of Excellence, which focus on specifi c

technology areas. The gems of ideas and research

produced are then shared groupwide.

The Group applauds its people for their innovative

ideas, recognising the best of these at an annual

award ceremony.

The culture of innovation makes good business sense

too. Savings from staff suggestions were about

$23.8m in 2004.

Promoting learning agilityThe Group recognises that in this era of rapid

technological change and heightened competition, its

people must have the capability to learn quickly to be

effective in fi rst time situations. This is achieved by

encouraging staff to use their learning strengths, test

the unknown, innovate and seek constant feedback.

The Group cultivates a pro-learning culture by

encouraging knowledge sharing among staff to shorten

their learning curve. It gives its people opportunities

to chart their own learning and development paths, and

facilitating learning from courses and other platforms,

creating a focussed and committed workforce.

For its efforts in people development, ST Engineering

received the Partner of the Year (Company) Award

2004 from SPRING Singapore.

“It is better to be approximately right than to be absolutely wrong.” TAN Pheng Hock, President and CEO, ST Engineering.

Teamwork and knowledge sharing shorten the learning curve.

Staff are given opportunities to chart their own learning and development paths.




Shifting to a cosmopolitan mindsetGoing global demands a fl exible and nimble workforce

sensitive to different cultures and work practices, as

well as having the ability to adapt to them.

Developing a cosmopolitan mindset requires a long

term and consistent strategy that includes job rotations,

overseas postings and courses, such as senior executive

programmes for exposure and networking.

Workforce diversity is important for enhancing a

cosmopolitan mindset and is a source of creative ideas

and local operational knowledge. Recognising this, the

Group attracts talents from across the globe

by advocating meritocracy and an EVA-based reward

system. Today, the Group’s diversifi ed workforce is

40% non Singaporean, with over 11 nationalities.

Developing leadership and talentRefl ecting the Group’s vision, goals, core values and

business environment, eight core competencies have

been identifi ed as hallmarks of leadership at ST

Engineering. These are business acumen, speed and

focus, forging partnerships, mastering change, decisive

leadership, organisational teamwork, continuous

innovation and customer intimacy. They serve to

nurture the enterprise instinct in its leadership that is

crucial to its continued success in the global arena.

5% Managerial 627

Job Group

32% Engineering 3,770

16%Corporate function/admin 1,866

47% Technical & others 5,356

26%Degree &

equivalent 3,071

18%Diploma &

equivalent 2,079 27%Trade certificates 3,094

22%GCE ‘O’/‘A’ levels

and equivalent 2,513

7%Secondary level &

lower 862

Educational Qualification

18%American 2,099

3%Others 392

1%British 127

9%Chinese nationals/

Hongkongers 1,035

1%Indian 159

2%Malaysian 193

66%Singaporean/PR 7,614

Nationality

12%Marine 1,436

3%Others 357

20%Land Systems 2,317

23%Electronics 2,635

42%Aerospace 4,874

Sector

63

Workforce Analysis (as at 31 December 2004)

Total: 11,619

Corporate Social Responsibility

His Excellency, President Nathan, received a $500,000 cheque from ST Engineering for President’s Challenge 2004.

Understanding corporate citizenshipST Engineering takes pride in its role as a corporate

citizen. It constantly seeks innovative ways to achieve

mutual benefi ts for itself and society at large.

To further this objective, ST Engineering joined the

Centre of Corporate Social Responsibility (CSR) in

Singapore in 2004.

Giving back to societyThe Group continued with its role as a pioneer

sponsor of investor education programmes of the

Securities Investors Association Singapore (SIAS).

This sponsorship helped SIAS organise seminars and

workshops, educating investors to make more informed

investment decisions. The Group also participated

as a corporate speaker in a SIAS investment seminar

in March.

ST Engineering is a patron of the Arts. It sponsored

monthly concerts under the “Lunchbox Series” at

the Esplanade, Singapore’s premier arts centre. This

is a platform for budding musicians and artistes to

showcase their talents through free lunchtime concerts

for the public. In addition, the Group also sponsored

scholarships under the Yong Siew Toh Conservatory of

Music, National University of Singapore, to help nurture

the next generation of musical talent.

As part of its philanthropic efforts, ST Engineering

supported a number of charities and adopted homes

this year, helping to raise funds in the process.

Over 3,000 ST Engineering staff came together to raise

$500,000 for the President’s Challenge 2004 through

a charity walk-a-jog in August. His Excellency Mr S R

Nathan, President of the Republic of Singapore, graced

the event along with guests from the Moral Home for

the Disabled, St Luke’s Eldercare and Grace Orchard

School.

In addition, the Group had other community activities,

including outings for senior citizens, fund raisers, blood

donation drives and charity collections.

With a global workforce of about 12,000 and businesses in over 60 countries, ST Engineering understands it can make considerable contributions to the communities where it operates.

ST Engineering’s sponsorship helped SIAS organise seminars and workshops, educating investors to make more informed investment decisions.



Along with the rest of the world, the ST Engineering Group was deeply moved by the Asian tsunami devastation on Boxing Day. Pitching in, the Group and its staff raised $200,000 for the Red Cross and provided supplies such as medicine, foodstuff, bottled water and blankets. ST Engineering staff who volunteered for relief efforts were given time off from work. In addition, the Group is exploring ways to lend assistance in the longer term, by way of satellite communications, equipment and vehicles.


Protecting the environmentThe Group understands the impact its operations can

have on the environment.

Its environmental initiatives focussed on fi ve strategic

thrusts:

• conserve resources

• minimise waste

• leverage on environmentally friendly technology

• actively involve its people

• put safety fi rst

Key performance indicators were used to set and track

performance levels and participation in these areas for

the Group’s operations. Green training programmes

were offered to staff, in addition to training for the

ISO 14001 and OHSAS 18001 audits.

To spread environmental awareness outside the

organisation, ST Engineering worked with customers,

suppliers and partners to be environmentally friendly,

sponsoring joint activities to promote the green

movement across the community.

Promoting safety at workAs an engineering company, the Group knows that

occupational safety and health programmes are of

paramount importance. Unsafe work practices can lead

to serious consequences for its business, customers,

employees, partners and the community. Therefore,

safety can never be compromised.

To maintain a consistently high level of workplace

safety, the Group fosters a strong safety culture. This

is inculcated through management led safety initiatives

and benchmarking against best practices, continuous

safety training, education, programmes and healthy

lifestyle activities. The Group also initiated a Behaviour-

Based Safety programme to ensure that its safety

management system is robust in its process, procedures

and execution. This has helped reduce ‘at risk’

behaviour and reinforced a ‘safety fi rst’ mindset.

Given the nature of its industries, the Group can

contribute by sharing its experience on workplace

safety with the community and collaborating with public

institutions to spread the safety message. This is its

next CSR challenge.

To spread environmental awareness outside the organisation, ST Engineering worked with customers, suppliers and partners to be environmentally friendly, sponsoring joint activities to promote the green movement across the community.

65

Staff of Singapore Technologies Marine cleaned up the beach at East Coast Park.

Promoting workplace safety has been identifi ed as the next CSR challenge for the Group.

Singapore Technologies Electronics’ Wellness Committee added a touch of colour and joy to a home for the senior citizens.

Investor Relations

ST Engineering is open and responsive in communicating with investors. This springs from a culture that respects good corporate governance and transparency.



Advocating openness and transparencyThe Group provides timely information to investors

through channels such as SGXNet, press releases and

live webcasts.

Management and Investor Relations (IR) executives are

accessible to investors. They interact with investors

through investor forums, including results briefi ngs,

investor conferences, annual general meetings,

quarterly post results lunches and annual roadshows

(see page 68).

As part of its ongoing efforts to help investors better

understand its operations, ST Engineering hosted fund

managers and analysts to facility visits at its Aerospace

and Electronics sectors. Senior management from

the two sectors gave presentations and chaired Q&A

sessions. These were followed by facility tours.

In 2004 alone, ST Engineering hosted over 100 one on

one investor meetings and conferences. Through such

avenues, management builds long term relationships

with investors.

Investors have come to associate the Group with best

IR practices. It is a trust that the Group cherishes and

does not take for granted.

Providing multiple communications channelsST Engineering recognises the importance of investor

feedback and suggestions for continuous improvement

in its IR policies and disclosure practices. Investors are

welcome to send their feedback to the Group via the

following channels:

• Post feedback online at www.stengg.com/contact/

feedback.aspx

• Complete the Annual Report Survey at the end of

this report

• Post a question during the live quarterly results

webcasts

• E-mail feedback to [email protected]

• Share thoughts at the Annual General Meeting

• Fax feedback to (65) 6720 2293

• Post a feedback letter to:

ST Engineering LtdCorporate Communications

51 Cuppage Road#09-08, StarHub Centre

Singapore 229469

For its efforts, ST Engineering won the fi rst ever SIAS

Transparency Excellence Award in 2003, which it will hold

for three years, after winning the SIAS Golden Circle Award (best in transparency across all

categories) for three consecutive years from 2000 to 2002.


Focussing on shareholder valueBeing an EVA driven organisation, the Group measured

the performance of its management against its ability

to add value by achieving returns above the weighted

average cost of capital. ST Engineering is one of the

fi rst companies in Singapore to report EVA and adopt

it as a key performance measurement, effectively

aligning the interests of its management with that

of shareholders.

In 2004, management has proposed to pay out

12.39 cents per share as dividends to shareholders,

which is equivalent to 100% of full year earnings

(see chart on dividend history). This refl ected the

Group’s commitment to maintain shareholder value.

Achieving a record return on equity of 26.4% in 2004,

ST Engineering will continue to seek opportunities to

enhance shareholder value and reward its shareholders.

ST Engineering’s senior management hosts press and analysts briefi ngs during each quarterly results announcement and broadcasts the event live via webcast.

Senior management of various divisions in the Electronics sector were on hand to brief on their business operations during the visit by fund managers and analysts in October.

Fund managers and analysts got a fi rst hand look at the Aerospace operations in Singapore during their visit in April.

0

5

10

15

20

ST Engineering Dividend History (cents)

Ordinary

Dividend Payout Ratio

Special Total

2004*1997

42% 125% 132% 95% 91% 161% 100% 100%

1.8

6.8

9.3 9.510.8

18.5

11.3 12.39

1998 1999 2000 2001 2002^ 2003

^ Includes one-off special dividend of 3.5 cents per share* Proposed dividend payment

67

WEB FACTS

Did you know?• ST Engineering’s quarterly results

and presentations are available on its website at www.stengg.com/investorelations/webcasts.aspx for downloading, typically within half an hour after they are announced

• ST Engineering’s quarterly results briefi ngs are broadcast live on its website and archived versions are available for viewing, typically within three hours after the event, at www.stengg.com/investorelations/webcasts.aspx

• Investors can register themselves in the ST Engineering mailing list at www.stengg.com/mediacentre/mailinglistsubscribe.aspx where they can choose to receive various news and updates on the Group via e-mail

• There is always an electronic, user friendly version of the past and the latest annual reports available at www.stengg.com/investorelations/annualreports.aspx

• There is an IR calendar at www.stengg.com/investorelations/ircalendar.aspx for the latest updates on IR events, including upcoming results announcement dates

• ST Engineering’s latest stock price performance is charted and can be viewed at www.stengg.com/investorelations/stockperformance.aspx

Investor Relations

Date Event

8 January Webcast of FY2003 results briefi ng

9 January Post results investor lunch

26 February Analysts Tea – Asian Aerospace 2004

5 March Release of Annual Report 2003

6 March SIAS Investment Seminar – Corporate Presentation

31 March Annual and Extraordinary General Meetings

7 April Webcast of 1Q2004 results briefi ng

8 April Post results investor lunch

26 April Fund managers / analysts visit to Singapore Technologies Aerospace

9 July Webcast of 2Q2004 results briefi ng

13 July Post results investor lunch and ST Engineering Corporate Day

13 September CLSA Investor Forum – Hong Kong

8 October Webcast of 3Q2004 results briefi ng

12 October Post results investor lunch

15 October Fund managers / analysts visit to Singapore Technologies Electronics

27 – 29 October US Roadshow

4 November Morgan Stanley Asia Pacifi c Summit – Singapore

INVESTOR RELATIONS CALENDAR 2004

Date * Event

7 January Announcement of FY2004 results

10 January Post results investor lunch

2nd week of April Announcement of 1Q2005 results

7 April Proposed book closure date for dividend entitlement

25 April Proposed payment of fi rst and fi nal tax exempt (one-tier) dividend of 4.0 cents per share and a

special tax exempt (one-tier) dividend of 8.39 cents per share for the year ended 31 December 2004

2nd week of July Announcement of 2Q2005 results

2nd week of October Announcement of 3Q2005 results

* Dates are indicative and subject to change. Please refer to ST Engineering’s website at www.stengg.com under Investor Relations for the latest updates.

FINANCIAL CALENDAR 2005*




ST Engineering share price history

Year 2004 2003 2002 2001 2000

High $2.33 $2.06 $2.56 $2.84 $2.85Low $1.89 $1.47 $1.55 $1.85 $1.84Average* $2.09 $1.83 $1.99 $2.50 $2.44

* Defi ned as the average closing prices of active trading days for the year.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Share price($)

Turnover(million)

0

5

10

15

20

25

30

35

ST Engineering Share Price and Turnover for 2004

Share price Turnover

1.60

1.75

1.90

2.05

2.20

2.35

2.50

Source: Bloomberg

ST Engineering Straits Times Index Source: Bloomberg

ST Engineering Share Price compared to the Straits Times Index January to December 2004

Ex-dividend date for the payment of first andfinal dividend of 11.3 cents per share

Share price ($)

Index

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec1.80

1.90

2.00

2.10

2.20

2.30

2.40

2.50

1,400

1,650

1,900

2,150

2,400

Share price performance

69

ST Engineering received the

inaugural UK Trade & Investment

International Business Award

from HRH Duke of York in

recognition of its investments

in the UK.

ST Aerospace was presented

with Winner of Organisation

(Private Category) during the

Sporting Singapore Inspiration Awards 2004 by the Singapore

Sports Council.

ST Electronics, together with

Chartered Electro-Optics and the

Defence Science & Technology

Agency (DSTA) of Singapore,

was presented with a 2004 US Tech Museum Award (Health

Category) for the Infrared Fever

Screening System.

ST Engineering received the

Partner of the Year (Company) Pinnacle Award for actively

supporting SPRING Singapore’s

many organisational excellence

programmes. It also received

the Partner in Organisational Excellence (Company) Award for Innovation & Quality Circles for its efforts

towards teaming excellence

during SPRING Singapore’s

Organisation Excellence Partners

Acknowledgement 2004.

BUSINESS EXCELLENCE

EMPLOYEE RELATIONS

ST Aerospace, ST Electronics and

ST Marine received Gold Awards

from the Singapore Health

Promotion Board for the Helping Employees Achieve Life-Time Health (HEALTH) Award. ST Kinetics and ST Aerospace’s

subsidiaries – ST Aviation

Services Co (SASCO),

ST Aerospace Engineering

(STA Engineering), ST Aerospace

Engines (STA Engines),

ST Aerospace Systems

(STA Systems) and ST Aerospace

Supplies (STA Supplies)

– received Silver Awards.

INNOVATION

ST Electronics’ subsidiary,

ST Training & Simulation, was

presented with the CIO 100 Honouree 2004 Award by

CIO Magazine for excellence

in strategic enterprise

IT deployment.

ST Electronics’ subsidiary, CET

Technologies, and the Singapore

Land Transport Authority

received the Prestigious Engineering Achievement Award 2004 from the Institution

of Engineers Singapore for

the development of the

i-Transport System.

The Hangzhou Modern City

project, the fi rst intelligent

community project by

ST Electronics (Shanghai),

received the Zhan Tian You Award from the Institute of

Civil Engineering, Ministry of

Construction, People’s Republic

of China, for the outstanding use

of innovation and development

in civil engineering in quality

building projects.

ST Kinetics was awarded the

Singapore Service Class by SPRING Singapore in

recognition of its commendable

level of performance in

service excellence.

Awards and Commendations




ST Marine’s Benoi and Tuas

shipyards were awarded the

Det Norske Veritas (DNV) Loss Control Management Certifi cate

(Level 8).

The ST Engineering Group was

presented with a total of seven

STAR Awards, eight Gold Awards

and seven Silver Awards at

the National Innovation and Quality Circles Convention 2004 by SPRING Singapore

for innovation, teamwork and

business excellence.

ST Aerospace, ST Electronics

and ST Kinetics received SHARE Community Chest Awards (Platinum) from the Community

Chest, while ST Marine received

the Gold Award.

ST Kinetics, together with

DSTA and the Singapore Army,

was given the 2004 Defence Technology Team (Engineering) Award by the Singapore Ministry

of Defence for the development

of the Air Bursting Munition

System.

QUALITY

ST Aerospace’s Engineering

& Development Centre (EDC)

and STA Systems were awarded

AS9100:2001 by DNV for

achieving best practice

in aerospace quality

system requirements.

STA Engineering received the

Safety Improvement Teams Convention (Gold Award) from

the Singapore Ministry

of Manpower.

SOCIAL RESPONSIBILITY

ST Engineering and its subsidiary,

ST Electronics, were presented

with the Friends of the Arts Award and the Associate of the Arts Award, respectively, by the

Singapore National Arts Council.

INVESTOR RELATIONS

ST Engineering was awarded 1st

Runner Up for Best Operating

and Financial Review and a

merit award for Best Annual

Report by the ARA Committee

in the 30th Annual Report Awards Competition (Mainboard

Category) for its Annual

Report 2002.

ST Marine was given the Safety Innovation Team Award (Gold)

by the Association of Singapore

Marine Industry (ASMI) and the

Singapore Ministry of Manpower.

SAFETY

STA Engineering was presented

with the Gold Award in the

National Safety Innovation Team (SIT) Convention 2004

by the Singapore Ministry

of Manpower.

STA Systems and STA Supplies

were presented with the Annual Safety Performance Awards

(Silver) by the Singapore Ministry

of Manpower.

71

Aerospace – Reshaping Total SupportSingapore Technologies Aerospace’s (ST Aerospace) experimental Unmanned Aerial Vehicle (UAV), the Multi-role Autonomous Vehicle (MAV) (left), increases operational effectiveness on the military battleground through missions, such as general surveillance and targeting. A mini Vertical Take-off and Landing (VTOL) UAV, the FanTail (right), is a compact and light weight system ideally suited for urban reconnaissance and airbase defence.

Marine – Innovating Total SolutionsInnovative designs developed inhouse were part of the total solutions Singapore Technologies Marine (ST Marine) displayed at AA2004.

Electronics – Mapping a Secured FutureFocussed on meeting the rising needs in homeland security, Singapore Technologies Electronics (ST Electronics) showcased its latest infrastructure security system – Maritime, Aviation and Port Security (MAPS) Solution, which seamlessly integrates decision support systems.

Land Systems – Creating New SolutionsSingapore Technologies Kinetics’ (ST Kinetics) Spider Light Strike Vehicle, a fast and highly mobile vehicle, offers excellent performance in diverse terrain as well as an outstanding payload to accommodate a wide variety of weapons.

Participating for the 12th time, ST Engineering once again took centrestage in Asia’s largest airshow in 2004. Commanding 2,500sqm of exhibition space, the ST Engineering pavilion served as a gateway to Asian Aerospace 2004 (AA2004), welcoming every visitor from near and far.

ST Engineering’s theme was “Your Partner in Transformation”, illustrating its value proposition of integrating different strengths across its business sectors into powerful, precise solutions.

On display were the latest array of homegrown technologies, systems and products. These ranged from smart munitions, unmanned systems, homeland security systems to various network-centric solutions.

With more than 750 exhibitors from 37 nations, AA2004 attracted over 26,000 dignitaries, trade visitors and key industry players from over 80 countries.

The six day airshow, from 24 to 29 February, also attracted visits from many high profi le guests. They included President S R Nathan, then Prime Minister Goh Chok Tong, Deputy Prime Minister and Coordinating Minister for Security and Defence Dr Tony Tan, Minister for Defence Teo Chee Hean, King Abdullah II of Jordan and the Sultan of Johor.

The biennial event has grown to be the world’s second largest airshow with an estimated record of US$3.5b worth of trade deals signed in 2004.

ST Engineering dazzles @ Asian Aerospace 2004

New products launched during AA2004




Crowds gathered outside the main pavilion to watch the breathtaking aerial performance.

Mr Teo, Minister for Defence (far right), being briefed on the latest ship designs from ST Marine.Mr Goh, then Prime Minister, was introduced to ST Aerospace’s FanTail, a mini VTOL UAV for urban reconnaissance and airbase defence.

King Abdullah (centre) examined the Squad Support Weapon, ST Kinetics’ latest dual calibre weapon with a fi re control system.

President Nathan (far right) observed various sensor and communications equipment, components of ST Electronics’ MAPS Solution.

73

ST Engineering’s US acquisitions in recent years, namely Miltope, VT Halter Marine and San Antonio Aerospace have all shown improved performance. Signifi cantly, the latter turned profi table and VT Halter Marine made substantial progress towards breakeven in 2004. Despite increased competitive pressures, the Group achieved improved performance in 2004 with turnover and profi ts at their highest levels since its formation in 1997.



GROUP OVERVIEW

GROUP’S VISION, MISSION & STRATEGIES

ST Engineering was formed in December 1997

through the merger of four public listed companies,

Singapore Technologies Aerospace (ST Aerospace),

Singapore Technologies Electronics (ST Electronics),

Singapore Technologies Automotive (ST Automotive)

and Singapore Technologies Marine (ST Marine), within

the then Singapore Technologies Group. The merger

created an integrated defence and engineering group

with a comprehensive suite of capabilities and products

to meet the needs of global customers.

In early 2000, the Group acquired the Chartered

Industries of Singapore group of companies, which was

then largely in the production of munitions and defence

ordnance, and merged it with ST Automotive to form

Singapore Technologies Kinetics (ST Kinetics).

Headquartered in Singapore, ST Engineering today

has a staff strength of about 12,000, most of whom

are located in Singapore and the US. It has also

established a strong presence in various parts of the

world, offering a comprehensive range of services and

products through its four sectors, namely Aerospace,

Electronics, Land Systems and Marine.

Vision and MissionST Engineering’s vision is to be a global defence and

engineering group. Its mission is to bring value to its

customers and partners by delivering total integrated

quality solutions and support.

StrategiesTo achieve its vision and mission, the Group focusses

on four areas: develop its strategic capabilities, build

global networks, strengthen business partnerships and

attain business excellence. These in turn provide the

impetus for its customer centric business processes,

strong design capabilities, quality workmanship and

competitive edge through innovation, pricing and

continual improvements.

Performance measuresTo measure its progress and achievements towards

realising its vision and mission, the Group has both

short and long term performance targets for its

four focus areas. These include the number of new

products/services and capabilities introduced, the

number of new investments, R&D expenditure, sales

and profi ts growth, return on equity and EVA.

Operating Financial Review


SECTOR OVERVIEW

AEROSPACE SECTOR

The Group’s aerospace arm is ST Aerospace. Since its

beginnings in 1975 as a maintenance depot to the

Republic of Singapore Air Force (RSAF), ST Aerospace

has become a leading global third party provider of

Maintenance, Repair and Overhaul (MRO) services for

a wide range of military and commercial aircraft. It

was ranked the world’s largest third party commercial

airframe MRO service provider (based on manhours for

heavy airframe maintenance alone) in the latest biennial

survey in March 2003 by the magazine, Overhaul and

Maintenance.

Headquartered in Singapore, ST Aerospace has global

operations and a worldwide customer base. These

customers include seven of the world’s 11 largest

airlines, three major freight forwarders and many of

the world’s leading air forces. ST Aerospace has also

enhanced its standing in the Low Cost Carrier (LCC)

market. Its LCC clients include Valuair, AirAsia and

Jetstar Asia.

Quality and safety are essential values in the aviation

industry, and all ST Aerospace’s operations conform

to the exacting standards of its quality system. The

ST Aerospace quality system is audited and approved

by major airworthiness authorities such as the Civil

Aviation Authority of Singapore, the US Federal

Aviation Administration, the European Joint Aviation

Authority, the Japan Civil Aviation Bureau and the UK

Civil Aviation Authority.

ST Aerospace’s major facilities are located at Changi,

Paya Lebar and Seletar airports, Singapore; Mobile and

San Antonio, USA; and Bournemouth and Stansted,

UK. A new capability for commercial airframe MRO was

added in an exciting growth market in 2004 through

the start up of Shanghai Technologies Aerospace

Company (STARCO) in Shanghai, China. STARCO is a

Joint Venture (JV) with China Eastern Airlines (CEA).

ST Aerospace has three business groups: Aircraft

Maintenance & Modifi cation (AMM), Component/

Engine Repair & Overhaul (CERO), and Engineering

& Materials Services (EMS). With the capabilities of

these business groups, ST Aerospace offers Total

Aviation Support (TAS) covering airframe, engines and

components, and material and engineering services to

customers worldwide.

Aircraft Maintenance & Modifi cationThe AMM business group has, since 2003,

strengthened its repair capabilities for the complete

spectrum of narrow and wide-body Airbus, Boeing and

McDonnell Douglas aircraft types including the latest

additions on the A330, A340 and B777 capabilities.

For military aircraft, apart from its strong and broad

based capability for many helicopters and military

aircraft, ST Aerospace extended its capabilities to the

F-16 fi ghter aircraft and the Chinook helicopter. These

included airframe as well as engines and components

repair and overhaul capabilities.

In 2004, in response to customer demands, the sector

added three new hangars, costing about US$20m

($33m), at ST Mobile Aerospace Engineering (MAE)

in the US and ST Aviation Services Co (SASCO) in

Singapore. It also undertook to build two more narrow-

body slots at its Seletar facility for ST Aerospace

Engineering (STA Engineering). These are expected to

be ready in early 2005. At the same time, a two wide-

body aircraft hangar in STARCO at Pudong Airport is

being planned to complement the current two-hangar

Hongqiao facility.

Component/Engine Repair & OverhaulInvestments in engines and components assets (for the

support of the B737CG and B737NG as well as the

A319/320/321 aircraft) and MRO continued unabated.

On engine support, ST Aerospace further developed

capabilities for the B737CG, B737NG and the F-16.

Service centre agreements were renewed with Rolls

Royce for the repair and overhaul of the T56/501D



engines while new service centre status was granted

by Honeywell for the repair and overhaul of its

T55 engines.

On non engine components, the CERO group enhanced

its range of capabilities for the B777, B767, B757,

B737CG, B737NG, A320, A300/310 and the MD-11

commercial aviation components, as well as added

new capabilities for the F-16 and Chinook military

components. ST Aerospace received additional

authorisation from Original Equipment Manufacturers

(OEMs), including Howell Instruments for the repair

and overhaul of all its products in South East Asia, and

Sargent Controls & Aerospace for its hydraulic valves

in Asia. Notable service centre renewals included an

agreement with Eurocopter for the SA-330, AS-332

and AS-550 helicopters in Asia.

Engineering & Materials ServicesST Aerospace continued to build upon its engineering

expertise. In the engineering and development arena,

the sector’s engineering capabilities added value to

customers through Maintainability and Reliability

Engineering (MRE) studies to improve the performance

of their fl eet cost effi ciency. These MRE initiatives

did not remain as studies but were translated into

enhancement programmes for customers.

ST Aerospace has also extensively applied its Aircraft

Maintenance and Engineering System (AMOS) to

support the maintenance planning needs of its

customers on TAS programmes. The software performs

maintenance planning and reliability calculations while

tracking components/rotables and aircraft scheduling.

Armed with updated information, AMOS is able to keep

customers informed, from anywhere and at any time,

about the progress of their maintenance programmes

in an accurate and effective manner.

ELECTRONICS SECTOR ST Electronics, the electronics arm of ST Engineering,

is a leading electronics and Information &

Communications Technology (ICT) system house in the

region. It is headquartered in Singapore with offi ces in

Australia, China, Hong Kong, Malaysia, Mexico, Taiwan

and the US. It markets to over 60 countries.

ST Electronics specialises in the design, development

and integration of purpose-built electronics and

ICT systems, such as broadband RF and microwave

communications, intelligent rail and traffi c management

including fl eet management and telematics solutions,

real time command and control, training and simulation,

intelligent building management, information security

and m-commerce solutions.

ST Electronics prides itself in delivering innovative

system solutions to defence, commercial and industrial

customers worldwide. Its commercial customers

include rail operators such as the Singapore Mass

Rapid Transit, the Taiwan Department of Rapid Transit

System, the Manila Light Rail Transit Authority and

the Guang Zhou Metro Corporation; transportation

authorities such as the Land Transport Authority (LTA)

and Suzhou City (China) Public Security Bureau; and

public safety agencies and network operators/system

integrators worldwide.

ST Electronics’ main offi ces are located at Ang Mo

Kio and Jurong East in Singapore; Perth in Australia;

Beijing, Chengdu, Shanghai, Guangzhou and Shenzhen

in China; Hong Kong; Kuala Lumpur in Malaysia;

Monterrey in Mexico; Taipei in Taiwan and Bangkok

in Thailand.

ST Electronics has three business groups, namely

Large-Scale Systems Group (LSG), Communication &

Sensor Systems Group (CSG) and Software Systems

Group (SSG).



Large-Scale Systems GroupLSG is recognised as a leading regional rail electronics

systems provider. Besides Singapore, it has provided

rail system solutions in China, the Philippines and

Taiwan. LSG’s rail solutions include automatic fare

collection and communications systems and electronics

systems. These include supervisory control and data

acquisition, security and access control, platform

screen doors, passenger information, maintenance

management, signalling and management

information systems.

As LSG’s projects are infrastructural in nature, a range

of capabilities, strong local partnerships and ability

to secure project fi nancing are critical success factors

to winning projects. LSG’s strong track record and

network of partners built over the years put it in an

advantageous position as the industry moves towards

private public partnerships.

Communication & Sensor Systems GroupCSG is made up of two main business units, Agilis

Communication Technologies (Agilis) and CET

Technologies (CET).

Agilis, a leading supplier of Very Small Aperture

Terminals (VSAT) and other satellite communications

and network solutions, currently sells to customers

in nearly 60 countries. New countries added in

2004 were Austria, Bangladesh, Columbia, Fiji,

Hungary, Lithuania, New Zealand and Romania. Agilis

continues to expand its capabilities and range of

wireless communication products and solutions by

launching new products including a Coastal and

Mobile Surveillance System and an enhanced Network

Management System.

Expanding and converging its expertise in wireless

communications and fl eet management capabilities,

CET has added to its suite of solutions a Telematics

System. By integrating General Packet Radio Service

(GPRS), Bluetooth and Global Positioning System (GPS),

telematics equip vehicles with wireless communications

and computing capabilities. Users can obtain

information and services on the go including access

to the Internet and various emergency services. Having

equipped more than 20,000 vehicles for fl eet owners

worldwide with its advanced Fleet Management

Systems, CET has strengthened its position as a

leading communications solution house.

Software Systems Group SSG comprises two main business units, SES Systems

(SES) and ST Training & Simulation (STTS). SES

successfully penetrated new markets after securing

an Air Traffi c Control Aerodrome Visual Simulator

project in India and contracts to provide e-Government

solutions to government agencies in Botswana. It also

acquired a stake in ECS Holdings (ECS), a public listed

company in Singapore. This enables SES to leverage on

ECS’ extensive channel coverage and business networks

in the region, particularly China and extend the reach

of its IT Infrastructure product and solution offerings.

SES is the lead business unit within ST Electronics for

public safety. It spearheads the sector’s integrated

electronics and software systems offering for homeland

security and public safety purposes. The range of

homeland security solutions includes border security,

maritime security, key installation protection systems

and track and trace solutions.

STTS continued to build on its expertise in crucial

training methodologies, subject matter expertise and

underlying computer and visual graphic technologies

to create innovative and value added training and

simulation systems. New products launched included

the Unmanned Aerial Vehicle Trainer and the Advanced

Combat Emulator.



ST Education and Training, a subsidiary of STTS, is

gaining a reputation as a qualifi ed maritime security

consultant. It is approved by Panama as a Recognised

Security Organisation to help ports and carriers meet

the International Ship and Port Facility Security Code.

LAND SYSTEMS SECTOR

ST Kinetics, the Group’s land systems arm, was formed

in 2000 when Chartered Industries of Singapore

was acquired and merged with ST Automotive. The

acquisition created a larger and more comprehensive

land systems group. ST Kinetics’ headquarters and

major facilities are in Singapore.

ST Kinetics’ defence business capabilities include

integrated platform and weapon systems design

and engineering, manufacturing, system integration,

upgrading, MRO and other lifecycle management

services. In the commercial arena, ST Kinetics provides

automotive and laboratory services and is currently

developing and expanding its capabilities into smart

vehicle subsystems and commercial specialty vehicles.

The company had its roots in the conventional defence

business. However, in the last few years, ST Kinetics

has repositioned itself to focus on technologies

of the future, with emphasis on smarter, network-

centric solutions to meet the needs of modern armed

forces. Concurrently, it has also been actively growing

its commercial vehicle business, leveraging on its

core automotive and vehicular competencies. While

operations are mainly based in Singapore, it also has

automotive businesses in China, Ireland and North

America via subsidiaries and associated companies.

ST Kinetics has two business divisions: Defence

Business and Commercial Business.

Defence BusinessThe Defence Business division continues to support the

Singapore Armed Forces (SAF) in their quest for new

technologies and operating concepts for a leaner and

more potent Third Generation (3G) Army. Leveraging

on its experience and technical know how on explosives

and survivability solutions against armaments, the

division has also embarked on homeland security

initiatives in 2004.

In exports, the Defence Business division continues to

secure recurring sales in existing markets as well as

open new markets. It is establishing its presence in

the global market through major international defence

exhibitions and is actively participating in major

vehicle programmes for potential customers worldwide.

The contract by Finland, awarded in July to conduct

a feasibility study for a Future All Terrain Vehicle

programme, is an endorsement of ST Kinetics’ technical

competence in the global defence market.

Commercial BusinessThe Commercial Business division has been growing

its local automotive services and venturing into the

commercial vehicles market overseas. STAR Automotive

Centre (STAR) has successfully established a franchise

scheme in Singapore and has signed JV agreements

to set up one stop premier automotive centres with

Chinese partners in Hangzhou and Guangzhou, subject

to regulatory approvals. Beijing Zhonghuan Kinetics

Heavy Vehicles Co (BZK), the 50-50 JV company in

China, started operations in March and has been

producing a range of vehicles for the construction

industry. The Commercial Business division is

constantly looking for opportunities to venture further

overseas and to be a signifi cant contributor to the

sector’s total revenue in the longer term.

MARINE SECTOR

ST Marine is the marine arm of the Group and is

headquartered in Singapore. It specialises in the

design, construction, maintenance, repair, upgrading

and life extension of naval and commercial vessels.

Together with its US operations, VT Halter Marine,

ST Marine has a global clientele that spans Asia,

Europe, Middle East and the US.



ShipbuildingST Marine’s local facilities provide turnkey shipbuilding

solutions for a wide range of naval and commercial

vessels from concept defi nition, detailed design,

construction, onboard system installation and

integration, to testing and commissioning.

With its strong design capabilities, supported by the

latest in 3D Computer Aided Design systems and

technologies, ST Marine takes pride in delivering

innovative, customised shipbuilding solutions to its

international clientele.

ST Marine is currently building fi ve frigates for the

Republic of Singapore Navy (RSN). These state of the

art warships are the largest and most sophisticated

naval vessels ST Marine has built.

ST Marine has designed and constructed commercial

vessels such as Feeder Container Vessels, RoRo/LoLo

vessels and High Speed Passenger Catamaran. Its most

recent commercial project was the construction of three

sophisticated Platform Supply Vessels.

ST Marine’s US operations, VT Halter Marine, based in

Pascagoula, Mississippi, is a leader in the design and

construction of medium sized ships in the US. It is

currently constructing two technologically advanced

Fisheries Survey Vessels (FSV) for the National Oceanic

and Atmospheric Administration (NOAA) as well as two

Logistic Support Vessels (LSVs) for the US Army.

In the commercial sector, VT Halter Marine’s track

record includes the construction of an Offshore Supply

Vessel. Current commercial newbuilding projects

at VT Halter Marine include the construction of a

Stevedoring Crane Barge, Passenger Ferry, Harbour

Tugs, Articulated Tug Barge units and a Pure Car

Truck Carrier (PCTC) – the fi rst such carrier to be

built in the US.

With its strong design capabilities, backed by its

sterling track record, the Marine sector is well placed

to offer innovative, customised solutions to meet the

demands of its customers’ operations.

ShiprepairST Marine is reputed for providing quality shiprepair

services at competitive rates and fast turnaround time.

Its proven track record extends from jumboisation

and ship conversion to upgrading and retrofi tting of

commercial vessels. These vessels include bulk carriers

and tankers, RoRo vessels, dredgers, seismic vessels,

offshore supply vessels and cruise liners.

ST Marine also provides shiprepair services to naval

vessels. These services include damage repairs,

docking and specialised services for high speed

diesel engines and midlife refi ts. ST Marine also refi ts

submarines for the RSN.

Supported by comprehensive facilities which cover a

total of 18.8 hectares, ST Marine has the capability to

service vessels up to 70,000dwt panamax sized vessels

as well as warships up to frigate size.

The Group’s turnover for the second half of 2004

increased by 15% or $204m compared to the

fi rst half. All sectors reported higher turnover in

the second half vis-à-vis the fi rst half. For the

Aerospace sector, the higher turnover came from

higher sales in SASCO and San Antonio Aerospace

(SAA), as well as higher engines sales and higher

project milestone completions. For the Electronics

sector, the higher turnover was mainly contributed

by milestone completions of the LTA Circle Line

project and a command and control systems

project. For the Land Systems sector, the

higher turnover was mainly due to the delivery

of Primus and higher munitions sales, but these

were partially offset by lower delivery of other

weapon programmes. For the Marine sector,

the higher turnover was attributable to local

shipbuilding operation.

The Group’s net Profi t Before Tax (PBT) for the

second half of 2004 increased by 23% or $46.5m

over the fi rst half due mainly to the higher turnover

in the Aerospace, Electronics and Marine sectors,

as well as lower operating expenses, mainly in the

Aerospace and Electronics sectors.

(b) Full Year Performance Turnover Compared to the previous year, FY2004 turnover of

the Group increased by 5% or $129m to $2,948m.

All sectors except the Land Systems sector recorded

higher turnover in FY2004 over FY2003. The

increase under “Others” was due to the inclusion

of turnover from Miltope of $112m. Miltope,

located in US, was acquired by the Group in

December 2003.

20032004

Half Yearly Profit Before Tax

0

50

100

150

200

250

300

1st half

2st half

$ m 215.2

202.0

248.4

197.5

Half Yearly Turnover

1st half

$ m

2st half

1,3

82

1,3

72

1,5

76

1,4

37

20032004

0

250

500

750

1,000

1,250

1,500

1,750

PERFORMANCE OF THE PERIOD (a) Half Yearly Performance

In $ m Except Per Share Amounts 2004 2003

1H 2H Full Year 1H 2H Full Year

Turnover 1,372 1,576 2,948 1,382 1,437 2,819

EBITDA 190.6 228.9 419.5 217.0 191.0 408.0

EBIT 148.5 192.5 341.0 172.8 145.6 318.4

Profi t before tax 202.0 248.4 450.4 215.2 197.5 412.7

Profi t after tax after minority interest 155.7 202.7 358.4 164.2 161.4 325.6

Basic earnings per share (cents) before extraordinary items 5.4 7.0 12.4 5.7 5.6 11.3

Net assets value per share (cents) 40.2 47.0 47.0 40.4 45.9 45.9



OPERATING REVIEW



Aerospace sector Compared to FY2003, the Aerospace sector’s

FY2004 turnover increased by 2% or $26m to

$1,118m. The increase in turnover largely came

from the AMM business group, due to higher

redeliveries in SASCO and SAA, but these were

partially offset by lower sales in MAE.

Electronics sector FY2004 turnover of $626m for the Electronics

sector increased by 2% or $12m over that of

FY2003. Both LSG and SSG registered higher

turnover, but these were partially offset by lower

turnover from CSG. The increase in SSG’s turnover

was mainly attributable to milestone completions

of a command and control systems project, a ship

console project and simulator projects, while the

milestone completions of the LTA’s Circle Line

project and the supply of Multi-channel Multipoint

Distribution System (MMDS) product to Mexico

accounted for the higher turnover in LSG. For CSG,

the lower turnover was the result of lower delivery

of communications equipment.

Land Systems sector Land Systems sector’s FY2004 turnover of $591m

was lower than FY2003 by 18% or $126m. All

three business groups recorded lower turnover in

the current year compared to the previous year. The

lower turnover of the Automotive (Auto) business

group was mainly due to the completion of an

engineering development project and an armoured

vehicle upgrading programme in 2003, while

the lower delivery of Primus and other weapon

programmes, partially offset by higher munitions

sales, accounted for the lower turnover of the

Munitions & Weapon (M&W) business group. For

the Services, Trading and Others (S&T) business

group, lower engine sales led to the lower turnover.

Marine sector FY2004 turnover of $484m for the Marine sector

increased by 25% or $97m compared to FY2003.

All three business groups contributed to the higher

turnover for FY2004. The increase in Shipbuilding

turnover was largely due to higher activities, while

the increase in Shiprepair turnover was attributable

to a more active shiprepair market.

Profi t Group PBT for FY2004 of $450.4m was higher

than that achieved in FY2003 by 9% or $37.7m.

All sectors except the Land Systems sector recorded

higher PBT.

Aerospace sector Compared to FY2003, FY2004 PBT of the

Aerospace sector of $236.6m was higher by 5% or

$11.4m. The higher PBT was largely contributed

by the EMS business group, but this was partially

offset by lower PBT of the AMM and CERO business

groups. The higher PBT of the EMS business

group came from higher investment income and

contribution from the biennial Asian Aerospace

2004 exhibition. Unfavourable sales mix accounted

for the lower PBT in the CERO business group.

Although turnover in the AMM business group

increased, the margin dropped due to the lower

utilisation of the facilities at MAE in FY2004 arising

from the deferral of aircraft maintenance schedules

by a major customer.

Electronics sector PBT of the Electronics sector in FY2004 of $65.7m

was higher than that of FY2003 by 7% or $4.3m.

The higher PBT was contributed by LSG and SSG.

... FY2004 Turnover By Sector

16%Marine 38%

Aerospace

21%Electronics

20%Land Systems

5%Others

81

SSG recorded higher PBT due to higher turnover,

while higher turnover and better operational

effi ciency accounted for the higher PBT of LSG.

Land Systems sector Land Systems sector’s FY2004 PBT of $72.6m

was 25% or $23.8m lower than that achieved in

FY2003. Lower PBT was largely contributed by the

Auto and M&W business groups. The lower PBT of

the Auto business group was attributable mainly to

lower contribution from lower turnover and weaker

product mix as well as provision for impairment in

value of a long term investment, but these were

partially offset by lower operating expenses and

the absence of amortisation of goodwill. The lower

PBT of the M&W business group was impacted by

lower turnover and weaker product mix as well as

the absence of writeback of provision for liquidated

damages, which aided profi ts for FY2003, but these

were partially offset by lower operating expenses.

Marine sector PBT of the Marine sector in FY2004 of $70.1m

increased signifi cantly by 99% or $34.9m compared

to FY2003. The increase largely came from

Shipbuilding and Shiprepair, but this was partially

offset by lower investment income. The higher PBT

recorded by Shipbuilding was in line with the higher

turnover achieved, while the higher Shiprepair PBT

was due to higher turnover and better margins.

(c) Earnings Per Share (EPS) The Group’s basic and diluted EPS for FY2004 were

12.40 cents and 12.36 cents respectively (FY2003:

11.29 cents and 11.27 cents respectively). The

higher EPS was a result of higher profi t after tax

for FY2004.

(d) Economic Value Added (EVA) The Group’s EVA for FY2004 was $238.7m, a

decrease of $2.2m or 1% over FY2003. The

Weighted Average Cost of Capital (WACC) was

7.4% for 2004 (2003: 6.5%).

... FY2004 Profit Before Tax By Sector

16%Land Systems

1%Others

52%Aerospace

15%Electronics

16%Marine

8

9

10

11

12

13

14

... Earnings Per Share

cents

20042003200220012000

10.12

12.4011.9211.47 11.29

%

FY2004 EVA Contribution By Sector

Marine OthersLandSystems

ElectronicsAerospace

58

1915 14

(6)

-10

0

10

20

30

40

50

60





(e) Capital Expenditure The Group incurred capital expenditure of $84m

in FY2004. The purchase of new hangars and

related equipment, and rotables by the Aerospace

sector as well as the acquisition of a new building

by the Electronics sector contributed to the bulk of

the capital expenditure for the year. The details are

shown in note 8 to the fi nancial statements.

(f) Total Assets As at end December 2004, total assets of the

Group amounted to $4.06b compared to $4.12b as

at end December 2003. The deployment of assets

is as follows:

(g) Major Acquisitions Aerospace sector STARCO set up a commercial aircraft repair facility

in Shanghai, China, and was granted a business

licence by the Shanghai’s State Administration for

Industry and Commerce to commence operations

in January 2005. ST Aerospace’s planned share of

investment was US$35.8m, of which US$5.37m has

been invested.

In May, ST Aerospace increased its equity stake in

Bournemouth Aviation Services Company (BASCO)

from 60% to 81%, reinforcing ST Aerospace’s

commitment to serve the European aviation market.

In December, ST Aerospace acquired Singapore

Technologies Pte Ltd’s 50% shareholding in

ST Aviation Resources (STAR), making STAR a

wholly-owned subsidiary.

Electronics sector In January, ST Electronics increased its stake in Sino

Stride Technology (Holdings) (SST) from 9.96% to

19.92% through the exercise of an equity option

for HK$28.5m ($6.3m). SST has a leading market

position in Zhejiang province, China, in intelligent

building systems integration. The increase in

ST Electronics’ equity stake underlined a growing

partnership in the area of infrastructure projects

in Chinese cities.

$ m

Capital Expenditure

2004 2003

Aerospace Electronics

Others

Land Systems

Marine

0

10

20

30

40

50

60

70

80

90

100

$84m

$62m

... FY2003 Deployment Of Assets

5%Funds under Management

21%Bank Balance &

Other Liquid Funds

6%Associated Companies

& Investments

1%Intangible

Assets

2%Deferred Tax Assets

16%Stocks & WIP

10%Fixed Assets

1%Others

38%Debtors, Deposits

& Prepayments

... FY2004 Deployment Of Assets

6%Funds under Management

14%Bank Balance &

Other Liquid Funds8%

Associated Companies& Investments

1%Intangible

Assets

2%Deferred Tax Assets

17%Stocks & WIP

10%Fixed Assets

1%Others

41%Debtors, Deposits

& Prepayments

83

In February, ST Electronics (Shanghai) invested

RMB2.55m in a newly incorporated company,

ST Electronics-PCI, for a 51% equity stake. This tie

up with Pacifi c City International Holdings (PCI) and

Guangzhou PCI is to help ST Electronics (Shanghai)

develop and grow its business in South China.

In March, iTS Technologies, a wholly owned

subsidiary of STTS, took up a 51% equity stake

in a newly incorporated company, Prescient

Systems & Technologies (Prescient). The total

investment in Prescient was $3.8m. The investment

in Prescient is to help accelerate ST Electronics’

entry in the international market for new training

instrumentation systems.

To further extend its software development

capabilities, SES acquired a 21.35% equity

stake in ECS for a cash consideration of $24.8m

in September. This investment will allow SES

to augment its end to end mission critical IT

infrastructure solutions. It will also enhance SES’

marketing network in Asia through ECS’ regional

distribution channels.

In November, SES also set up a wholly owned

subsidiary, Xinke Information Systems (Xinke), in

Shenzhen, China. This was to tap into the abundant

competitive talent pool in China to support

its software work and to provide public safety

solutions to Shenzhen and Guangzhou. Xinke

will be SES’ platform to capitalise on the growth

potential in the global outsourcing business and

tap the business opportunities in China’s public

safety market.

(h) Major Projects Aerospace sector Despite the aviation downturn over the last few

years, ST Aerospace has a robust order book that

includes PTF aircraft conversions, maintenance work

and development activities. Also, with almost three

decades of support to the RSAF, ST Aerospace

is its strategic partner and has been meeting its

exacting requirements and demand for leading

edge technologies.

External major military projects embarked in

2004 included the US Pacifi c Airforce C-130

programme for depot maintenance work; the

acquisition and refurbishment of UH-1H helicopters

for the Philippines Air Force; and a fl eetwide

avionics standardisation programme for one of

its customers. ST Aerospace has also launched

new products, especially in the Unmanned Aerial

Vehicles (UAV) arena. This included the launch of

its Fantail (rotary wing) and Skyblade II UAVs for

surveillance activities.

In 2004, the engineering and development arm of

ST Aerospace fi led six patents.

For commercial aviation work, ST Aerospace

continued to work closely with its blue chip

customers such as FedEx Express, Japan Airlines,

Northwest Airlines, All Nippon Airways, United

Parcel Service (UPS) and United Airlines. New

customers, both large and small, continued to be

added. This further positions the company as a

global service provider.

In the engineering and modifi cation segment,

the sector continued to undertake more PTF

modifi cations and design and development

programmes. On PTF conversions, ST Aerospace

has started development on variants of the

B757 PTF including a 15 pallet confi guration and

marketing its 141/2 pallet confi guration on an

approved Boeing Supplemental Type Certifi cate

(STC). More MD-11 conversions were performed

in 2004 and in addition to UPS, customers such

as CEA, EVA Airlines and Lufthansa Cargo have

been added.





In the LCC market, ST Aerospace’s Maintenance By

the Hour (MBH™) and TAS programmes continued

to attract new customers. In addition to AirAsia

and Valuair, Jetstar Asia became the latest customer

for a TAS programme. This was to support its

fl eet of A320s, scheduled to reach eight by 2005.

The contract, worth about US$47m ($77m) over

fi ve years, covers line, light and base maintenance

and engineering and technical services, as well as

components management and support.

In 2004, AirAsia also extended ST Aerospace’s

engines MBH™ support to its fl eet of B737 aircraft.

The contract, worth US$63.5m ($104m), is for

services for 10 of AirAsia’s aircraft powered by

CFM56-3 engines.

The Engines business continued to fi rmly establish

its position as a MRO and MBH™ provider for the

military aviation market as well as the CFM56 and

JT8 market. ST Aerospace continued to invest in

components repair and overhaul capabilities to

support military and commercial customers globally.

These engines and components capabilities also

add an important dimension to the sector’s MBH™

and MRO programmes by assuring good turnaround

time and responsive support to customers with

the same exacting standards of quality and service

which they have come to expect.

Electronics sector Major orders secured during the year include

the Automotive Telematics System in Thailand

($163m), the Taipei MRT/MCT Communications

Systems project ($61.4m), the Mexico Multi-channel

Multipoint Distribution System (MMDS) access

control downconverters contracts ($17m), and the

Guangzhou MRT Automated Fare Collection system

project ($15m).

The major projects contributing to the full year

turnover included the LTA’s and Manila’s Light Rail

Transit Authority’s LRT/MRT projects; the Hong

Kong Fire Services project; simulator projects;

a Command and Control System project; the

supply of MMDS and the delivery of radio

communications equipment.

Land Systems sector 2004 saw the contractual delivery of major projects

such as the Bronco All Terrain Tracked Carrier, SAR

21 Assault Rifl e and Primus 155mm Self Propelled

Howitzer and munitions products to the SAF.

In February, a Memorandum Of Understanding

(MOU) was signed with Lockheed Martin for joint

cooperation in the design, development and

production of manned and unmanned

ground systems.

Overseas, the Bronco continued to undergo

rigorous evaluation trials by potential customers

in Africa and Europe as well as in a NATO country.

In July, a contract was awarded by Finland to

conduct a feasibility study for its Future All Terrain

Vehicle programme.

In December, ST Kinetics entered into two JV

agreements for STAR to set up premier automotive

centres in Guangzhou and Hangzhou, subject to

regulatory approvals. This follows the signing of

two MOUs in June. The two centres will service the

provinces of Guangdong, Jiangsu and Zhejiang.

In December, ST Kinetics also divested its 50.8%

stake in its subsidiary, Solectria, in a share exchange

agreement for approximately 10% of the common

shares of Azure Dynamics. This will expand

ST Kinetics’ capabilities and product offerings

in the area of hybrid electric technologies.

85

PTF Conversions Completed Todate

B757SF 17 for DHL completed in 2003

MD-11 18 of 38 orders redelivered to various customers

Marine sector In 2004, ST Marine launched the fi rst locally built

frigate in July and stepped up production for the

frigate programme.

In the US, VT Halter Marine delivered an Offshore

Supply Vessel to a leading offshore operator in the

US. VT Halter Marine had also secured a number

of shipbuilding projects during the year and these

are currently in progress. Major shipbuilding

contracts secured included two Articulated Tug

Barge (ATB) units for Vessel Management Services,

a subsidiary of Crowley Maritime, two Harbour Tugs

for Lockheed Martin, a Stevedoring Crane Barge

for Tide Leasing Company and a double ended

Passenger/Vehicle Ferry for Nantucket

Steamship Authority.

DYNAMICS AND RISK FACTORS OF THE BUSINESS

REVIEW OF BUSINESS ENVIRONMENT

Aerospace sector Since 2001, the aviation industry has been

hit by the multiple impact of a general world

economic slowdown, 9/11, the war in Iraq, SARS,

and the hefty increase in fuel prices. These have

dampened air travel in most parts of the world.

While passenger load factors have since recovered

somewhat, due to better global economic growth,

airlines continue to experience reduced frequency

of fl ights and lower yields. Hence, while some

airlines are recovering to profi tability or reduced

losses, airlines in general continue to re-engineer

their operations in the face of more competition

and the rise of LCCs.

The MRO industry is reported to have shrunk by

14% from 2001 levels due to reduced fl ying hours,

retirement of maintenance intensive older aircraft

and postponement of non obligatory maintenance

and modifi cation work. Many MROs have

experienced diffi cult times and some have gone

out of business. Nevertheless, overcapacity exists

in the industry.

Despite these problems, ST Aerospace maintained

its position as a premium provider of third party

MRO through the strong support from its customers

around the world.

From an industry viewpoint, while uncertainties

continue, established airlines are expected to

continue to restructure their operations to focus

on core businesses and outsource MRO to reduce

operating costs. This is a business model adopted

by the LCCs from their inception.

In anticipation of the long term trend for airlines

to increase outsourcing of MRO, ST Aerospace has

been putting in place a global network of MRO

facilities and new capabilities to meet this demand.

ST Aerospace continues to position itself as the

preferred partner to airlines and freight operators,

able to meet their requirements from discreet work

packages outsourcing to a full spectrum outsourcing

including TAS programmes.


34

36

38

40

42

44

... MRO Market Value

US$ b

2004200320022001

Source: Overhaul & Maintenance Magazine, April 2004

42.2

37.8

36.137.0



Locally Built Frigates – Completed Milestones

Frigate 2‘RSS Intrepid’

Frigate 3 Frigate 4 Frigate 5 Frigate 6

LaunchedJul 2004

Keel LaidNov 2003

Keel LaidMay 2004

Keel LaidNov 2004

Plate CutSep 2003


Electronics sector The environment that ST Electronics operates in

is highly dynamic. The challenges that it faces

include keeping abreast of technological advances

to guard against obsolescence, maintaining

strategic alliances with reliable partners and having

adaptable and agile marketing strategies for the

different countries in which it has interests.

ST Electronics also has to deal with margin

erosions due to low pricing strategies adopted

by local players.

The recovering economies in the region present

opportunities in infrastructural projects. With better

public fi nances, regional governments are beginning

to focus on infrastructure projects as part of their

economic development strategy. Asian countries

especially are focussing on improving transportation

infrastructure to ease traffi c conditions in major

cities. However, the Asian fi nancial crisis has

made many governments realise that they need

to manage large projects more effi ciently by

engaging the private sector through public

private partnerships.

This region is vulnerable to terrorist attacks. Since

terrorism is transnational, dealing with the threat

of terrorism requires tight coordination between

various internal and external agencies. Therefore,

protection of key installations and soft targets

such as shopping centres, hotels and rail network

becomes essential. There is also extensive interest

in maritime and port security.

Against this backdrop, ST Electronics is well

positioned to offer its systems and solutions

to meet the demands for homeland security.

ST Electronics’ strengths lie in its domain expertise

in large-scale systems integration and project

management, real time and mission critical software

solutions, wireless and data communications, and a

full spectrum of multi platforms training solutions.

As a technology-based company, ST Electronics’

key strategic pillar is innovation. Since 1998,

ST Electronics has fi led 35 patent applications of

which 15 have been granted.

ST Electronics was part of the Infrared Fever

Screening System team which won the 2004

US Tech Museum Award (Health Category). The

award recognised the team, including members

from Chartered Electro-Optics and the Defence

Science & Technology Agency, for adapting military

technology to commercial use in a creative way.

The system developed was used worldwide as the

frontline defence against SARS during the outbreak

last year. Innovation, coupled with strong market

and technology partnerships, will continue to be

leveraged upon as the company’s competitive

strengths for success.

Land Systems sector Defence sales for this sector is not expected to

grow over the next few years as defence forces

shift their focus from conventional platforms and

munitions to smaller quantities of weapon systems

with more sophistication and higher technology

content. While ST Kinetics continues to build on

these newer capabilities and solutions, it has also

started leveraging on its existing know how and

capacity to secure business from local organisations

such as the Civil Aviation Authority of Singapore,

the Singapore Civil Defence Force and the

Singapore Police Force.

With homeland security gaining greater emphasis,

ST Kinetics has embarked on several initiatives to

develop its homeland security business. These

include forging alliances with foreign and local

partners via joint product development projects as

well as investments in capabilities and markets.

Major export sales will take time to materialise

as the sector continues its efforts to secure some

of the major platform programmes that are in

the pipeline.

87

The economic growth in China and the region

continues to present opportunities especially in

commercial automotive and related infrastructure

and urban service industries. ST Kinetics will

continue to position itself and leverage on related

investments worldwide to enter these growing

markets. Concurrently, it will continue to seek and

pursue growth opportunities in the global specialty

vehicles business.

Marine sector The sector’s thrust in the commercial market is to

target niche market segments where its past and

present product offerings and the ability to provide

customised solutions give it a unique competitive

advantage. VT Halter Marine’s construction of

a PCTC for Pasha Hawaii Transport Lines was

one such example. This vessel was successfully

launched in October.

In the naval and government shipbuilding segment,

ST Marine continues to provide support to its

major customers as well as to seek new markets

globally. Here again, ST Marine can offer a suite

of tailor made designs and solutions. The frigate

newbuilding programme is in full swing, with the

fi rst locally built frigate launched in July.

The frigate programme attests to ST Marine’s

capability in building sophisticated vessels and

will position ST Marine among the leading players

in the market. The challenging demands of this

project will move it up the scale of competency

in project management and further sharpen its

technical expertise. ST Marine was successful

in securing a contract to build a Landing Supply

Craft for the Ministry of Interior, Kuwait. In the US,

VT Halter Marine was also successful in securing

shipbuilding contracts in the naval and government

sector. During the year, VT Halter Marine was

occupied with the construction of two LSVs for the

US Army and two FSVs for NOAA.

Overall, the Marine sector has positioned itself as

a designer and builder of technically sophisticated

vessels, capable of delivering customised

solutions to its customers. At the same time,

ST Marine continually improves its cost structures

by enhancing its production processes for better

productivity. This is done to gear ST Marine to be

globally competitive.

Keen competition also exists in the shiprepair

segment of ST Marine’s business from lower

cost shipyards such as those in China. This is

especially so for standard shiprepair services such

as steelwork, pipework, hull blasting and painting.

Again, ST Marine’s response was to identify and

create a niche for itself in jobs requiring high

engineering content and high value added services

such as ship conversions and in shiprepair work

where quality, reliability and quick turnaround are

key. ST Marine continued to secure signifi cant

projects in the dredger as well as chemical tanker

repair markets. ST Marine’s ability to provide

competitively priced, quality shiprepair services

within a fast turnaround time continue to be strong

selling points for winning new customers and

servicing repeat customers.

RISK MANAGEMENT

(a) Operational Risk The Group operates in 15 countries spread across

the Asia Pacifi c, Europe and the US. As part of the

Group’s plan to grow its business internationally,

it will continue to focus on increasing its operating

activities and presence in Europe, Greater China

and the US. In 2004, 9% of the Group’s assets

was in the US. Revenue from customers located

outside Asia has increased from 26% in 2001 to

33% in 2004.





As part of its business strategy, the Group seeks

to increase the percentage of its international

business and customers, thereby achieving greater

geographical diversifi cation. Likewise, the Group

also plans to raise the proportion of its commercial

business compared to its defence business. A

more diversifi ed base of military and commercial

customers will reduce the risk of customer

concentration.

As the Group expands its business globally, it has

also geared up its risk management capabilities.

Incidents like 9/11, the accounting improprieties

at several large US corporations, the appearance

of SARS in the region and the threat of terrorism

clearly signal that risk management is a ‘must do’

and not a ‘can do’ action.

During 2004, the Group’s Risk Review Committee,

comprising fi ve directors and a co-opted member,

met on four occasions to review the signifi cant

risks of the four business sectors in the Group and

its risk management policies. The risks reviewed

included operational risk, fi nancial risk, strategic

risk, and other liability risks.

Risk management is an ongoing process. It needs

constant monitoring and maintenance to be

effective. To this end, the management team is

developing a robust enterprise risk management

framework. Results from this work are expected

in 2005.

A team was also formed to develop a project risk

management framework for the Group’s major

projects. Such projects are usually high in fi nancial

value and sophisticated in nature. The team rolled

out a project risk management manual and trained

the project management staff from the various

business sectors.

(b) Investment Risk The Group seeks to grow its businesses via three

fronts: through organic growth of its existing

capabilities and capacities; development of new

capabilities; and through acquisition of business

entities or operating assets or through JVs.

Investment activities, ranging from identifi cation

of targets to the conduct of due diligence, are

supported by a dedicated team of investment

professionals and augmented by external

professionals for specialised services. The

business proposals are guided by a given set

of internal investment criteria, evaluated by

senior management and endorsed by a Business

Investment and Divestment Committee before

seeking fi nal Board approval.

(c) Interest Rate Risk The Group’s cash balances were placed with

reputable banks, fi nancial institutions, and a related

corporation. The Group managed its interest rate

risk on its interest income by placing the cash

balances in varying maturities and interest

rate terms.

%

Assets located in US Revenue from customerslocated outside Asia

20032004

0

5

10

15

20

25

30

35

9% 10%

33%

29%

Assets & Revenue (extracts)

89

(d) Foreign Exchange (FX) Risk The Group’s FX risk arises both from its subsidiaries

operating in foreign countries, which generate

revenue and incur costs denominated in foreign

currencies and from those operations of its

local subsidiaries which are transacted in foreign

currencies.

The Group entered into forward FX contracts to

hedge against its FX risk resulting from anticipated

sale and purchase transactions denominated in

foreign currencies, primarily in Euro and US dollars.

(e) Derivative Financial Instrument Risk The Group used forward FX and options to

hedge its net foreign currency exposures in

the management of FX risk. These derivative

instruments are used for hedging and not for

speculative transactions in foreign exchange.

(f) Market Risk The Group has investments in quoted equity

shares and bonds, and has placed funds with fund

management companies. The market value of these

investments will fl uctuate with market conditions.

To mitigate market risk, the Group’s funds with fund

managers are guaranteed 95% to 100% of their

principal values at the end of the fund management

period. Also, before a fund manager is allocated

funds for management, its management capability

and fi nancial strength is carefully considered.

(g) Liquidity Risk To manage liquidity risk, the Group monitors

its net operating cash fl ow and maintains an

adequate level of cash and cash equivalents

and secured committed funding facilities from

fi nancial institutions. In assessing the adequacy of

these facilities, management reviews its working

capital requirements.

(h) Credit Risk Credit risk, or the risk of counterparties defaulting,

is managed through the application of credit

approvals, credit limits and monitoring procedures.

Where appropriate, the Company or its subsidiaries

obtain collaterals from customers or arrange master

netting agreements. Cash terms, advance payments,

and letters of credit or bank guarantees are

required for customers of lower credit standing.

SENSITIVITY ANALYSIS

(a) Interest Rate The Group’s cash and cash equivalents as well

as funds under management are largely invested

in fi xed deposits and fi xed income securities.

Movements in interest rates will therefore have

an impact on the interest and investment income

for the Group. Based on the Group’s cash and

cash equivalents of $1.5b as at year end 2004, a

one percentage point movement in effective fi xed

deposit rates is estimated to result in an annual

$15m change in interest income for the Group.


1.50

1.55

1.60

1.65

1.70

1.75

1.80

1.85

1.90

Jan

02M

ar 0

2

Jan

03M

ar 0

3M

ay 0

3

May

02

Jul 0

3

Jul 0

2

Sep

03

Sep

02

Nov

03

Nov

02

Jan

04M

ar 0

4M

ay 0

4Ju

l 04

Sep

04Nov

04

... US$/S$ Exchange Rates

Source : Bloomberg




(b) Gross Profi t Margin At 2004 turnover of $2.95b, a one percentage

point movement in the gross profi t margin of

the Group will lead to a $29.5m change in

gross profi t for the Group. The many different

programmes undertaken across the Group with the

accompanying variations in margins have the effect

of reducing the Groupwide impact from specifi c

project fl uctuations.

(c) Others Other risk factors that will have an impact on

turnover and net profi ts tend to be sector or project

specifi c. Hence, it is not practical to perform

sensitivity analysis in such instances.

PROSPECTS FOR 2005

2004 saw encouraging economic growth in the global

economy though weakness remains in some sectors.

It was a year when the Group continued its efforts to

grow its external wing and build up its order book.

Moving into 2005, the global economic outlook is

uncertain and the Group continues to be exposed to

external risks, which could affect its businesses. For

2005, barring unforeseen circumstances, the Group

expects to achieve a higher turnover and modest

growth in PBT.

In Aerospace, the aviation industry remains challenging

due to higher oil prices and continued competition from

LCCs. Legacy airlines in particular may respond to cost

pressures by outsourcing some of their MRO needs.

The sector will continue its focussed drive to serve its

customers better and to reach out to new customers.

These would be achieved through extending the reach

of the sector’s operations, continued investments

to develop new capabilities and increased focus on

customer needs.

On the back of a healthy order book, the Electronics

business will continue its strategy of growing its

international business by focussing on customer

relationship management, the development of niche

offerings and local partnerships in the global market.

These initiatives are designed to seek and secure

more business deals and possibly help to increase

its strategic investments in China, India and the

Middle East.

In Land Systems, the focus remains to develop the

commercial automotive businesses, building on BZK

and commencing operations of the automotive centres

JVs in China. The sector will continue with its efforts

to explore acquisition opportunities in commercial

specialty vehicles in North America.

In Marine, the yards in Singapore and US will continue

its focus on production activities to meet the scheduled

deliveries of the various newbuilding programmes and

improving its operational effi ciency in 2005. The sector

will continue to pursue opportunities in the naval and

government sectors and segments of the commercial

market and grow its order book.

Jan

02M

ar 0

2

Jan

03M

ar 0

3M

ay 0

3

May

02

Jul 0

3

Jul 0

2

Sep

03

Sep

02

Nov

03

Nov

02

Jan

04M

ar 0

4M

ay 0

4Ju

l 04

Sep

04Nov

04

S$ SIBOR (3 months)

US$ SIBOR (3 months)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

... SIBOR: Interest Rates

Source : Bloomberg

%

91

SHAREHOLDER RETURNS

Return On Equity The Return On Equity (ROE) improved 1.8 percentage

points to 26.4% in 2004, as a result of higher profi t

after tax and minority interest as well as a lower level

of shareholders’ funds, subsequent to the dividend

payment of $326.5m in April 2004.

Dividend Per Share (DPS) and Earnings Per Share (EPS)The proposed dividend for 2004 of $358.3m is

higher than the 2003 dividend of $326.5m paid in

April 2004. The recommended 2004 dividend took

into consideration the Group’s present cash position,

positive cash fl ow generated from operations,

and projected capital requirements. Payment of

the dividends is subject to the approval of the

shareholders of the Company at the forthcoming

Annual General Meeting.

The proposed 2004 dividend of $358.3m represents

100% of earnings for FY2004.

To maximise shareholders’ value, management will

continue its policy of paying a high level of dividends

to return excess cash generated from the operations, if

the cash is not required for investments in the future.

These investments may include potential mergers and

acquisitions and the building of new facilities and

capabilities to expand the existing operations.

Share Purchase MandateIn the coming Extraordinary General Meeting, the

Company will again seek shareholders’ approval to

renew the Share Purchase Mandate for the purchase

of up to 10% of the number of ordinary shares in

the capital of the Company. The share purchase can

be effected either through market purchases or off

market purchases. The fi nancial impact of various

share purchase scenarios will be presented in a circular

to members.

The purpose of the Share Purchase Plan is to give

the Company the fl exibility to undertake the share

purchase exercise expeditiously. The Share Purchase

Plan provides the Company an alternate avenue to

reward shareholders apart from the traditional dividend

payment route.

FINANCIAL REVIEW

Treasury Policy and Capital StructureThe Group’s Treasury Unit seeks to minimise the

Group’s fi nancial risk, to ensure suffi cient liquidity to

meet the day to day operational needs and to invest

the cash and cash equivalents within the guidelines

approved by the Board of Directors.

Cash and Foreign Exchange ManagementThe Group adopts the strategy of centralised cash

management, where the excess cash of its business

entities are swept to the Treasury Unit, which centrally

manages the investment of the funds. Similarly, the


22

23

24

25

26

27

... Return On Equity

%

20042003200220012000

25.625.0

22.8

24.6

26.4

8

10

12

14

16

18

20

... Dividend / Earnings Per Share

cents

10.12

9.50

11.9211.47

18.5

11.30

11.29

12.40

12.3910.8

20042003200220012000

DPS EPS




FX requirements of the business entities are managed

centrally. The business entities hedge their material

FX exposures arising from sales and/or purchases in

currencies other than the functional currencies. Their

FX requirements are matched internally by the Treasury

Unit and this procedure enables the Group to offset

and minimise FX risk within the Group. The Treasury

Unit then hedges unmatched FX requirements with

external counterparties.

The aim of Treasury Unit’s cash management and FX

management strategies is to maximise the returns

of the Group’s cash resources and to minimise FX

exposures and associated costs. The most common

fi nancial instruments used to manage the FX exposures

are forward FX contracts and currency options.

InsuranceWhere appropriate, the Group manages its insurance

risks on a Group basis to leverage on its position with

the general insurance market.

The Group reviews its insurable risk profi le continually

and makes the necessary adjustments on risk retention

to optimise the coverage and cost. This is done with

advice and support from selected insurance brokers.

Major group insurance policies include Industry Special

Risk, Liabilities and Workmen Compensation, designed

to protect the Group against properties risk, liabilities

for its products and services, and workplace accidents

respectively. The aviation and marine businesses have

specialised insurance programmes.

The Group adopts a proactive strategy to manage

the insurance risk with specifi c risk management

programmes covering the prevention of fi re and

the adoption of Behavioural-Based Safety practices,

among others.

Funding and BorrowingsThe Group funds its investments and operations

through a mixture of shareholders’ funds, advance

payments from customers, and some borrowings.

Its borrowings amount to $158.1m, about 12% of its

shareholders’ funds.

Long term borrowings amount to $26.3m and the

balance is of a short term nature. The long term

borrowings comprise mainly an Industry Revenue Bond

issued by an Aerospace sector’s subsidiary, Mobile

Aerospace, to fund the initial purchase of plant and

machinery for the facilities located at Mobile, Alabama

in 1990. At this point in time, given the Group’s

existing cash and cash equivalents profi le and relatively

low level of borrowings, there is no requirement to

tap the long term debt market. The short term loans

are denominated in US dollars at a fl oating rate that is

commensurate with the Group’s Aaa credit ratings from

Moody’s. The rationale of borrowing in US dollars is to

create a natural currency hedge position for the Group’s

investments in the currency.

The Group’s interest cover stays at a healthy 108 times,

with a gross debt-equity ratio of 0.12.

CASH FLOWS AND LIQUIDITY

Operating ActivitiesFor 2004, the net cash generated from operating

activities amounted to $174.4m. In 2003, the net cash

generated from operating activities amounted

$ m

Borrowings

Total BorrowingsLong TermBorrowings

Short TermBorrowings

2004 2003

0

50

100

150

200

132 136

26 27

158 163

93

to $210.8m. The reduction of $36.4m in FY2004 in

net cash from operating activities was largely due to

working capital movements with negative variances

in stocks and work in progress, trade debtors, other

debtors, deposits and prepayment, trade creditors

as well as other creditors, accruals and provision, but

these were partially offset by positive variances in

progress billings in excess of work in progress and

advance payments from customers.

Investing ActivitiesThe cash outfl ow from investing activities in FY2004

was higher than that of FY2003. This was mainly the

result of higher cash outfl ow for purchases of fi xed

assets, investments, associated companies and JVs as

well as lower dividends from associated companies and

lower proceeds from sale and maturity of investments,

but these were partially offset by a lower outfl ow for

acquisition of subsidiaries.

Financing ActivitiesIn respect of cash fl ow from fi nancing activities, the

lower dividend payout by the Company in 2004

compared to 2003 resulted in a lower cash outfl ow in

fi nancing activities.

Cash and Cash EquivalentsAs at 31 December 2004, the Group’s cash and

cash equivalents stood at $1.5b, which is $0.3b

lower than that of FY2003. The cash and cash

equivalents are centrally managed by the Treasury

Unit in ST Engineering and the majority of the funds

were invested in liquid assets such as fi xed deposits,

fl oating rate notes and placements with a related

corporation. The cash and cash equivalents as at

yearend is adequate to fund the committed and

plan capital expenditure as well as to service the

Group’s borrowings.

Notwithstanding the Group’s current positive cash and

cash equivalent position, it has established short term

fi nancing facilities with various fi nancial institutions

for bridging fi nance. Such liquidity facilities can be

tapped when requirements arise, in particular, fi nancing

signifi cant merger and acquisition deals.

ACCOUNTING POLICIES

The Group’s signifi cant accounting policies are

presented in Notes to the Financial Statements, note

no. 2 (pg 119 to 126). The Group has applied the

same accounting policies and methods of computation

in the fi nancial statements for the current reporting

year compared with the audited fi nancial statements as

at 31 December 2003, except for the early adoption,

with effect from the fi nancial year beginning 1 January

2004, of the following new and revised Singapore

Financial Reporting Standards (FRS) issued in July

2004 by the Council on Corporate Disclosure and

Governance (CCDG):

FRS 103 Business Combinations

Revised FRS 36 Impairment of Assets

Revised FRS 38 Intangible Assets

The fi nancial statements were prepared in accordance

with the Singapore Financial Reporting Standards as

required by the Companies Act.


$ m

Cash Flow

Financing ActivitiesInvesting ActivitiesOperating Activities

* Includes dividend payment.2004 2003

-400

-350

-300

-250

-200

-150

-100

-50

0

50

100

150

200

250174.4

210.8

(134.8)

3.3

(321.9)*

(399.1)*



Financial Report

Apis mellifera – HONEYBEESExhibiting far-sightedness, honeybees work fervently to harvest nectar and store nutrient-rich honey during the fl owering season. In the winter, they remain active by prudently metabolising honey and vibrating their wings to generate heat.



Directors’ Report31 December 2004

(Currency – Singapore dollars unless otherwise stated)

We, the undersigned directors, on behalf of all the directors of the Company, submit this annual report to the members together with the audited fi nancial statements of the Group and of the Company for the fi nancial year ended 31 December 2004.

DirectorsThe directors of the Company in offi ce at the date of this report are as follows:

Peter Seah Lim Huat (Chairman)Tan Pheng Hock (President and Chief Executive Offi cer)Koh Beng SengLG Ng Yat Chung Dr Tan Kim Siew Professor Lui Pao ChuenWinston Tan Tien HinLucien Wong Yuen KuaiDr Philip Nalliah PillaiQuek Poh HuatVenkatachalam KrishnakumarBG Bernard Tan Kok Kiang (alternate Director to LG Ng Yat Chung)

Arrangements to enable directors to acquire shares or debenturesExcept for the Singapore Technologies Engineering Executives’ Share Option Scheme, Singapore Technologies Engineering Share Option Plan and Singapore Technologies Engineering Performance Share Plan (collectively the “ST Engineering Share Plans”), neither at the end of nor at any time during the fi nancial year was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefi ts by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Directors’ interests in shares or debenturesExcept as disclosed in this report, no director who held offi ce at the end of the fi nancial year had interests in shares or debentures of the Company or of related corporations either at the beginning (or date of appointment, if later) or at the end of the fi nancial year and on 7 January 2005.


Directors’ Report31 December 2004(Currency – Singapore dollars unless otherwise stated)

Directors’ interests in shares or debentures (continued) According to the register kept by the Company for the purposes of Section 164 of the Singapore Companies Act, Chapter 50, particulars of interests of directors who held offi ce at the end of the fi nancial year in shares or debentures in the Company and its related corporations were as follows: Holdings in the name of the director, spouse or infant children

1 January 2004 or date of appointment if later 31 December 2004

The CompanyOrdinary Shares of $0.10 each

Tan Pheng Hock 73,864 73,864Dr Tan Kim Siew 35,000 – Professor Lui Pao Chuen 181,444 181,444Winston Tan Tien Hin 200,000*1 200,000*1

Quek Poh Huat 763,228 763,228BG Bernard Tan Kok Kiang 9,164 9,164

Related CorporationsCapitaCommercial Trust Management LimitedUnit Holdings in CapitaCommercial Trust Peter Seah Lim Huat – 22,600BG Bernard Tan Kok Kiang – 500

CapitaLand LimitedOrdinary Shares of $1.00 each

Peter Seah Lim Huat 113,000 113,000Professor Lui Pao Chuen 34,600 34,600BG Bernard Tan Kok Kiang 2,500 2,500

CapitaMall Trust Management LimitedUnit Holdings in CapitaMall Trust Peter Seah Lim Huat 55,000 60,500Tan Pheng Hock 10,000 11,000Winston Tan Tien Hin 70,000*2 70,000*2

Lucien Wong Yuen Kuai 55,000 60,500

Chartered Semiconductor Manufacturing LtdOrdinary Shares of $0.26 each Tan Pheng Hock 7,000 7,000Koh Beng Seng 44,074 44,074Dr Tan Kim Siew 25,000 25,000





Holdings in the name of the director, spouse or infant children


Neptune Orient Lines LtdOrdinary Shares of $1.00 each

Professor Lui Pao Chuen 10,000 –

Raffl es Holdings Limited Ordinary Shares of $0.32 each Tan Pheng Hock 8,000 8,000

SembCorp Industries LtdOrdinary Shares of $0.25 each Professor Lui Pao Chuen 70,415 70,415Quek Poh Huat 36,890 36,890BG Bernard Tan Kok Kiang 3,951 3,951

SembCorp Logistics Ltd Ordinary Shares of $0.25 each

Professor Lui Pao Chuen 125,200 125,200

SembCorp Marine Ltd Ordinary Shares of $0.10 each

Professor Lui Pao Chuen 60,000 60,000

SIA Engineering Company LimitedOrdinary Shares of $0.10 each

Dr Tan Kim Siew 10,000 – Professor Lui Pao Chuen 40,000 40,000

Singapore Airlines LimitedOrdinary Shares of $0.50 each

Dr Tan Kim Siew 2,000 5,000Professor Lui Pao Chuen 8,000 8,000Winston Tan Tien Hin 4,000 4,000Lucien Wong Yuen Kuai 50,000 40,000Venkatachalam Krishnakumar 4,000 4,000BG Bernard Tan Kok Kiang 1,000 1,000





Singapore Airport Terminal Services LtdOrdinary Shares of $0.10 each Dr Tan Kim Siew 30,000 – Professor Lui Pao Chuen 40,000 50,000

Singapore Computer Systems Limited Ordinary Shares of $0.25 each Quek Poh Huat 15,000 15,000BG Bernard Tan Kok Kiang 1,000 1,000

Singapore Food Industries LimitedOrdinary Shares of $0.05 each Professor Lui Pao Chuen 20,000 20,000

Singapore Telecommunications Limited Ordinary Shares of $0.15 each

Peter Seah Lim Huat 3,420 3,176Tan Pheng Hock 3,760 3,500 Koh Beng Seng 1,720 1,600LG Ng Yat Chung 1,540 1,430Dr Tan Kim Siew 58,220 2,990Professor Lui Pao Chuen 3,620 3,370Winston Tan Tien Hin 5,620 5,223Lucien Wong Yuen Kuai 3,420 3,180Dr Philip Nalliah Pillai 53,620 49,800Quek Poh Huat 3,620 3,370BG Bernard Tan Kok Kiang 400 380

SMRT Corporation LtdOrdinary Shares of $0.10 each

Dr Tan Kim Siew 30,000 – Quek Poh Huat 8,000 8,000

SNP Corporation Ltd Ordinary Shares of $0.50 each Winston Tan Tien Hin 54,494*3 54,494*3







STATS ChipPAC Ltd Ordinary Shares of $0.25 each Tan Pheng Hock 6,000 N.A.*4

Koh Beng Seng 45,000 N.A.*4

Dr Tan Kim Siew 35,000 N.A.*4

Lucien Wong Yuen Kuai 30,000 N.A.*4

Quek Poh Huat 1,000 N.A.*4

Venkatachalam Krishnakumar 1,000 N.A.*4

StarHub LtdOrdinary Shares of $0.40 each

Peter Seah Lim Huat – 60,000Tan Pheng Hock – 32,000Venkatachalam Krishnakumar – 20,000

TeleChoice International LimitedOrdinary Shares of $0.02 each

Peter Seah Lim Huat – 50,000Tan Pheng Hock – 30,000

The Ascott Group LimitedOrdinary Shares of $0.20 each Professor Lui Pao Chuen 74,180 74,180BG Bernard Tan Kok Kiang 1,860 1,860

Vertex Technology Fund Ltd Ordinary Shares of US$1.00 each Winston Tan Tien Hin 10 10





Vertex Technology Fund (II) LtdOrdinary Shares of US$1.00 each

Tan Pheng Hock 5† 5†

Koh Beng Seng 15 15Winston Tan Tien Hin 20 20

Redeemable Preference Shares of US$0.01 each Koh Beng Seng 15 15Winston Tan Tien Hin 20 20

Vertex Investment (II) Ltd Ordinary Shares of US$1.00 each Professor Lui Pao Chuen 20 20

1 January 2004 or date of appointment 31 December Exercise if later 2004 price Exercisable period $

The CompanyOptions to Subscribe for Ordinary Shares of $0.10 each

Peter Seah Lim Huat 89,000 89,000 1.92 13.8.2003 to 12.8.2007 44,500 44,500 1.79 7.2.2004 to 6.2.2008 40,500 40,500 1.86 12.8.2004 to 11.8.2008 – 44,500 2.09 10.2.2005 to 9.2.2009 – 44,500 2.12 11.8.2005 to 10.8.2009

Tan Pheng Hock 5,000 5,000 1.29 8.8.2000 to 7.8.2008 400,000 400,000 1.418 10.2.2001 to 9.2.2009 5,000 5,000 2.00 11.8.2001 to 10.8.2009 400,000 400,000 2.26 10.2.2002 to 9.2.2010 225,000 225,000 2.72 20.2.2002 to 19.2.2011 227,500 227,500 2.68 11.8.2002 to 10.8.2011 175,000 175,000 2.29 8.2.2003 to 7.2.2012 175,000 175,000 1.92 13.8.2003 to 12.8.2012 200,000 200,000 1.79 7.2.2004 to 6.2.2013 200,000 200,000 1.86 12.8.2004 to 11.8.2013 – 200,000 2.09 10.2.2005 to 9.2.2014 – 200,000 2.12 11.8.2005 to 10.8.2014

Koh Beng Seng – 19,500 2.09 10.2.2005 to 9.2.2009 – 19,500 2.12 11.8.2005 to 10.8.2009






The CompanyOptions to Subscribe for Ordinary Shares of $0.10 each

Professor Lui Pao Chuen 21,500 21,500 1.79 7.2.2004 to 6.2.2008 21,500 21,500 1.86 12.8.2004 to 11.8.2008 – 21,500 2.09 10.2.2005 to 9.2.2009 – 25,250 2.12 11.8.2005 to 10.8.2009

Winston Tan Tien Hin 115,000 115,000 2.72 20.2.2002 to 19.2.2006 105,000 105,000 2.29 8.2.2003 to 7.2.2007 56,500 56,500 1.79 7.2.2004 to 6.2.2008 46,500 46,500 1.86 12.8.2004 to 11.8.2008 – 48,500 2.09 10.2.2005 to 9.2.2009

Lucien Wong Yuen Kuai 75,000 75,000 2.72 20.2.2002 to 19.2.2006 59,000 59,000 2.29 8.2.2003 to 7.2.2007 23,500 23,500 1.79 7.2.2004 to 6.2.2008 19,500 19,500 1.86 12.8.2004 to 11.8.2008 – 19,500 2.09 10.2.2005 to 9.2.2009 – 19,500 2.12 11.8.2005 to 10.8.2009

Dr Philip Nalliah Pillai 75,000 75,000 2.72 20.2.2002 to 19.2.2006 62,000 62,000 2.29 8.2.2003 to 7.2.2007 31,000 31,000 1.79 7.2.2004 to 6.2.2008 29,000 29,000 1.86 12.8.2004 to 11.8.2008 – 31,000 2.09 10.2.2005 to 9.2.2009 – 31,000 2.12 11.8.2005 to 10.8.2009

Quek Poh Huat 43,000 43,000 1.92 13.8.2003 to 12.8.2007 35,000 35,000 1.79 7.2.2004 to 6.2.2008 33,000 33,000 1.86 12.8.2004 to 11.8.2008 – 33,000 2.09 10.2.2005 to 9.2.2009 – 33,000 2.12 11.8.2005 to 10.8.2009

Related Corporations CapitaLand LimitedOptions to Subscribe for Ordinary Shares of $1.00 each Peter Seah Lim Huat 90,000 90,000 1.32+1 11.5.2003 to 10.5.2007 90,000 118,800+1 1.00+1 1.3.2004 to 28.2.2008 – 90,000 1.33+1 28.2.2005 to 27.2.2009

Lucien Wong Yuen Kuai 53,850 53,850 2.10 13.6.2001 to 11.6.2005 100,000 100,000 2.02 19.6.2002 to 18.6.2006 70,000 70,000 1.32 11.5.2003 to 10.5.2007 80,000 105,600 1.00 1.3.2004 to 28.2.2008 – 80,000 1.33 28.2.2005 to 27.2.2009




Chartered Semiconductor Manufacturing LtdOptions to Subscribe for Ordinary Shares of $0.26 each

Peter Seah Lim Huat 23,443 23,443 3.46 22.2.2003 to 22.2.2007 46,887 46,887 1.86 30.8.2003 to 30.8.2007 40,000 40,000 0.72 28.2.2004 to 28.2.2008 45,000 45,000 1.10 29.8.2004 to 29.8.2008 – 85,000 1.70 27.2.2005 to 27.2.2009

Koh Beng Seng 11,721 – 2.86 29.4.2000 to 29.10.2004 11,721 11,721 14.24 6.4.2001 to 6.4.2005 11,721 11,721 10.12 3.10.2001 to 3.10.2005 5,860 5,860 4.05 28.3.2002 to 28.3.2006 11,721 11,721 4.26 15.8.2002 to 15.8.2006 29,304 29,304 1.86 30.8.2003 to 30.8.2007

Global Crossing LimitedOptions to Purchase Common shares of US$0.01 each

Peter Seah Lim Huat – 40,000 10.16 12.1.2005 to 11.1.2014

PT Indonesian Satellite Corporation TbkOptions to Subscribe for Ordinary shares of Rp$100 each

Peter Seah Lim Huat 30,000 150,000+4 1567.44+4 1.8.2004 to 31.7.2005 – 150,000 3702.60 1.8.2005 to 31.7.2006

SembCorp Industries LtdOptions to Subscribe for Ordinary Shares of $0.25 each Peter Seah Lim Huat 140,000 140,000 1.99 27.6.2001 to 26.6.2005 140,000 140,000 1.55 20.4.2002 to 19.4.2006 70,000 70,000 1.59 8.5.2003 to 7.5.2007 70,000 70,000 0.98 18.10.2003 to 17.10.2007 70,000 70,000 1.14 3.6.2004 to 2.6.2008 70,000 70,000 1.29 19.11.2004 to 18.11.2008 – 70,000 1.35 18.5.2005 to 17.5.2009 – 70,000 1.52 23.11.2005 to 22.11.2009






SembCorp Marine Ltd Options to Subscribe for Ordinary Shares of $0.10 each

Tan Pheng Hock 20,000 20,000 0.66 28.9.2002 to 27.9.2006 40,000 40,000 0.90 8.11.2003 to 7.11.2007 50,000 50,000 0.99 9.8.2004 to 8.8.2008 – 50,000 1.04 11.8.2005 to 10.8.2009

StarHub LtdOptions to Subscribe for Ordinary Shares of $0.40 each Peter Seah Lim Huat 150,000 37,500+2 0.88+2 30.11.2003 to 29.11.2007 75,000 18,750+2 0.88+2 31.5.2004 to 30.5.2008 75,000 18,750+2 0.88+2 29.11.2004 to 28.11.2008 – 18,750 0.96 3.4.2005 to 2.4.2009 – 18,750 0.985 27.11.2005 to 26.11.2009

STATS ChipPAC LtdOptions to Subscribe for Ordinary Shares of $0.25 each

Peter Seah Lim Huat 70,000 N.A.*4 1.99 6.8.2004 to 5.8.2013

Koh Beng Seng 50,000 N.A.*4 3.554 9.2.2000 to 21.11.2004 10,000 N.A.*4 0.250 9.2.2000 to 9.12.2004 40,000 N.A.*4 6.930 20.4.2001 to 19.4.2005 50,000 N.A.*4 1.592 24.4.2002 to 23.4.2006 50,000 N.A.*4 2.885 29.4.2003 to 28.4.2007 50,000 N.A.*4 1.990 6.8.2004 to 5.8.2008

STT Communications LtdOptions to Subscribe for Ordinary Shares of $0.50 each Peter Seah Lim Huat 8,000 8,000 0.50 29.6.2003 to 28.6.2012 39,000 39,000 0.57 30.7.2004 to 29.7.2013 – 130,000 1.08 29.7.2005 to 28.7.2014 Singapore Telecommunications Limited Options to Subscribe for Ordinary Shares of $0.15 each Quek Poh Huat 60,000 60,000 1.42 9.9.2003 to 9.9.2007




The Ascott Group LimitedOptions to Subscribe for Ordinary Shares of $0.20 each

Peter Seah Lim Huat 12,000 12,000 0.353 5.5.2003 to 30.12.2006+3

30,000 30,000 0.321 10.5.2004 to 30.12.2006+3

– 32,000 0.418 31.12.2004 to 30.12.2006+3



The CompanyConditional Award of 150,000 performance shares to be delivered after 2003

Tan Pheng Hock 0 to 300,000#1 – #1

Conditional Award of 200,000 performance shares to be delivered after 2004

Tan Pheng Hock 0 to 400,000#2 0 to 400,000#2


Tan Pheng Hock 0 to 500,000#3 0 to 500,000#3


Tan Pheng Hock – 0 to 500,000#4

*1 Held in the name of Winmark Investments Pte Ltd, a company in which Winston Tan Tien Hin has a 50% interest.

*2 Includes deemed interest in 35,000 in unit holdings in CapitaMall Trust, held by Winmark Investments Pte Ltd, a company in which Winston Tan Tien Hin has a 50% interest.

*3 Includes deemed interest in 366 shares in SNP Corporation Ltd, held by Winmark Investments Pte Ltd, a company in which Winston Tan Tien Hin has a 50% interest.

*4 STATS ChipPAC Ltd ceased to be a related corporation of Singapore Technologies Pte Ltd during the fi nancial year following the consummation of the Merger between ST Assembly Test Services Ltd and ChipPAC, Inc. on 5 August 2004.

† Held in trust by a trustee company on behalf of the directors.

+1 During the year CapitaLand Ltd underwent a capital restructuring exercise involving capital reduction and distribution in specie of an aggregate sum of approximately $886 million in the form of units in CapitaCommercial Trust (“CCT”) to CapitaLand shareholders. Pursuant to the CapitaLand Share Option Plan, adjustments were accordingly made to outstanding options and/or the exercise price of certain options in connection with the capital reduction and the distribution in specie of CCT units.





+2 StarHub Ltd underwent a capital restructuring exercise in August 2004 by way of a share consolidation whereby every 4 ordinary shares of par value $0.10 each in the capital of StarHub Ltd were consolidated into one ordinary share of par value $0.40. Pursuant to the StarHub Pte Ltd Share Option Plan (“terminated Share Option Plan”), the unexercised options granted under the terminated Share Option Plan were adjusted by dividing the number of shares underlying each option by 4 and multiplying the respective exercise price by 4.

+3 Pursuant to the existing STTC Share Option Plan and Ascott Share Option Plan (together, the “Share Option Plans”), Singapore Technologies Pte Ltd (“STPL”) has been designated as the parent company. Employees of STPL as parent group employees were granted options (“Options”) to subscribe for ordinary shares in the capital of STT Communications Limited (“STTC”) and/or The Ascott Group Ltd (“Ascott”). Arising from a restructuring between Temasek Holdings (Private) Limited and STPL which was completed on 31 December 2004, STPL ceased to be the parent company of STTC and Ascott respectively. Employees of STPL ceased to be employees of STPL with effect from 1 January 2005. Pursuant to the rules of the respective Share Option Plans, the respective Executive Resource & Compensation Committees of STTC and Ascott agreed that the Options then held by each of such former employees of STPL shall not lapse, that the vesting periods (if any) in respect of such Options shall be fully accelerated and that such Options shall continue to be exercisable as follows:-

(a) In respect of STTC – up to 30 March 2005; and(b) In respect of Ascott – for a period of 2 years from 31 December 2004.

+4 Pursuant to the 5:1 stock split effected at Indosat’s EGM on 8 March 2004, the number of shares, par value of shares and exercise price have been correspondingly changed and these fi gures refl ect the fi gures following the share split.

#1 The actual number of shares to be delivered depended on the level of achievement of set performance targets in ST Engineering over a 3 year period from 2001 to 2003. Achievement below 80% target level meant no performance shares would be delivered, while achievement up to 200% meant that up to twice the number of conditional performance shares awarded could be delivered. For this period, no new shares were awarded. The conditional award covering the period from 2001 to 2003 have thus lapsed.

#2 The actual number of shares to be delivered will depend on the level of achievement of set performance targets in ST Engineering over a 3 year period from 2002 to 2004. Achievement below 80% target level will mean no performance shares will be delivered, while achievement up to 200% will mean up to twice the number of conditional performance shares awarded could be delivered.



The SGX’s Listing Manual requires a company to provide a statement as at the 21st day after the end of the fi nancial year, showing the direct and deemed interests of each director of the Company in the share capital of the Company. As the Directors’ Report of the Company is dated 7 January 2005, the Company is unable to comply with the 21 days’ requirement.

There was no change in any of the abovementioned directors’ interests in the Company between the end of the fi nancial year and 7 January 2005.

Directors’ interests in contractsSince the end of the previous fi nancial year, no director has received or become entitled to receive a benefi t (other than a benefi t or any fi xed salary of a full-time employee of the Company included in the aggregate amount of emoluments shown in the fi nancial statements, or any emoluments received from related corporations and share options granted pursuant to the ST Engineering Share Plans) by reason of a contract made by the Company or a related corporation with the director or with a fi rm of which the director is a member, or with a company in which the director has a substantial fi nancial interest, except for professional fees paid to a fi rm of which a director is a member as shown in the fi nancial statements.

Share plansThe Executive Resource and Compensation Committee (“ERCC”) is responsible for administering the Singapore Technologies Engineering Share Option Plan (“ESOP”), the Singapore Technologies Engineering Performance Share Plan (“Performance Share Plan”) and the Singapore Technologies Engineering Restricted Stock Plan (collectively “Share Plans”).

The Committee members are Mr Peter Seah Lim Huat (Chairman), Mr Venkatachalam Krishnakumar and Dr Philip Nalliah Pillai.

Following approval of the new Share Plans by shareholders at the Extraordinary General Meeting held on 23 November 2000, the Singapore Technologies Engineering Executives’ Share Option Scheme (“ESOS”) was terminated.



Share planss (continued)As at 31 December 2004, no options have been granted to controlling shareholders of the Company or associates of the Company and no employees have received 5% or more of the total options available under the Share Plans.

The number of options granted and accepted under the ESOP and the number of conditional awards under the Performance Share Plan is within the 15% limit allowed under the Share Plans.

During the fi nancial year, except as disclosed below, there were no options granted by the Company to any person to take up unissued shares of the Company:

(a) Options granted under the ESOS/ESOP (i) During the fi nancial year, the following options were granted under the ESOP:

No. of shares granted under Date of grant Exercisable period options Exercise price $

9.2.2004 10.2.2005 to 9.2.2009 526,500 2.09 9.2.2004 10.2.2005 to 9.2.2014 14,045,631 2.09 21.6.2004 22.6.2005 to 21.6.2014 100,000 2.00 10.8.2004 11.8.2005 to 10.8.2009 482,448 2.12 10.8.2004 11.8.2005 to 10.8.2014 14,861,837 2.12

(ii) The options granted to directors under the ESOS/ESOP are as follows:

Aggregate options Aggregate granted and options Options granted accepted since exercised since Aggregate and accepted commencement commencement options during the of ESOS/ESOP of ESOS/ESOP outstanding fi nancial year to end of to end of as at end of Name of participant under review fi nancial year fi nancial year fi nancial year

Director of the Company ESOS Tan Pheng Hock – 1,699,864 889,864 810,000 ESOP

Peter Seah Lim Huat 89,000 263,000 – 263,000 Tan Pheng Hock 400,000 1,602,500 – 1,602,500 Koh Beng Seng 39,000 39,000 – 39,000 Professor Lui Pao Chuen 46,750 89,750 – 89,750 Winston Tan Tien Hin 48,500 371,500 – 371,500 Lucien Wong Yuen Kuai 39,000 216,000 – 216,000 Dr Philip Nalliah Pillai 62,000 259,000 – 259,000 Quek Poh Huat 66,000 177,000 – 177,000

(iii) In respect of options granted to employees of related corporations, a total of 62,852 options were granted during the fi nancial year, making it a total of 568,627 options granted from the commencement of the ESOS/ESOP to the end of the fi nancial year.





Share plans (continued)(a) Options granted under the ESOS/ESOP (continued)

(iv) The options granted by the Company do not entitle the holders of the options, by virtue of such holdings, to any right to participate in any share issue of any other company.

(vi) No share options had been offered at a discount during the fi nancial year ended 31 December 2004.

(vii) Proforma Financial Effect under FRS102 Share-based Payment:

Strictly for information purposes only, based on management’s current estimates and assumptions, the proforma profi t after taxation and minority interests and the earnings per share would have been as follows had the Company accounted for the fair value of the options granted under FRS102 Share-based Payment:

2004 $’000

Profi t after taxation and minority interests but before extraordinary items: As reported 358,385Proforma 351,335 Earnings per share (in cents):As reported 12.40 Proforma 12.16

Diluted earnings per share (in cents):As reported 12.36 Proforma 12.12

Under the transitional provisions of FRS102 Share-based Payment, this FRS only applies to options that were granted after 22 November 2002 and had not yet vested at 1 January 2005.

These proforma amounts may not be representative of future disclosures of the fi nancial impact of share options granted since the estimated fair value of share options is determined in respect of grants made and accepted during the period covered under the transitional provision. The estimated fair values of the share options are amortised over the vesting periods of the stock options and additional options may be granted in future years.

(b) Issue of shares under optionDuring the fi nancial year, 6,136,280 ordinary shares of $0.10 each in the Company were issued pursuant to the exercise of options to take up unissued shares of the Company.



Share plans (continued)(c) Performance Share Plan

The Performance Share Plan was established with the objective of motivating senior executives to strive for superior performance and sustaining long-term growth for ST Engineering and its subsidiaries (“the ST Engineering group”). Awards of performance shares, which are released to recipients free of payment, are granted conditional on performance targets set based on medium-term corporate objectives.

Pursuant to the Performance Share Plan, the ERCC has decided to grant awards on an annual basis, conditional on targets set for a performance period, currently prescribed to be a three-year performance period. The performance shares will only be released to the recipient at the end of the performance qualifying period. The fi nal number of performance shares given will depend on the level of achievement of those targets over the three-year performance period. A specifi ed number of performance shares shall be released by the ERCC to the recipient at the end of the performance period, provided the minimum level of targets achieved is not less than 80% of targets set.

The medium-term stretched targets are set over a three-year performance period based on long-term corporate objectives. The three targets which have been set for the fi rst and second awards are Total Shareholders’ Return, Value Added per Employment Cost and EVA Spread.

During the fi nancial year, the fi fth grant of conditional awards aggregating 2,130,000 performance shares was made to 28 key executives of the ST Engineering group, as part of the incentives plan to motivate key executives of the ST Engineering group. The key executives included Mr Tan Pheng Hock, an executive Director of the Board, who was conditionally awarded 250,000 performance shares. This fi fth conditional award was for the performance qualifying period of 2004 to 2006.

The award numbers are assumed to represent a 100% achievement of the targets set. If the executives exceed the targets set by a higher margin as indicated above, they could each be eligible for up to twice the number of performance shares stated in the conditional awards. On the other hand, if the target achievement is below the threshold level (<80%), they will not receive any performance shares.

The release of the performance shares can take the form of either a new issue of shares or purchase of existing shares as permitted under the Performance Share Plan.

No shares were released in 2004 for the award covering the performance period 2001 to 2003 as the achievement of the set targets was below 80%. The 780,000 shares conditionally awarded for this performance period have hence lapsed.

The total number of shares in the remaining awards which were granted conditionally for the performance periods 2002 to 2004, 2003 to 2005 and 2004 to 2006 respectively, not due to be released yet, total 6,100,000. This total is based on 100% achievement of the set targets. Based on the actual achievement of the set targets, the total release of awards could range from zero to a maximum of 12,200,000 shares.

In accordance with the accounting policy of the Group, the Group has provided $3,040,850 (2003: $3,667,400) for performance shares in the current fi nancial year.





Audit CommitteeThe Audit Committee comprises three independent non-executive directors, one of whom is also the Chairman of the Committee. The members of the Audit Committee at the date of this report are as follows:

Koh Beng Seng (Chairman)Dr Philip Nalliah PillaiVenkatachalam Krishnakumar

The fi nancial statements, accounting policies and system of internal accounting controls are the responsibility of the Board of Directors acting through the Audit Committee. The Audit Committee met during the year to review the scope of the internal audit functions and the scope of work of the statutory auditors, and the results arising therefrom, including their evaluation of the system of internal controls. The Audit Committee also reviewed the assistance given by the Company’s offi cers to the auditors. The consolidated fi nancial statements of the Group and the fi nancial statements of the Company were reviewed by the Audit Committee prior to their submission to the directors of the Company for adoption.

In addition, the Audit Committee has reviewed the requirements for approval and disclosure of interested person transactions, reviewed the procedures set up by the Group and the Company to identify and report and where necessary, seek approval for interested person transactions and, with the assistance of the internal auditors, reviewed interested person transactions.

The Audit Committee has recommended to the Board of Directors that the auditors, Ernst & Young, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.

AuditorsErnst & Young have expressed their willingness to accept re-appointment as auditors of the Company.

On behalf of the Board of Directors

Peter Seah Lim Huat Tan Pheng HockDirector Director

Singapore7 January 2005


Statement by Directors

We, Peter Seah Lim Huat and Tan Pheng Hock, being directors of Singapore Technologies Engineering Ltd, do hereby state that in the opinion of the Directors:

(a) the fi nancial statements set out on pages 113 to 186 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2004, and changes in equity of the Company and of the Group, the results of the business and cash fl ows of the Group for the year ended on that date; and

(b) at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the Board of Directors

Peter Seah Lim Huat Tan Pheng HockDirector Director




Auditors’ Report

Auditors’ Report to the Members of Singapore Technologies Engineering Ltd.

We have audited the accompanying fi nancial statements of Singapore Technologies Engineering Ltd (the “Company”) and its subsidiary companies (the “Group”) set out on pages 113 to 186 for the year ended 31 December 2004. These fi nancial statements are the responsibility of the Company’s directors. Our responsibility is to express an opinion on these fi nancial statements based on our audit.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by the directors, as well as evaluating the overall fi nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion,

(a) the consolidated fi nancial statements of the Group and the balance sheet and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2004 and changes in equity of the Group and of the Company, the results and cash fl ows of the Group for the fi nancial year ended on that date; and

(b) the accounting and other records required by the Act to be kept by the Company and by those subsidiary companies incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

ERNST & YOUNGCertifi ed Public Accountants



Balance Sheetsas at 31 December 2004(Currency – Singapore dollars)

Group Company Note 2004 2003 2004 2003 $’000 $’000 $’000 $’000

Share capital and reservesShare capital 3 289,217 288,603 289,217 288,603Share premium 4 76,602 67,557 76,602 67,557Capital reserve 5 115,948 115,948 – –Foreign currency translation reserve (7,594) 726 – –Statutory reserve 6 333 205 – –Unappropriated profi t 7 883,903 851,488 359,426 327,921 1,358,409 1,324,527 725,245 684,081Minority interests 37,936 39,630 – –

1,396,345 1,364,157 725,245 684,081

Fixed assets 8 415,490 419,247 452 136Subsidiaries 9 – – 326,091 326,091Associated companies and joint ventures 10 267,992 196,720 50 –Long-term investments 11 48,433 36,081 – –Intangible assets 12 56,204 58,165 – –Long-term receivables 13 19,394 815 – –Deferred tax assets 14 84,772 85,069 – –

Current assets Stocks and work-in-progress 15 679,008 640,483 – –Debtors, deposits and prepayments 16 1,660,064 1,603,464 255,540 155,475Long-term receivables, current 13 735 889 183 3Other assets 17 17,202 20,325 – –Amounts under fund management 18 250,000 214,661 – 8,535Bank balances and other liquid funds 19 558,249 846,361 182,717 240,939

3,165,258 3,326,183 438,440 404,952Current liabilities Advance payments from customers, current 404,610 468,951 – –Creditors and accruals 24 1,159,603 1,182,201 32,622 41,696Provisions 25 168,329 173,186 – –Progress billings in excess of work-in-progress 15 151,864 119,441 – –Provision for taxation 200,248 195,881 7,005 5,318Short-term bank loans (unsecured) 26 128,798 132,303 – –Lease obligations, current 27 1,760 1,653 – –Long-term bank loans, current 31 864 1,968 – –Bank overdrafts 356 421 – –

2,216,432 2,276,005 39,627 47,014Net current assets 948,826 1,050,178 398,813 357,938Non-current liabilities Advance payments from customers, non-current 411,456 447,466 – –Deferred income 29 2,055 2,346 – –Deferred tax liabilities 30 4,654 4,566 161 84Provision for staff retirement benefi ts 284 324 – –Lease obligations, non-current 27 13,000 15,028 – –Long-term bank loans, non-current 31 13,317 12,388 – –

1,396,345 1,364,157 725,245 684,081

The accompanying notes are an integral part of the fi nancial statements.



Group Note 2004 2003 $’000 $’000

Turnover 32 2,948,127 2,818,989 Cost of sales (2,294,152) (2,143,804)

Gross profi t 653,975 675,185 Other operating income 33 46,447 37,940Distribution and selling expenses (60,310) (73,265)Administrative expenses (203,010) (217,550)Other operating expenses (49,638) (65,998)

Profi t from operations 34 387,464 356,312

Other income, net 36 8,765 13,282Financial expenses 37 (4,182) (2,216)

392,047 367,378Share of results of associated companies and joint ventures 58,386 47,324Amortisation of goodwill on acquisition of associated companies – (2,005)

Profi t before taxation 450,433 412,697 Taxation 38 (87,056) (86,759)

Profi t after taxation 363,377 325,938 Minority interests (4,992) (355)

Net profi t attributable to shareholders 358,385 325,583

Earnings per share (cents) 40 Basic 12.40 11.29 Diluted 12.36 11.27


Statement of Profi t and Loss for the year ended 31 December 2004

(Currency – Singapore dollars)


Foreign currency Share Share Capital translation Statutory Unappropriated capital premium reserve reserve reserve profi t Total $’000 $’000 $’000 $’000 $’000 $’000 $’000

The Group As at 1.1.2003 288,395 65,071 115,948 6,641 108 975,908 1,452,071Foreign currency translation differences – – – (5,915) – – (5,915)Issue of shares 208 2,486 – – – – 2,694Net profi t for the year – – – – – 325,583 325,583Dividends (Note 39) – – – – – (449,906) (449,906)Transfer from unappropriated profi t to statutory reserve – – – – 97 (97) –

As at 31.12.2003 288,603 67,557 115,948 726 205 851,488 1,324,527

As at 1.1.2004 – as previously stated 288,603 67,557 115,948 726 205 851,488 1,324,527– change in accounting policy (Note 2b) – – – – – 650 650

– as restated 288,603 67,557 115,948 726 205 852,138 1,325,177Foreign currency translation differences – – – (8,320) – – (8,320)Issue of shares 614 9,045 – – – – 9,659Net profi t for the year – – – – – 358,385 358,385Dividends (Note 39) – – – – – (326,492) (326,492)Transfer from unappropriated profi t to statutory reserve – – – – 128 (128) –

As at 31.12.2004 289,217 76,602 115,948 (7,594) 333 883,903 1,358,409

Share Share Unappropriated capital premium profi t Total $’000 $’000 $’000 $’000

The Company As at 1.1.2003 288,395 65,071 450,472 803,938Issue of shares 208 2,486 – 2,694Net profi t for the year – – 327,355 327,355Dividends (Note 39) – – (449,906) (449,906)

As at 31.12.2003 288,603 67,557 327,921 684,081

As at 1.1.2004 288,603 67,557 327,921 684,081Issue of shares 614 9,045 – 9,659Net profi t for the year – – 357,997 357,997Dividends (Note 39) – – (326,492) (326,492)

As at 31.12.2004 289,217 76,602 359,426 725,245


for the year ended 31 December 2004(Currency – Singapore dollars)

Statements of Changes in Equity



2004 2003 $’000 $’000

Cash fl ows from operating activities Profi t before taxation including share of results of associated companies and joint ventures 450,433 412,697Adjustments: Share of results of associated companies and joint ventures (58,386) (47,324) Depreciation of fi xed assets 77,691 86,445 Provision for impairment in value of short-term investment – 289 (Write-back of provision)/provision for impairment in value of long-term investments (1,965) 8,069 Fixed assets written off 441 2,451 Impairment of fi xed assets 796 1,112 Profi t on disposal of fi xed assets (265) (3,711) Profi t on disposal of investments (1,151) (2,385) Profi t on disposal of joint ventures – (30) Loss on dilution of interest in subsidiaries 285 – Profi t on maturity of amounts under fund management (13,094) (7,080) Provision for impairment of investment in associated companies 2,325 674 Write-back of provision for impairment of amounts under fund management (570) (10,036) Provision for loan to an investee company 822 – Interest expense 4,182 2,216 Interest income (19,326) (18,478) Dividends from investments (2,372) (2,571) Impairment of goodwill 158 – Amortisation of goodwill, net – 4,538 Amortisation of commercial and intellectual property rights 802 614

Operating profi t before working capital changes 440,806 427,490(Increase)/decrease in working capital: Stocks and work-in-progress (38,089) 15,989 Progress billings in excess of work-in-progress 32,423 (60,712) Assets held for disposal 3,154 7,841 Trade debtors (74,234) 2,352 Advance payments to suppliers 7,884 9,071 Other debtors, deposits and prepayments (5,544) 12,041 Holding company and related corporations balances 3,532 (888) Associated companies (243) 7,364 Joint ventures (10,835) (11,959) Trade creditors 28,724 47,009 Advance payments from customers (100,351) (172,670) Other creditors, accruals and provisions (54,990) (17,108) Loans to staff and third parties, net of repayments 547 326

Cash generated from operations 232,784 266,146Interest received 18,521 19,795Income tax paid (71,532) (68,482)Deferred income (263) (144)Exchange difference on operating activities (5,084) (6,561)

Net cash from operating activities 174,426 210,754

Consolidated Statement of Cash Flows for the year ended 31 December 2004



2004 2003 $’000 $’000

Cash fl ows from investing activities Proceeds from sale of fi xed assets 3,623 14,782Proceeds from sale of associated companies and joint ventures – 30Dividends from associated companies 31,956 53,339Dividends from investments 2,372 2,544Proceeds from sale and maturity of investments 35,717 71,821Purchase of fi xed assets (83,907) (61,950)Purchase of investments (69,969) (18,975)Proceeds from capital redemption of long-term investments 2,211 11,654Loan to an investee company (6,540) (886)Additional investment/acquisition of associated companies and joint ventures (50,250) (7,555)Acquisition of subsidiaries – (62,289)Acquisition of additional interest in subsidiaries (8,361) – Acquisition of non-current investments (8) (3,651)Dilution of interest in subsidiaries (116) – Loans to associated companies and joint ventures (241) – Exchange difference on investing activities 8,751 4,452

Net cash (used in)/from investing activities (134,762) 3,316

Cash fl ows from fi nancing activities Capital contribution from minority shareholders of a subsidiary 5,201 1,213Proceeds from issue of shares 9,659 2,689Loan from minority shareholders 230 915Repayment of lease obligations (2,093) (1,661)Proceeds from short-term bank loans, net of repayment 3,062 54,221Dividend paid to shareholders of the Company (326,492) (449,906)Dividend paid to minority shareholders of subsidiaries (2,733) (2,897)Interest paid (3,675) (2,149)Exchange difference on fi nancing activities (5,135) (1,495)

Net cash used in fi nancing activities (321,976) (399,070)

Net decrease in cash and cash equivalents (282,312) (185,000)Cash and cash equivalents at beginning of year 1,801,892 1,987,321Exchange difference on cash and cash equivalents at beginning of year (3,919) (429)

Cash and cash equivalents at end of year (Note 42) 1,515,661 1,801,892

Consolidated Statement of Cash Flowsfor the year ended 31 December 2004(Currency – Singapore dollars)



Summary of Effect on Dilution of Interest in Subsidiaries:The effect of dilution of interest in subsidiaries for the fi nancial year ended 31 December 2004 is as follows:

$’000

Goodwill 310Fixed assets 183Current assets 2,694Current liabilities (1,486)Non-current liabilities (35)

Net assets disposed 1,666Minority interests (1,162)Loss on dilution of interest in subsidiaries 285

789Reclassifi ed to associated company (673)

Net cash outfl ow on dilution of interest in subsidiaries 116


Consolidated Statement of Cash Flows for the year ended 31 December 2004



31 December 2004(Currency – Singapore dollars unless otherwise stated)

Notes to the Financial Statements

These notes form an integral part of and should be read in conjunction with the accompanying fi nancial statements.

1. GeneralThe Company is a public limited company domiciled and incorporated in Singapore. The address of the Company’s registered offi ce and principal place of business is 51 Cuppage Road #09-08 Singapore 229469.

The Company’s immediate and ultimate holding company is Temasek Holdings (Private) Limited (“Temasek”), a company incorporated in Singapore. Prior to 31 December 2004, the Company’s immediate holding company was Singapore Technologies Pte Ltd (“STPL”), a company incorporated in Singapore. Pursuant to a restructuring between Temasek and STPL which was completed on 31 December 2004, substantially all of the assets of STPL (including ordinary shares in the capital of the Company) were transferred by STPL to Temasek. On completion, STPL ceased to be the immediate holding company of the Company with effect from 31 December 2004.

The principal activities of the Company, are those of an investment holding company and the provision of engineering and related services. The principal activities of the subsidiaries are set out in Note 9 to the fi nancial statements.

The fi nancial statements of Singapore Technologies Engineering Ltd and the consolidated fi nancial statements of Singapore Technologies Engineering Ltd and its subsidiaries as at 31 December 2004 and for the year then ended were authorised and approved by the Board of Directors for issuance on 7 January 2005.

The Group and Company employed 11,619 and 57 (2003: 11,748 and 48) employees as at 31 December 2004, respectively.

2. Summary of signifi cant accounting policies (a) Basis of fi nancial statements preparation

The fi nancial statements, expressed in Singapore dollars, are prepared in accordance with Singapore Financial Reporting Standards (“FRS”) as required by the Singapore Companies Act, Chapter 50.

The fi nancial statements have been prepared on the historical cost convention, modifi ed by the revaluation of certain fi xed assets.

The accounting policies have been consistently applied by the Company and the Group and except for changes in accounting policies discussed below, are consistent with those used in the previous year.

(b) Basis of consolidation(i) The consolidated fi nancial statements include the fi nancial statements of the Company and its subsidiaries made

up to the end of the fi nancial year. The results of subsidiaries acquired or disposed of during the fi nancial year are included from the effective date of acquisition or up to the effective date of disposal. All signifi cant intercompany balances and transactions are eliminated on consolidation.

In the consolidated fi nancial statements, subsidiaries are accounted for using the purchase method, except for the Company’s interests in Singapore Technologies Aerospace Ltd, Singapore Technologies Electronics Limited, Singapore Technologies Kinetics Ltd, and Singapore Technologies Marine Ltd [collectively referred to as the “Scheme Companies”] which resulted from the amalgamation of the Scheme Companies pursuant to a scheme of arrangement under Section 210 of the Companies Act, Chapter 50 (“the Act”) in 1997.

As the amalgamation of the Scheme Companies constitutes a uniting of interests, the pooling of interests method has been adopted in the preparation of the consolidated fi nancial statements in connection with the amalgamation.



Notes to the Financial Statements31 December 2004


2. Summary of signifi cant accounting policies (continued) (b) Basis of consolidation (continued)

Under the pooling of interests method, the combined assets, liabilities and reserves of the pooled enterprises are recorded at their existing carrying amounts at the date of amalgamation. The excess or defi ciency of amount recorded as share capital issued (plus any additional consideration in the form of cash or other assets) over the amount recorded for the share capital acquired is recorded as merger reserve. The merger reserve had been utilised in prior years to partially write off the goodwill on acquisition of Founders Industries Pte Ltd and its subsidiaries.

(ii) The Group adopts the equity method to account for its interests in associated companies and joint ventures.

The Group’s share of the post-acquisition results of associated companies and joint ventures is included in the consolidated profi t and loss account. The Group’s share of the post-acquisition accumulated profi ts and reserves of associated companies and joint ventures is included in the carrying value of the investments in the consolidated balance sheet.

For this purpose, the audited fi nancial statements of the associated companies and joint ventures are used. Where audited fi nancial statements are not available, the share of results is arrived at from the last audited fi nancial statements available and unaudited management fi nancial statements to the end of the accounting period.

(iii) Goodwill or reserve on consolidation represents the excess or defi ciency of the purchase consideration over the fair value (assigned by the directors) of the underlying net assets of the subsidiaries, associated companies and joint ventures at the date of acquisition. Prior to 1 January 2004, goodwill arising on consolidation was capitalised and amortised on a straight-line basis to the consolidated profi t and loss account over a period up to a maximum of 20 years. Negative goodwill (i.e. the excess of the fair value of the net identifi able assets acquired over the cost of acquisition) that does not relate to identifi able expected future losses and expenses that can be measured reliably at the date of acquisition and does not exceed the fair values of acquired identifi able non-monetary assets was recognised as income on a systematic basis over the remaining weighted average useful life of the identifi able acquired depreciable/amortisable assets. Negative goodwill in excess of the fair values of the non-monetary assets acquired was recognised immediately in the profi t and loss account.

Change in accounting policy With effect from 1 January 2004, the Group has changed its accounting policy to early adopt Financial Reporting

Standard 103: Business Combinations (“FRS 103”). The early adoption of FRS 103 also requires the early adoption of revised Financial Reporting Standard 36: Impairment of Assets (“FRS 36”) and revised Financial Reporting Standard 38: Intangible Assets (“FRS 38”). The early adoption of the above FRSs resulted in a change in the accounting treatment for goodwill during the year. FRS 103 requires goodwill acquired in a business combination to be measured at cost less any accumulated impairment losses. Goodwill shall no longer be amortised, instead, impairment is tested annually, or more frequently if events or changes in circumstances indicate that the goodwill might be impaired.

The effect of the early adoption of FRS 103, together with the revised FRS 36 and revised FRS 38, resulted in the following adjustments:

• For the year ended 31 December 2004, the early adoption of FRS 103 has eliminated a potential goodwill amortisation to the Statement of Profi t and Loss of $8.8 million. However, an impairment loss of $0.2 million was charged to the Statement of Profi t and Loss during the year; and

• Restatement of the Group’s opening retained earnings as at 1 January 2004 of $0.65 million, arising from the de-recognition of previously recognised negative goodwill.




2. Summary of signifi cant accounting policies (continued) (b) Basis of consolidation (continued)

(iv) In the preparation of the consolidated fi nancial statements, the balance sheets of foreign subsidiaries, associated companies and joint ventures are translated into Singapore dollars at rates of exchange ruling at the balance sheet date except for share capital and reserves which are translated at historical rates of exchange. Operating results are translated at average rates of exchange for the year. Translation differences are taken to the Foreign Currency Translation Reserve.

Goodwill and fair value adjustments arising from the acquisition of a foreign subsidiary are treated as assets or liabilities and translated at exchange rates ruling at the balance sheet date.

(c) Long-term investments(i) Subsidiaries

Subsidiaries are those companies controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the fi nancial and operating policies of a company so as to obtain benefi ts from its activities.

Investments in subsidiaries are stated in the fi nancial statements of the Company at cost, less impairment losses.

(ii) Associated companies and joint venturesAn associated company is a company not being a subsidiary or joint venture, in which the Group has a substantial interest of not less than 20 percent of the equity and in whose fi nancial and operating policy decisions the Group exercises signifi cant infl uence.

A joint venture is a company, not being a subsidiary or associated company, in which the Group has a long-term interest of not more than 50 percent of the equity and has joint control over the investee company’s fi nancial and operating policies.

Investments in associated companies and joint ventures are stated in the fi nancial statements of the Company at cost, less impairment losses.

(iii) Other long-term investmentsOther investments held for long-term purposes are stated at cost. Distributions from unquoted equity investments of a venture fund or a limited partnership nature are treated as reductions in investment costs until the costs are fully recovered, after which the distributions are recognised as income.

(iv) Quoted investmentsQuoted investments excluding quoted bonds, are stated at the lower of cost and market value determined on a portfolio basis.

Quoted bonds held on a long-term basis are stated at the lower of cost, adjusted for amortisation of premiums and accretion of discounts, and market value determined on a portfolio basis.

Provision for impairment in value of long-term investments (other than quoted investments) is made when, in the opinion of the directors, there has been a decline, other than a temporary decline in the value of the investments.

(d) Short-term investments(i) Short-term investments, excluding bonds, are stated at the lower of cost and market value determined on a

portfolio basis. Cost is determined on the weighted average method.





2. Summary of signifi cant accounting policies (continued) (d) Short-term investments (continued)

(ii) Bonds are stated at the lower of cost, adjusted for the amortisation of premium and accretion of discount, and market value determined on a portfolio basis. Cost is determined on the weighted average method.

Premium or discount on purchase of investment is amortised over the period of investment.

(e) Amounts under fund managementAmounts under fund management are stated at the principal sums net of impairment loss and/or provision for impairment in value on an individual fund basis. Provision for impairment in value is made up to the non-guaranteed returns of the principal sums by the fund managers when the market value of the fund is below cost.

(f) Fixed assets and depreciationFixed assets are stated at cost or valuation, net of depreciation and any impairment loss. Depreciation is provided on the straight-line basis so as to write off the cost of these assets over their estimated useful lives as follows:

Freehold land and buildings – 15 to 30 yearsLeasehold land and buildings – Over the period of the lease of between 6.25 to 30 yearsBuildings on rented properties – 30 yearsImprovements to premises – 3 to 30 yearsWharves and slipways – 10 to 16 yearsSyncrolift and fl oating docks – 10 yearsBoats and barges – 5 yearsPlant and machinery – 2 to 10 yearsProduction tools and equipment – 3 to 10 yearsFurniture, fi ttings, offi ce equipment and computers – 1 to 5 yearsTransportation equipment and vehicles – 4 to 5 yearsAircraft and aircraft engines – 5 to 15 years

Low value assets costing less than $1,000 individually are written off to the profi t and loss account.

Construction-in-progress is not depreciated until each stage of development is completed and becomes operational.

Assets purchased specifi cally for projects are depreciated over the useful life of the class of assets or the duration of the project, whichever is shorter.

(g) Stocks and work-in-progressStocks are stated at the lower of cost (principally on the fi rst-in, fi rst-out basis) and net realisable value. Provision is made for deteriorated, damaged, obsolete and slow-moving stocks.

Work-in-progress is valued at cost less progress payments received and receivable. Cost includes all direct material and labour costs, equipment and sub-contracting services, together with appropriate overhead expenses. Provision for foreseeable losses on uncompleted contracts is made in the year in which such losses are determined.

(h) Trade and other debtorsTrade and other debtors are recognised and carried at original invoiced amount less provision for doubtful debts.

Known bad debts are written off. Specifi c provisions are made for accounts considered to be doubtful.




2. Summary of signifi cant accounting policies (continued) (i) Cash and cash equivalents

Cash consists of cash on hand and cash with banks or fi nancial institutions, including fi xed deposits. Cash equivalents are short-term, highly liquid investments and short-term loans to related corporations that are readily convertible to known amounts of cash and that are subject to insignifi cant risk of changes in value.

For the purposes of the cash fl ow statement, cash and cash equivalents are shown net of outstanding bank overdrafts.

(j) Loan receivablesLoan receivables are carried at cost less provision for doubtful loans.

(k) Impairment of assetsFixed assets, intangible assets, associated companies, joint ventures, subsidiary companies and long-term investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in the profi t and loss account for items of fi xed assets, intangible assets, associated companies, joint ventures, subsidiary companies and long-term investments carried at cost. The recoverable amount is the higher of an asset’s net selling price and value in use. The net selling price is the amount obtainable from the sale of an asset in an arm’s length transaction. Value in use is the present value of estimated future cash fl ows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if it is not possible, for the cash-generating unit.

Reversal of an impairment loss recognised in prior years is recorded when there is an indication that the impairment loss recognised for an asset no longer exists or has decreased. The reversal is recorded in income.

(l) Trade and other creditorsTrade and other creditors are carried at cost.

(m) BorrowingsBorrowings are carried at cost net of transaction costs.

Borrowing costs are recognised as expenses in the period in which they are incurred.

(n) ProvisionsProvisions are recognised when the Group has a present obligation (legal or constructive) as a result of past events, it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

(i) WarrantiesThe warranty provision represents the best estimate of the Group’s contractual obligations at the balance sheet date. The provision is based on past experience and industry averages for defective products. The majority of the costs is expected to be incurred over the applicable warranty periods.

(ii) Liquidated DamagesProvision for liquidated damages is made in respect of anticipated claims from customers on contracts of which deadlines are overdue or not expected to be completed on time in accordance with contractual obligations. The utilisation of provisions is dependent on the timing of claims.





2. Summary of signifi cant accounting policies (continued) (o) Deferred taxation

Deferred taxation is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for fi nancial reporting purposes. Deferred tax assets and liabilities are measured using the tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled based on tax rates enacted or substantively enacted at the balance sheet date.

Deferred tax liabilities are recognised for all taxable temporary differences associated with investments in subsidiaries, associated companies and interests in joint ventures, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profi t will be available against which the deductible temporary differences, carry-forward of unused tax assets and unused tax losses can be utilised.

At each balance sheet date, the Group re-assesses unrecognised deferred tax assets and the carrying amount of deferred tax assets. The Group recognises a previously unrecognised deferred tax asset to the extent that it has become probable that future taxable profi t will allow the deferred tax asset to be recovered. The Group conversely reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable that suffi cient taxable profi t will be available to allow the benefi t of part or all of the deferred tax asset to be utilised.

(p) Employee benefi ts(i) Employee equity compensation benefi ts

Pursuant to the ST Engineering Share Option Plan, certain directors and employees are granted non-transferable options to purchase the Company’s shares. There are no charges to the profi t and loss account upon the grant or exercise of options. When the options are exercised, equity is increased by the amount of the proceeds received.

Pursuant to the ST Engineering Performance Share Plan and ST Engineering Restricted Stock Plan (for executives only), the Company’s shares can be awarded to certain employees and directors of the Group. An initial estimate would be made for the cost of compensation under the Performance Share Plan based on the number of shares expected to be awarded at the end of the performance period, valued at market price at the date of grant of the award. The cost is charged to the profi t and loss account on a basis that fairly refl ects the manner in which the benefi ts will accrue to the employee under the plan over the service period to which the performance criteria relate. At each reporting date, the compensation cost is remeasured based on the latest estimate of the number of shares that will be awarded considering the performance criteria and the market price of the shares at the reporting date. Any increase or decrease in compensation cost over the previous estimate is recorded in that reporting period. The fi nal measure of compensation cost is based on the number of shares ultimately awarded and the market price at the date the performance criteria are met.

(ii) PensionsThe Group participates in the national pension schemes as defi ned by the laws of the countries in which it has operations. In particular, the Singapore companies in the Group make contributions to the Central Provident Fund scheme in Singapore, a defi ned contribution pension scheme. Contributions to national pension schemes are recognised as an expense in the period in which the related service is performed.




2. Summary of signifi cant accounting policies (continued) (q) Income recognition

Income is recognised using the following methods:

(i) Income from sale of goods and services rendered is recognised upon delivery of goods/services and acceptance by customers.

(ii) Income from long-term contracts is recognised by reference to stage of completion which is measured by either:

(a) the percentage of costs incurred to estimated total costs to complete the contracts; or

(b) when goods and services, representing part of a contract, are delivered; or

(c) upon completion of designated phases of a contract.

Provision for foreseeable losses on uncompleted contracts is made as soon as such losses are determinable.

(iii) Dividend income is recognised when the shareholder’s rights to receive payment is established.

(iv) Management fee income is recognised on an accrual basis upon which management services are rendered.

(v) For certain subsidiaries, the fi rst 25 percent of the total commission receivable for each contract is treated as downpayment and is deferred and taken up in the profi t and loss account only upon the discharge of specifi ed contractual obligations. Commission income in respect of each contract in excess of the fi rst 25 percent of the total amount receivable is taken up in the profi t and loss account as and when it is billed. For certain back to back contracts, commission income is recognised upon delivery of goods and services.

(vi) Any surplus arising from amounts under fund management can only be determined at the end of the relevant fund management period. Such surplus, if any, will be recognised as income then.

(vii) Finance charges from hire purchase fi nancing is recognised based on the sum of digits method over the fi nance period.

(viii) Interest income is recognised on an accrual basis.

(r) Foreign currency translation(i) The accounting records of the companies in the Group are maintained in their respective measurement

currencies. Transactions in foreign currencies during the fi nancial year are recorded in the respective measurement currencies using exchange rates approximating those ruling at transaction dates, except for hedged transactions, which are recorded at the contracted forward exchange rates.

(ii) Monetary assets and liabilities in foreign currencies, except for foreign currency assets and liabilities hedged by forward exchange contracts, are translated into the respective measurement currencies at rates of exchange approximating those ruling at the balance sheet date. Foreign currency assets and liabilities hedged by forward exchange contracts are translated into the respective measurement currencies at the contracted forward exchange rates. All resultant exchange differences are dealt with through the profi t and loss account.





2. Summary of signifi cant accounting policies (continued) (s) Intangible assets

(i) Research and development expenditureResearch and development expenditure is charged to the profi t and loss account as and when incurred.

(ii) Intellectual property rightsCosts relating to intellectual property rights, which are acquired are capitalised and amortised on a straight-line basis over its estimated economic useful life of not more than 20 years.

(t) Hire purchase and fi nance leases(i) Assets acquired on hire purchase arrangements are capitalised in the fi nancial statements and the corresponding

obligations treated as a liability. The total interest, being the difference between the total instalments payable and the capitalised amount, is charged to the profi t and loss account over the period of such hire purchase arrangements in equal monthly instalments to produce a constant rate of charge on the balance of capital repayments outstanding.

(ii) Finance leases are those leasing agreements which effectively transfer to the Group substantially all the risks and benefi ts incidental to ownership of the lease items. Assets fi nanced under such leases are treated as if they had been purchased outright at the present value of the minimum lease payments and the corresponding leasing commitments are shown as obligations to the lessors. Lease payments are treated as consisting of capital and interest elements and interest is charged to the profi t and loss account over the period of the lease to produce a constant rate of charge on the balance of capital repayments outstanding.

(iii) Assets acquired on hire purchase and fi nance lease arrangements are depreciated in accordance with the policy set out in (f) above.

(u) Operating leasesLeases where the lessor effectively retains substantially all the risks and benefi ts of ownership of the leased asset, are classifi ed as operating leases. Operating lease payments are recognised as an expense in the profi t and loss account on a straight-line basis over the lease term.

The aggregate benefi t of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(v) Government grantsGrants in recognition of specifi c expenses are taken to income in the same year as the relevant expenses. Grants related to depreciable assets are deferred and allocated to income over the period in which such assets are depreciated and used in the projects subsidised by the grants.

(w) Financial instrumentsFinancial assets and fi nancial liabilities carried on the balance sheet include cash and cash equivalents, marketable securities, trade and other accounts receivable and payable, long-term receivables, loans, borrowings and investments. The accounting policies on recognition and measurement of these items are disclosed in the respective accounting policies found in this Note.

(x) SegmentsFor management purposes, the Group is organised on a worldwide basis into four major operating businesses which is the basis on which the Group reports its primary segment information.

Segment revenue, expenses and results include transfers between business segments and between geographical segments. Such transfers are accounted for on an arm’s length basis.




3. Share capital Group and Company 2004 2003 $’000 $’000

Authorised: 4,999,999,999 ordinary shares of $0.10 each and 1 special share of $0.10 each 500,000 500,000

Issued and fully paid: At beginning of the year 2,886,028,628 (2003: 2,883,952,262) ordinary shares of $0.10 each and 1 special share of $0.10 each 288,603 288,395Issued during the year 6,136,280 (2003: 2,076,366) ordinary shares of $0.10 each 614 208

At end of the year 2,892,164,908 (2003: 2,886,028,628) ordinary shares of $0.10 each and 1 special share of $0.10 each 289,217 288,603

Included in share capital is a special share of $0.10 issued to the Minister for Finance (Incorporated). The special share enjoys all the rights attached to the ordinary shares. In addition, the special share carries the right to approve any resolution to be passed by the Company, either in general meeting or by its Board of Directors, on certain matters specifi ed in the Company’s Articles of Association. The special share may be converted at any time into an ordinary share.

During the fi nancial year, the Company issued 6,136,280 (2003: 2,029,386) ordinary shares of $0.10 each for cash at the respective price per share upon the exercise of options granted by the Company under ESOS and ESOP:

Grant No. No. of ordinary shares issued Price per ordinary share $

94R1 45,056 0.56694R5 67,585 0.52296R1 30,175 0.90597R1 15,000 0.42297R2 100,219 0.62997R5 77,059 0.72098R1 978,750 1.39098R3 105,000 1.29099R1 1,738,350 1.4189902 5,000 2.0009902 176,208 2.0002001 10,216 2.2602002 1,517,135 1.8080202N 219 2.2900208N 512,801 1.9200302N 532,423 1.7900308N 223,084 1.8600308P 2,000 1.860





3. Share capital (continued)At the end of the fi nancial year, unissued ordinary shares of $0.10 each of the Company under options granted to eligible employees and directors of the Company are as follows:

(i) Options outstanding under the ESOS/ESOP Numbers of shares 2004 2003

ESOS At beginning of the year 60,623,965 64,030,212Exercised (4,865,753) (2,010,334)Lapsed (2,332,495) (1,395,913)

At end of the year 53,425,717 60,623,965

ESOP At beginning of the year 76,219,734 50,594,995Granted and accepted 28,182,289 27,435,971Exercised (1,270,527) (19,052)Lapsed (3,332,441) (1,792,180)

At end of the year 99,799,055 76,219,734




3. Share capital (continued) (ii) Details of share options

2004Details of share options to subscribe for ordinary shares of $0.10 each pursuant to ESOS are as follows:

Balance as at 1.1.2004 or date Balance No. of Date of of grant Options Options as at holders at Exercise grant if later lapsed exercised 31.12.2004 31.12.2004 price Exercisable period $

9.2.1999 24,480 24,480 – – – 1.418 10.2.2001 to 9.2.2004 6.12.1997 45,056 – 45,056 – – 0.566 18.5.1999 to 28.6.2004 6.12.1997 23,269 23,269 – – – 0.873 18.5.1999 to 7.11.2004 6.12.1997 67,585 – 67,585 – – 0.522 18.5.1999 to 24.12.2004 6.12.1997 34,723 – – 34,723 3 0.905 18.5.1999 to 2.6.2005 6.12.1997 90,113 – – 90,113 1 0.422 18.5.1999 to 17.6.2005 6.12.1997 72,056 – – 72,056 2 0.357 18.5.1999 to 6.12.2005 6.12.1997 84,264 – 30,175 54,089 5 0.905 18.5.1999 to 3.4.2006 6.12.1997 315,396 – – 315,396 2 0.373 18.5.1999 to 30.8.2006 6.12.1997 174,668 – – 174,668 3 0.465 18.5.1999 to 16.10.2006 6.12.1997 422,981 – 15,000 407,981 3 0.422 18.5.1999 to 2.4.2007 6.12.1997 100,235 – 100,219 16 3 0.629 18.5.1999 to 7.4.2007 6.12.1997 262,002 – – 262,002 2 0.492 18.5.1999 to 24.4.2007 6.12.1997 246,589 – 77,059 169,530 3 0.720 11.9.1999 to 9.9.2007 29.4.1998 3,909,750 31,250 978,750 2,899,750 64 1.390 30.4.2000 to 29.4.2008 7.8.1998 470,000 10,000 105,000 355,000 104** 1.290 8.8.2000 to 7.8.2008 9.2.1999 10,478,930 87,420 1,738,350 8,653,160 194** 1.418 10.2.2001 to 9.2.2009 10.8.1999 2,910,380 81,936 176,208 2,652,236 433* 2.000 11.8.2001 to 10.8.2009 10.8.1999 5,000 – 5,000 – – 2.000 11.8.2001 to 10.8.2004 9.2.2000 31,358,488 1,681,140 10,216 29,667,132 591** 2.260 10.2.2002 to 9.2.2010 9.2.2000 1,250,000 – – 1,250,000 2*** 2.260 10.2.2002 to 9.2.2005 9.2.2000 5,941,000 280,000 1,517,135 4,143,865 88 1.808 10.2.2002 to 9.2.2010 6.9.2000 2,337,000 113,000 – 2,224,000 75 2.390 7.9.2002 to 6.9.2010

Total 60,623,965 2,332,495 4,865,753 53,425,717





3. Share capital (continued) Details of share options to subscribe for ordinary shares of $0.10 each pursuant to ESOP are as follows:


19.2.2001 745,000 – – 745,000 14# 2.720 20.2.2002 to 19.2.2006 19.2.2001 10,056,703 412,000 – 9,644,703 904** 2.720 20.2.2002 to 19.2.2011 19.2.2001 225,000 – – 225,000 1*** 2.720 20.2.2002 to 19.2.2006 10.8.2001 13,679,141 614,907 – 13,064,234 975** 2.680 11.8.2002 to 10.8.2011 10.8.2001 452,500 – – 452,500 1*** 2.680 11.8.2002 to 10.8.2006 7.2.2002 611,000 – – 611,000 15# 2.290 8.2.2003 to 7.2.2007 7.2.2002 11,492,190 496,397 219 10,995,574 1,036** 2.290 8.2.2003 to 7.2.2012 12.8.2002 132,000 – – 132,000 2# 1.920 13.8.2003 to 12.8.2007 12.8.2002 11,685,859 415,939 512,801 10,757,119 1,060** 1.920 13.8.2003 to 12.8.2012 6.2.2003 354,500 – – 354,500 16# 1.790 7.2.2004 to 6.2.2008 6.2.2003 12,930,018 484,475 532,423 11,913,120 1,090** 1.790 7.2.2004 to 6.2.2013 11.8.2003 336,250 – – 336,250 17# 1.860 12.8.2004 to 11.8.2008 11.8.2003 13,519,573 488,765 225,084 12,805,724 1,142** 1.860 12.8.2004 to 11.8.2013 9.2.2004 328,200## – – 328,200 16# 2.090 10.2.2004 to 9.2.2009 9.2.2004 13,266,653## 355,294 – 12,911,359 1,138** 2.090 10.2.2004 to 9.2.2014 21.6.2004 100,000## – – 100,000 1 2.000 22.6.2004 to 21.6.2014 10.8.2004 289,200## – – 289,200 16# 2.120 11.8.2004 to 10.8.2009 10.8.2004 14,198,236## 64,664 – 14,133,572 1,292** 2.120 11.8.2004 to 10.8.2014

Total 104,402,023 3,332,441 1,270,527 99,799,055

* Includes 1 executive Director and 1 past Director of the Company** Includes 1 executive Director of the Company*** Includes 1 past Director of the Company# Includes Directors of the Company and its subsidiaries## These numbers relate to options granted and accepted in 2004




3. Share capital (continued) 2003 Details of share options to subscribe for ordinary shares of $0.10 each pursuant to ESOS are as follows:


29.4.1998 36,000 36,000 – – – 1.390 30.4.2000 to 29.4.2003 7.8.1998 5,000 5,000 – – – 1.290 8.8.2000 to 7.8.2003 9.2.1999 24,480 – – 24,480 1 1.418 10.2.2001 to 9.2.2004 6.12.1997 45,056 – – 45,056 1 0.566 18.5.1999 to 28.6.2004 6.12.1997 23,269 – – 23,269 3 0.873 18.5.1999 to 7.11.2004 6.12.1997 67,585 – – 67,585 2 0.522 18.5.1999 to 24.12.2004 6.12.1997 34,723 – – 34,723 3 0.905 18.5.1999 to 2.6.2005 6.12.1997 90,113 – – 90,113 1 0.422 18.5.1999 to 17.6.2005 6.12.1997 92,641 – 20,585 72,056 2 0.357 18.5.1999 to 6.12.2005 6.12.1997 155,164 – 70,900 84,264 6 0.905 18.5.1999 to 3.4.2006 6.12.1997 315,396 – – 315,396 2 0.373 18.5.1999 to 30.8.2006 6.12.1997 251,727 – 77,059 174,668 3 0.465 18.5.1999 to 16.10.2006 6.12.1997 478,566 – 55,585 422,981 3 0.422 18.5.1999 to 2.4.2007 6.12.1997 101,185 – 950 100,235 5 0.629 18.5.1999 to 7.4.2007 6.12.1997 380,160 – 118,158 262,002 2 0.492 18.5.1999 to 24.4.2007 6.12.1997 246,589 – – 246,589 4 0.720 11.9.1999 to 9.9.2007 29.4.1998 4,157,750 – 248,000 3,909,750 89 1.390 30.4.2000 to 29.4.2008 7.8.1998 530,000 – 60,000 470,000 127** 1.290 8.8.2000 to 7.8.2008 9.2.1999 11,553,120 400 1,073,790 10,478,930 257** 1.418 10.2.2001 to 9.2.2009 10.8.1999 2,968,380 48,693 9,307 2,910,380 480* 2.000 11.8.2001 to 10.8.2009 10.8.1999 5,000 – – 5,000 1 2.000 11.8.2001 to 10.8.2004 9.2.2000 32,139,308 780,820 – 31,358,488 622** 2.260 10.2.2002 to 9.2.2010 9.2.2000 1,250,000 – – 1,250,000 2*** 2.260 10.2.2002 to 9.2.2005 9.2.2000 6,566,000 349,000 276,000 5,941,000 149 1.808 10.2.2002 to 9.2.2010 6.9.2000 2,513,000 176,000 – 2,337,000 79 2.390 7.9.2002 to 6.9.2010

Total 64,030,212 1,395,913 2,010,334 60,623,965





3. Share capital (continued) Details of share options to subscribe for ordinary shares of $0.10 each pursuant to ESOP are as follows:


19.2.2001 745,000 – – 745,000 14# 2.720 20.2.2002 to 19.2.2006 19.2.2001 10,343,485 286,782 – 10,056,703 953** 2.720 20.2.2002 to 19.2.2011 19.2.2001 225,000 – – 225,000 1*** 2.720 20.2.2002 to 19.2.2006 10.8.2001 14,128,533 449,392 – 13,679,141 1,032** 2.680 11.8.2002 to 10.8.2011 10.8.2001 452,500 – – 452,500 1*** 2.680 11.8.2002 to 10.8.2006 7.2.2002 611,000 – – 611,000 15# 2.290 8.2.2003 to 7.2.2007 7.2.2002 11,879,224 387,034 – 11,492,190 1,096** 2.290 8.2.2003 to 7.2.2012 12.8.2002 132,000 – – 132,000 2# 1.920 13.8.2003 to 12.8.2007 12.8.2002 12,078,253 373,342 19,052 11,685,859 1,120** 1.920 13.8.2003 to 12.8.2012 6.2.2003 354,500## – – 354,500 16# 1.790 7.2.2004 to 6.2.2008 6.2.2003 13,176,142## 246,124 – 12,930,018 1,149** 1.790 7.2.2004 to 6.2.2013 11.8.2003 336,250## – – 336,250 17# 1.860 12.8.2004 to 11.8.2008 11.8.2003 13,569,079## 49,506 – 13,519,573 1,203** 1.860 12.8.2004 to 11.8.2013

Total 78,030,966 1,792,180 19,052 76,219,734

* Includes 1 executive Director and 1 past Director of the Company** Includes 1 executive Director of the Company*** Includes 1 past Director of the Company# Includes Directors of the Company and its subsidiaries## These numbers relate to options granted and accepted in 2003

(iii) Details of share options exercised Exercise Proceeds from No. of shares price share issue Share price $ $’000 $

2004 January to March 3,274,394 0.629 – 2.260 5,200 2.04 – 2.16April to June 363,004 0.422 – 2.000 543 1.91 – 2.11July to September 1,221,967 1.290 – 2.290 1,953 2.02 – 2.17October to December 1,276,915 0.422 – 2.260 1,963 2.02 – 2.33

6,136,280

2003 January to March 518,309 0.357 – 1.418 579 1.68 – 1.81April to June 305,138 0.492 – 1.808 307 1.60 – 1.79July to September 587,518 0.629 – 2.000 855 1.79 – 1.99October to December 618,421 1.290 – 2.000 948 1.93 – 2.06

2,029,386




4. Share premiumThe share premium account may be applied only for the purposes specifi ed in the Companies Act. The balance is not available for distribution of dividends except in the form of shares.

During the fi nancial year, the movement in the share premium account arises from the issuance of 6,136,280 (2003: 2,029,386) ordinary shares of $0.10 each at between $0.422 and $2.290 (2003: $0.357 and $2.000) per share for cash upon the exercise of options under the ESOS/ESOP.

5. Capital reserveThis amount relates to share premium of the respective pooled enterprises, namely Singapore Technologies Aerospace Ltd, Singapore Technologies Electronics Limited, Singapore Technologies Kinetics Ltd and Singapore Technologies Marine Ltd classifi ed as capital reserve upon the pooling of interests during the fi nancial year ended 31 December 1997.

6. Statutory reserveTwo subsidiaries follow the accounting principles and relevant fi nancial regulations of the People’s Republic of China (“PRC GAAP”) applicable to wholly foreign-owned enterprises and Sino-foreign equity joint venture enterprises in the preparation of the accounting records and statutory fi nancial statements. The subsidiaries are required to appropriate 10% of the profi t arrived at under PRC GAAP for each year to a statutory reserve. The appropriation to statutory reserve must be made before distribution of dividends to shareholders. The appropriation is required until the statutory reserve reaches 50% of the registered capital of the subsidiary. The statutory reserve can only be used, upon approval by the relevant authority, to offset accumulated losses or increase capital.

7. Unappropriated profi t Group 2004 2003 $’000 $’000

Retained by: The Company 359,426 327,921Subsidiaries 435,036 454,671Associated companies and joint ventures 89,441 68,896

883,903 851,488





8. Fixed assets The Group Valuation/Cost

Arising from dilution of As at interest in Translation As at 1.1.2004 Additions Disposals subsidiaries Reclassifi cations difference 31.12.2004 $’000 $’000 $’000 $’000 $’000 $’000 $’000 At 1972 Valuation Leasehold land and buildings 1,919 – – – – – 1,919 Wharves and slipways 1,490 – – – – – 1,490 Syncrolift and fl oating docks 4,603 – – – – – 4,603 Plant and machinery 1,694 – – – – – 1,694 Furniture, fi ttings, offi ce equipment and computers 279 – – – – – 279

At Cost Freehold land and buildings 53,720 138 (7) – (1,572) (1,913) 50,366 Leasehold land and buildings 400,623 11,449 (2,876) – 8,860 (1,712) 416,344 Buildings on rented properties 37,347 10,075 – – 2,826 – 50,248 Improvements to premises 28,906 1,556 (146) (121) (229) (606) 29,360 Wharves and slipways 19,631 123 – – 71 – 19,825 Syncrolift and fl oating docks 68,781 – – – – – 68,781 Boats and barges 5,620 – (76) – – (86) 5,458 Plant and machinery 333,885 25,899 (10,389) – (1,116) (3,426) 344,853 Production tools and equipment 126,037 12,388 (1,406) – (823) (526) 135,670 Furniture, fi ttings, offi ce equipment and computers 130,778 9,742 (12,095) (229) 3,528 (280) 131,444 Transportation equipment and vehicles 10,904 1,422 (1,399) (20) 13 (34) 10,886 Aircraft and aircraft engines 40,339 – – – – – 40,339 Construction-in- progress 6,150 11,115 – – (12,507) (113) 4,645

1,272,706 83,907 (28,394) (370) (949) (8,696) 1,318,204




8. Fixed assets (continued)

The Group Accumulated depreciation

Arising from Depreciation dilution of As at charge for Impairment interest in Translation As at 1.1.2004 the year loss subsidiaries Disposals Reclassifi cations difference 31.12.2004 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 At 1972 Valuation Leasehold land and buildings 1,919 – – – – – – 1,919 Wharves and slipways 1,490 – – – – – – 1,490 Syncrolift and fl oating docks 4,603 – – – – – – 4,603 Plant and machinery 1,694 – – – – – – 1,694 Furniture, fi ttings, offi ce equipment and computers 279 – – – – – – 279 At Cost Freehold land and buildings 5,818 1,587 – – (2) (104) (229) 7,070 Leasehold land and buildings 204,051 17,819 – – (68) – (603) 221,199 Buildings on rented properties 18,043 1,373 – – – – – 19,416 Improvements to premises 8,864 4,121 – (64) (134) (197) (116) 12,474 Wharves and slipways 13,455 1,058 – – – – (1) 14,512 Syncrolift and fl oating docks 51,490 5,992 – – – – – 57,482 Boats and barges 3,942 742 – – (20) (45) 4,619 Plant and machinery 288,268 18,193 796 – (9,658) (2,281) (2,706) 292,612 Production tools and equipment 107,037 10,074 – – (1,387) (447) (339) 114,938 Furniture, fi ttings, offi ce equipment and computers 114,991 10,836 – (108) (12,030) 2,865 (208) 116,346 Transportation equipment and vehicles 8,867 868 – (15) (1,296) (14) (25) 8,385 Aircraft and aircraft engines 18,648 5,028 – – – – – 23,676

853,459 77,691 796 (187) (24,595) (178) (4,272) 902,714






The Group Depreciation charge Net book value 2003 2004 2003 $’000 $’000 $’000

At 1972 Valuation Leasehold land and buildings – – – Wharves and slipways – – – Syncrolift and fl oating docks – – – Plant and machinery – – – Furniture, fi ttings, offi ce equipment and computers – – – At Cost Freehold land and buildings 1,266 43,296 47,902Leasehold land and buildings 20,550 195,145 196,572Buildings on rented properties 1,160 30,832 19,304Improvements to premises 3,480 16,886 20,042Wharves and slipways 1,025 5,313 6,176Syncrolift and fl oating docks 7,631 11,299 17,291Boats and barges 576 839 1,678Plant and machinery * 21,364 52,241 45,617Production tools and equipment 12,295 20,732 19,000Furniture, fi ttings, offi ce equipment and computers 12,233 15,098 15,787Transportation equipment and vehicles 954 2,501 2,037Aircraft and aircraft engines 3,911 16,663 21,691Construction-in-progress – 4,645 6,150

86,445 415,490 419,247

* The net book value of fi xed assets amounting to $771,000 (2003: $423,000) were reclassifi ed to other assets due to changes in the use of these assets (Note 17).





The Company At Cost

As at As at 1.1.2004 Additions 31.12.2004 $’000 $’000 $’000

Furniture, fi ttings, offi ce equipment and computers 728 143 871 Transportation equipment and vehicles – 298 298

728 441 1,169

Accumulated depreciation

Depreciation As at charge As at 1.1.2004 for the year 31.12.2004 $’000 $’000 $’000

Furniture, fi ttings, offi ce equipment and computers 592 120 712 Transportation equipment and vehicles – 5 5

592 125 717

Depreciation charge Net book value 2003 2004 2003 $’000 $’000 $’000

Furniture, fi ttings, offi ce equipment and computers 155 159 136Transportation equipment and vehicles – 293 –

155 452 136

Included in the above are fi xed assets acquired under fi nance leases with a net book value of: Group 2004 2003 $’000 $’000

Leasehold land and buildings 4,166 4,841Furniture, fi ttings, offi ce equipment and computers 69 189

4,235 5,030





8. Fixed assets (continued) The Group

(a) Assets which are shown at valuation are stated at values arrived at by an independent fi rm of professional valuers on 30 November 1972, on the basis of open market value for existing use. There is no fi xed frequency of revaluation. Revaluation will be performed as and when deemed appropriate by the Directors.

(b) The major properties of the Group comprise:

(i) Freehold land and buildings Net book value Location Description Land area 2004 2003 (sq. m.) $’000 $’000

Malaysia Awana Chalet 8th mile, Genting Highlands, Staff recreation and 117 130 16269000 Genting Highlands, Pahang apartment unit USA 7801 Trinity Drive, Escatawpa, Mississippi Shipyard and buildings 839,564 6,654 7,035 5801 Elder Ferry Road, Moss Point, Mississippi Shipyard and buildings 227,151 6,007 6,354 900 Bayou Casotte Parkway, Pascagoula, Shipyard and buildings 331,803 24,042 25,712Mississippi 3800 Richardson Road, South, Hope Hull, Production facility 8,361 5,105 5,365AL 36043

(ii) Leasehold land and buildings Net book value Location Description Tenure Land area 2004 2003 (sq. m.) $’000 $’000

Singapore 501 Airport Road Factory and offi ce building 20 years from 1.6.1993 23,899 4,098 4,401 503 Airport Road Factory and offi ce building 20 years from 1.6.1993 7,175 1,188 1,388 540 Airport Road Warehouse and offi ce 30 years from 15.8.1985 5,850 1,662 1,817 building Hangar and offi ce building 30 years from 1.1.1984 18,918 4,950 5,457 8 Changi North Way Hangar and offi ce building 30 years from 1.1.1992 75,713 42,267 44,751 Hangar and offi ce building 22.5 years from 16.6.1999 14,860 4,085 4,325

24 Ang Mo Kio Industrial and commercial 30 years from 1.12.1982, 23,970 13,239 14,663Street 65 buildings renewable to 2042 100 Jurong East Industrial and commercial 30 years from 1.11.1988, 11,232 9,338 –Street 21 buildings renewable to 2048




8. Fixed assets (continued)(ii) Leasehold land and buildings (continued)

Net book value Location Description Tenure Land area 2004 2003 (sq. m.) $’000 $’000

Singapore 5 Portsdown Road Industrial and commercial 3 years from 1.12.2002, 88,400 1,240 1,661 buildings renewable to 2010 5 Ubi Close Car showroom cum 30 years from 1.8.1994 6,274 18,037 19,310 workshop 33 Tuas Avenue 2 Factory and offi ce building 30 years from 1.4.1996 6,669 3,114 3,261 16 Benoi Crescent Industrial and commercial 30 years from 16.7.1989 6,981 3,926 4,200 buildings 249 Jalan Boon Lay Industrial and commercial 27 years from 1.10.2001 120,000 8,505 9,316 buildings to 31.12.2028 (renewable to 10.10.2065) 2D Ayer Rajah Industrial and commercial 3 years from 1.4.2004 29,404 – 688Crescent buildings to 31.3.2007 16 Tuas Avenue 7 Industrial buildings 30 years from 16.8.1983 12,029 1,663 1,815 601 Rifl e Range Road Industrial buildings Renewable every year * 1,380,983 3,451 4,782 15 Chin Bee Drive Industrial building 60 years from 1.8.1973 39,640 4,967 5,784 7 Benoi Road Buildings, foreshore 56 years from 1.6.1969 103,802 21,194 22,831 and workshops 60 Tuas Road Buildings, foreshore and 30 years from 1.12.1992 125,262 7,590 11,073 workshops

USA 2100 9th Street Hangar and offi ce building 22 years from 1.1.1991 103,825 25,592 18,303Brookley Complex, Mobile, Alabama 9800 John Saunders Hangars and offi ce building 16 7/12 years from 195,663 11,668 13,421Road, San Antonio, 1.6.2002 Texas

People’s Republic of China 555 Kanghua Road, Industrial building 50 years from 12.6.2003 15,890 4,122 4,504Kangqiao Industrial to 27.7.2052Area, PudongShanghai

* This relates to buildings constructed by a subsidiary on properties rented from the Ministry of Defence on leases which are renewable every year. In view of the relationship between the landlord and the subsidiary, the cost of the buildings is depreciated over 30 years.





8. Fixed assets (continued)(iii) Buildings on rented properties

Net book value Location Description Tenure Land area 2004 2003 (sq. m.) $’000 $’000

Singapore 540 Airport Road Hangars and offi ce building 3 years lease from 51,599 30,832 19,304 1.7.2003#

# The buildings on rented properties relate to buildings constructed by one of the subsidiaries on properties rented from the Ministry of Defence on leases which are renewable every three years. In view of the relationship between the landlord and the subsidiary, the cost of the buildings on rented properties is depreciated over 30 years.

9. Subsidiaries Company 2004 2003 $’000 $’000

Unquoted shares, at cost: Singapore Technologies Aerospace Ltd 90,114 90,114 Singapore Technologies Electronics Limited 26,982 26,982 Singapore Technologies Kinetics Ltd 61,938 61,938 Singapore Technologies Marine Ltd 56,000 56,000 Vision Technologies Systems, Inc. 87,901 87,901 Singapore Technologies Dynamics Pte Ltd 6,000 6,000 ST Synthesis Pte Ltd 2,156 2,156 FusionTech Pte. Ltd. 1,000 1,000

332,091 332,091Provision for impairment (6,000) (6,000)

Carrying amount after provision for impairment 326,091 326,091

Details of the subsidiaries are as follows:

Effective equity interest held by the Group 2004 2003 % %

(a) Singapore Technologies Aerospace Ltd and its subsidiaries 100 100 ST Aerospace Engineering Pte Ltd and its subsidiaries: 100 100 ST PAE Holdings Pty Ltd 100 100 Pacifi c Flight Services Pte Ltd 100 100 ST Aerospace Engines Pte Ltd 100 100 ST Aerospace Systems Pte Ltd 100 100 ST Aerospace Supplies Pte Ltd and its subsidiary: 100 100 iShopAero Pte Ltd 100 100 ST Aerospace International Structures Pte Ltd 100 100 ST Aviation Resources Pte Ltd and its subsidiary: 100 50 ST Aviation Resources 1 Limited 100 50 ST Aviation Services Co Pte Ltd 80 80 Visiontech Investment Pte Ltd 100 100




9. Subsidiaries (continued) Effective equity interest held by the Group 2004 2003 % %

Singapore Aerospace (UK) Investments Pte Ltd and its subsidiaries: 100 100 Singapore Technologies Engineering (Europe) Ltd 100 100 Airline Rotables Limited 100 100 Singapore Aerospace Kabushiki Kaisha 100 100 Visiontech Engineering Pte Ltd 51 51 ST Airport Ground Services Pte Ltd 100 100 Bournemouth Aviation Services Company Limited 81 60 Singapore British Engineering Pte Ltd 51 51

(b) Singapore Technologies Electronics Limited and its subsidiaries 100 100 SEEL Electronic & Engineering Sdn Bhd 100 100 SES Systems Pte. Ltd. and its subsidiaries: 100 100 INFA Systems Limited 70 70 Xinke Information Systems Ltd 100 – ST Training & Simulation Pte Ltd and its subsidiaries: 100 100 Interactive Visual Laboratory Pte Ltd 100 100 ST Education & Training Private Limited 70 70 CET Technologies Pte Ltd and its subsidiaries: 100 100 DigiSAFE Pte Ltd and its subsidiaries: 100 100 DataMark Technologies Pte Ltd 61.12 61.12 DigiSAFE, Inc.+ – 100 Agilis Communication Technologies Pte Ltd and its subsidiary: 100 100 ST Electronics (Sichuan) Co., Ltd 100 100 ST Electronics (Shanghai) Co., Ltd and its subsidiary: 100 100 ST Electronics-PCI Co. Ltd 51 – iTS Technologies Pte Ltd and its subsidiary: 100 100 Prescient Systems & Technologies Pte. Ltd. 51 – ST Electronics (Taiwan) Limited 100 100 Intelect Technologies, Incorporated 78.57 78.57 Ripple Systems Pty Ltd 70 70 (c) Singapore Technologies Kinetics Ltd and its subsidiaries 100 100 Singapore Ordnance Engineering Pte. Ltd. 100 100 Mobility Systems Pte Ltd and its subsidiaries: 100 100 Silvatech Global Systems Limited 50** 50** Silvatech Systems Corporation Pte Ltd and its subsidiaries: 50** 50** Int. Silvatech Industries Inc. 50** 50** Silvatech Systems Marketing Inc. 50** 50** STA Inspection Pte Ltd and its subsidiary: 100 100 JuzclickCar.com Pte Ltd 90 90 Singapore Commuter Private Limited 100 100 ST Automotive Industrial Pte Ltd 100 100 STA Investment Pte Ltd 100 100 ST Automotive (Vietnam) Pte Ltd 100 100 STA Detroit Diesel-Allison (Singapore) Pte Ltd 100 100 Shanghai Elite Electric Vehicles Co., Ltd 100 100 Expert Systems Pte Ltd 100 100





9. Subsidiaries (continued) Effective equity interest held by the Group 2004 2003 % %

Singapore Test Services Private Limited and its subsidiary: 100 100 SAO Industrial Services Pte Ltd 100 100 Chartered Ammunition Industries Pte Ltd and its subsidiary: 100 100 Chartered Pyrotechnic Industries Private Limited 51 51 Unicorn International Pte Limited 100 100 Allied Ordnance of Singapore (Pte) Limited 100 100 Ordnance Development and Engineering Company of Singapore (1996) Private Limited 100 100 Autonomous Technology Pte Ltd † 100 100 Kinetics Systems (Shanghai) Co. Ltd. 100 100 Founders Industries Pte Ltd and its subsidiary: 100 100 Ordnance Development and Engineering Company of Singapore (Private) Limited 100 100 (d) Singapore Technologies Marine Ltd and its subsidiary 100 100 STSE Engineering Services Pte Ltd 100 100 (e) Vision Technologies Systems, Inc. and its subsidiaries 100 100 Singapore Technologies Engineering (USA) Inc. 100 100 Vision Technologies Aerospace Incorporated and its subsidiaries: 100 100 ST Mobile Aerospace Engineering, Inc. 100 100 DalFort Aerospace GP, Inc. 100 100 DalFort Aerospace, L.P. 100 100 San Antonio Aerospace GP, LLC 100 100 San Antonio Aerospace LP 100 100 SA Supplies (USA) Inc. 100 100 Vision Technologies Marine, Inc. and its subsidiary: 100 100 VT Halter Marine, Inc. 100 100 VT Systems, Inc. 100 100 Vision Technologies Kinetics, Inc. and its subsidiary: 100 100 Miltope Corporation 100 100 Vision Technologies Land Systems, Inc. and its subsidiary: 100 100 VT Dimensions, Inc. 100 100 (f) Singapore Technologies Dynamics Pte Ltd 100 100 (g) ST Synthesis Pte Ltd 100 100 (h) FusionTech Pte. Ltd. 100 100 ** The Group owns 50% plus one share in these companies.

+ During the year, this subsidiary was voluntarily dissolved.

† Shares of this subsidiary are held in trust by Directors of the subsidiary.




9. Subsidiaries (continued) Further details of the subsidiaries are as follows:

Country of incorporation/Name of subsidiary Principal activities place of business

Singapore Technologies Aerospace Ltd Investment holding and provision of engineering, Singapore marketing and engineering support services ST Aerospace Engineering Pte Ltd Repair, maintenance and servicing of aircraft Singapore ST PAE Holdings Pty Ltd Investment holding Australia Pacifi c Flight Services Pte Ltd Providing air transport services Singapore ST Aerospace Engines Pte Ltd Repair and overhaul of aircraft engines Singapore ST Aerospace Systems Pte Ltd Service, repair and overhaul of aircraft components Singapore ST Aerospace Supplies Pte Ltd Trading, Maintenance-By-The-Hour services for Singapore component and repair management and warehousing services for aircraft equipment, parts and components iShopAero Pte Ltd Trading, e-commerce and information technology Singapore related services for the aerospace industry ST Aerospace International Structures Designing, developing and manufacturing aircraft, SingaporePte Ltd engines, equipment, accessories, components and such other parts ST Aviation Resources Pte Ltd Investment holding Singapore ST Aviation Resources 1 Limited # Investment holding and aircraft leasing business British Virgin Islands ST Aviation Services Co Pte Ltd Repair, maintenance, modifi cation and servicing of Singapore commercial aircraft

Visiontech Investment Pte Ltd Investment holding and dealing Singapore Singapore Aerospace (UK) Investments Investment holding UK Pte Ltd Singapore Technologies Engineering Providing marketing and investment services to UK (Europe) Ltd the Group Airline Rotables Limited Providing component management and UK support services for aircraft Singapore Aerospace Kabushiki Kaisha # Providing marketing services to the Group Japan





9. Subsidiaries (continued)


Visiontech Engineering Pte Ltd Provision of engineering services for the Singapore repair, maintenance and modifi cation of aircraft, aircraft equipment and components ST Airport Ground Services Pte Ltd Investment holding and provision of airport ground Singapore cargo and passenger handling services Bournemouth Aviation Services Repair and maintenance of aircraft UK Company Limited Singapore British Engineering Pte Ltd Marketing and sale of a range of defence products Singapore and associated equipment and participating in the development of new products and systems Singapore Technologies Electronics Design, development, supply, installation, integration Singapore Limited and maintenance of transportation, intelligent building, defence electronic and communication systems SEEL Electronic & Engineering Sdn Bhd Sales of electronic instruments and equipment, Malaysia electronic engineering and systems integration services for infrastructure projects as well as maintenance and calibration of electronic equipment SES Systems Pte. Ltd. Design, development and supply of real-time/ Singapore mission critical systems and provision of related maintenance services INFA Systems Limited Provision for services in consulting, designing and Hong Kong developing systems integration, the maintenance and support of operational and computer systems and sales and distribution of system equipment Xinke Information Systems Ltd Providing IT outsourcing services, software People’s Republic applications development and turnkey solutions of China ST Training & Simulation Pte Ltd Design, development, supply, integration and Singapore maintenance of training and simulation systems Interactive Visual Laboratory Pte Ltd Design, development and manufacture of computers Singapore and data processing systems, as well as provision of services for the processing and maintenance of data and information ST Education & Training Private Limited Provision of education and training, management Singapore and consultancy services for operational and technical domains of maritime, aerospace and land services and industries






CET Technologies Pte Ltd Design, development, systems integration, Singapore manufacturing and sale of communication equipment, GPS-based fl eet management system, traffi c management system, info appliances and defence electronics DigiSAFE Pte Ltd Design, development, sale and provision of Singapore technical support for information security products, solutions and services DataMark Technologies Pte Ltd Develop and provide digital water marking and Singapore related solutions Agilis Communication Technologies Manufacture of microwave components and Singapore Pte Ltd sub-system, system integration and provision of related repairs and maintenance for the telecommunications and defence electronics industries ST Electronics (Sichuan) Co., Ltd Maintenance of communication and other related People’s Republic apparatus and consultant service of of China telecommunication technology ST Electronics (Shanghai) Co., Ltd Development and manufacturing of computer People’s Republic control and management systems, microwave control of China systems, simulation and training systems, security systems, MRT passenger information systems, MRT autofare collection system, MRT platform screen door system and related software. Provision of related technical consultation and aftersales services and sale of in-house products. ST Electronics-PCI Co. Ltd Computer software and hardware R&D and People’s Republic manufacture, computer supervise and control of China management system, microwave system, simulation and training system, security management system and peripheral devices, selling in-house products, and offering relevant system integration and skill consultation and after-sales service. Electronic technologies, industry automatic equipment R&D, electronic consulting service, system integration and network engineering installation.

iTS Technologies Pte Ltd Development, marketing and maintenance of Singapore advance simulation and training systems for the aircraft and other industries







Prescient Systems & Technologies Business of developing, producing and marketing Singapore Pte. Ltd. non-real time and real time instrumentation systems for defence and commercial applications

ST Electronics (Taiwan) Limited # Provide integration for large-scale system projects Taiwan in rail, expressway and intelligent building management solutions Intelect Technologies, Incorporated # Development and supply of a family of multi-access USA optical networking equipment Ripple Systems Pty Ltd Design, develop and implement innovative software Australia systems for technically challenging integration applications. Key markets for these applications are rail command and control, intelligent transport systems for road infrastructure, and identifi cation and transaction processing for SmartCard and Micropayment applications.

Singapore Technologies Kinetics Ltd Provision of design and engineering services, Singapore manufacture, sales and knowhow transfer of military and commercial vehicles, automotive subsystems, armament, weapons, weapon systems, ammunition and explosives and the provision of engineering services for assembly, upgrading/modifi cations, maintenance, repair and overhaul of vehicles and weapon systems, and trading in motor vehicles, equipment, vehicle spares and related accessories Singapore Ordnance Engineering Workshop and provision of engineering services SingaporePte. Ltd. Mobility Systems Pte Ltd Investment holding Singapore Silvatech Global Systems Limited # Owns the intellectual property rights to electro- British Virgin hydraulic drive, hydro-mechanical and electro- Islands mechanical continuously variable transmissions technologies, and equipment powered by such drives Silvatech Systems Corporation Pte Ltd Designing, manufacturing, marketing and Singapore managing licencees of technologies and products using electro-hydraulic drive, hydro-mechanical and electro-mechanical continuously variable transmissions, and equipment powered by such drives, globally






Int. Silvatech Industries Inc. # Research and development, manufacturing and Canada sales of electro-hydraulic drive, hydro-mechanical and electro-mechanical continuously variable transmissions technologies, and equipment powered by such drives Silvatech Systems Marketing Inc. # Marketing of products to the North American Canada market using electro-hydraulic drive, hydro- mechanical and electro-mechanical continuously variable transmissions technologies, and equipment powered by such drives STA Inspection Pte Ltd Inspection of heavy goods vehicles, light vehicles, Singapore motor cars, buses and motorcycles, provision of vehicle inspection project management, provision of independent damage assessment services as well as to act as the commission agent for the sale and purchase of motor vehicle spare parts mainly conducted online via the internet JuzclickCar.com Pte Ltd Dormant Singapore Singapore Commuter Private Limited Dormant Singapore ST Automotive Industrial Pte Ltd Dormant Singapore STA Investment Pte Ltd Investment dealing Singapore ST Automotive (Vietnam) Pte Ltd Dormant Singapore STA Detroit Diesel-Allison (Singapore) Assembling and marketing of diesel engines and SingaporePte Ltd related products and the provision of technical services, fi eld services, repair and maintenance services Shanghai Elite Electric Vehicles Co., Ltd Manufacture and sale of electric bicycles and People’s Republic provision of vehicle repairs and consultancy of China services

Expert Systems Pte Ltd Dormant Singapore Singapore Test Services Private Limited Provision of professional engineering consultancy, Singapore tests, inspection, certifi cation and related services SAO Industrial Services Pte Ltd Dormant Singapore







Chartered Ammunition Industries Pte Ltd Provision of design and engineering services, Singapore manufacture, sales, disposal and knowhow transfer of precision munitions, ammunition, armament, weapon systems, military equipment, explosives, hand-grenades, thunder-fl ashes, pyrotechnic products and gunpowder and the provision of engineering services for assembly, upgrading/modifi cations, maintenance, repair and overhaul of ammunition and weapon systems, and related services Chartered Pyrotechnic Industries Manufacture and sale of pyrotechnic products SingaporePrivate Limited

Unicorn International Pte Limited Trading and marketing of military products Singapore Allied Ordnance of Singapore (Pte) Provision of design and engineering services, SingaporeLimited manufacture, sales and knowhow transfer of armament, weapons, weapon systems, ammunition, explosives, weapon magazines, military equipment, machines, tools, spares and components and the provision of engineering services for assembly, upgrading/modifi cations, maintenance, repair and overhaul of guns and weapons systems, and related services Ordnance Development and Engineering Provision of design and engineering services, SingaporeCompany of Singapore (1996) Private manufacture, sales and knowhow transfer of Limited armament, weapons, weapon systems, ammunition, explosives, weapon magazines, military equipment, machines, tools, spares and components and the provision of engineering services for assembly, upgrading/modifi cations, maintenance, repair and overhaul of guns and weapons systems, and related services Autonomous Technology Pte Ltd ## Dormant Singapore

Kinetics Systems (Shanghai) Co. Ltd. Manufacture of vehicle drive systems, industrial People’s Republic drive motors, small external combustion engines, of China and sale of self manufactured products Founders Industries Pte Ltd * Dormant Singapore

Ordnance Development and Engineering Dormant SingaporeCompany of Singapore (Private) Limited *






Singapore Technologies Marine Ltd Construction and repair of naval and commercial Singapore vessels, design, integration, fabrication, installation of military and commercial engineering equipment and the provision of engineering consultancy and technical management services STSE Engineering Services Pte Ltd Contractor, developer and sub-contractor of Singapore engineering and engineering related works and provider of turnkey engineering solutions Vision Technologies Systems, Inc. # Investment holding USA Singapore Technologies Engineering Dormant USA(USA) Inc. # Vision Technologies Aerospace Investment holding and providing investment USAIncorporated # services to the Aerospace sector ST Mobile Aerospace Engineering, Inc. # Repair and maintenance of aircraft USA DalFort Aerospace GP, Inc. # Investment holding USA DalFort Aerospace, L.P. # + Repair and maintenance of aircraft USA San Antonio Aerospace GP, LLC # Investment holding USA San Antonio Aerospace LP # Repair and maintenance of aircraft USA SA Supplies (USA) Inc. # Dormant USA Vision Technologies Marine, Inc. # Investment holding and providing investment USA services to the Marine sector VT Halter Marine, Inc. # Construction and repair of naval and commercial USA vessels, design, integration, fabrication, installation of engineering equipment and provision of engineering services VT Systems, Inc. # Investment holding and providing investment USA services to the Group Vision Technologies Kinetics, Inc. # Investment holding, marketing and provision of USA services to the Land Systems sector







Miltope Corporation # Manufacturer of militarised and rugged computer USA equipment for military applications and commercial computer related products for the commercial aerospace market including in-fl ight entertainment systems and wireless local area network equipment Vision Technologies Land Systems, Inc. # Investment holding USA VT Dimensions, Inc. # Investment holding and licensing of intellectual USA properties Singapore Technologies Dynamics Technology development, advanced concept design SingaporePte Ltd and development and technology acquisition ST Synthesis Pte Ltd Providing one-stop total integrated logistic support Singapore services FusionTech Pte. Ltd. Investment holding Singapore

# Not required to be audited under the law in the country of incorporation.## Shares of this subsidiary are held in trust by directors of the subsidiary.* These entities are under members’ voluntary liquidation.+ This entity ceased operations in October 2003.

All subsidiaries that are required to be audited under the law in the country of incorporation are audited by Ernst & Young, Singapore except for the following :

Name of subsidiary Name of accounting fi rmST PAE Holdings Pty Ltd Ernst & Young, PerthSingapore Aerospace (UK) Investments Pte Ltd Ernst & Young, CambridgeSingapore Technologies Engineering (Europe) Ltd Ernst & Young, CambridgeAirline Rotables Limited Ernst & Young, CambridgeBournemouth Aviation Services Company Limited Ernst & Young, CambridgeSEEL Electronic & Engineering Sdn Bhd Ernst & Young, Kuala LumpurINFA Systems Limited Ernst & Young, Hong KongST Electronics (Sichuan) Co., Ltd Ernst & Young, ShanghaiST Electronics (Shanghai) Co., Ltd Ernst & Young, ShanghaiST Electronics-PCI Co. Ltd Ernst & Young, GuangzhouRipple Systems Pty Ltd Ernst & Young, PerthShanghai Elite Electric Vehicles Co., Ltd Ernst & Young, ShanghaiKinetics Systems (Shanghai) Co. Ltd. Ernst & Young, Shanghai




9. Subsidiaries (continued)(a) During the fi nancial year, the Group incorporated the following subsidiaries:

Country of incorporation and Equity Date ofName of company place of business interest held incorporation %

ST Electronics-PCI Co. Ltd People’s Republic Of China 51 7 January 2004 Xinke Information Systems Ltd People’s Republic Of China 100 22 October 2004

(b) During the fi nancial year, the Group acquired additional equity interests in the following companies: Net tangible

Interest Interest after assetsName of company acquired acquisition Consideration acquired % % $ $

ST Aviation Resources Pte Ltd 50 100 6,972,000 6,357,000

Bournemouth Aviation Services 21 81 1,389,000 – Company Limited

Subsequent to the above acquisition of additional equity interest, the Group acquired additional shares in Bournemouth Aviation Services Company Limited for a consideration of $2,002,000. The effective equity interest in the company remains the same at 81%.

During the year, the Group acquired a 51% equity interest in Prescient Systems & Technologies Pte. Ltd. by transferring receivables of $2,625,000. There was no goodwill on acquisition.





10. Associated companies and joint ventures Group 2004 2003 $’000 $’000

Quoted shares, at cost 24,800 – Unquoted shares, at cost 167,484 144,593Preference shares, at cost 9,928 9,928Goodwill on acquisition written off (1,737) (1,737)Goodwill on acquisition of associated companies and joint ventures (23,606) (23,606)

Share of net assets acquired 176,869 123,980Provision for impairment in value of investments (5,271) (5,198)Reclassifi cation of goodwill (net of amortisation) from intangible assets (Note 12) 7,528 – Share of post-acquisition: Profi ts 89,441 68,896 Reserves (7,239) (3,143)

261,328 189,733Investment in a joint venture 9,663 9,663Provision for impairment in value of a joint venture (2,999) (2,676)

267,992 196,720

The investment in a joint venture is effectively a quasi-equity loan to the joint venture.

The investment in the Company of $50,000 represents the cost of investment in Asian Aerospace 2006 Pte. Ltd.

Provision for impairment in value of investmentsMovements in provision for impairment in value of investments during the year are as follows:

At beginning of the year 5,198 4,845Charge to profi t and loss account 2,002 353Impairment written off against provision (1,929) –

At end of the year 5,271 5,198




10. Associated companies and joint ventures (continued) Provision for impairment in value of a joint venture Movements in provision for impairment in value of a joint venture during the year are as follows:

Group 2004 2003 $’000 $’000

At beginning of the year 2,676 2,355Charge to profi t and loss account 323 321


The Group’s share of the joint ventures’ results and assets and liabilities are as follows:

Results

Turnover 20,443 27,068

Net profi t for the year (461) 419

Assets and liabilities Non-current assets 9,511 7,518Current assets 32,659 13,360Current liabilities (17,677) (8,683)Non-current liabilities (9,844) (9,698)

14,649 2,497

(a) Details of the associated companies are as follows:

Country of Effective equityName of associated incorporation/ interest held bycompany Principal activities place of business the Group 2004 2003 % %

Aerospace Engineering Maintenance and servicing of aircraft Australia 50 50Services Pty Ltd Aerospace Engineering Services Trustee of unit trust fund Australia 50 50Pty Ltd Unit Trust 1988 JV Pte. Ltd. (formerly Promoting and organising trade Singapore 50 50known as Asian Aerospace exhibitions in Singapore for systems, Pte Ltd) equipment, products and services in aerospace and defence-related applications on a biennial basis





10. Associated companies and joint ventures (continued)


Composite Technology Repairing and rebuilding helicopter Singapore 33.33 33.33 International Pte Ltd rotor blades Eurocopter South East Selling, maintaining and overhauling Singapore 25 25Asia Private Limited of helicopters

Shanghai Technologies Aircraft and component maintenance, People’s Republic 49 –Aerospace Company Limited repair, overhaul and other related of China maintenance business Singapore Precision Repair Repair and overhaul of aircraft and Singapore 50 50and Overhaul Pte Ltd helicopter landing gears and its related components Turbine Coating Services Repair, refurbishment and upgrading Singapore 24.5 24.5Pte Ltd of aircraft jet engine turbine blades and vanes

Turbine Overhaul Services Repair and service of gas and steam Singapore 49 49Pte Ltd turbine components Asia-Pacifi c Training and Provision of simulator training Singapore – 37.24Simulation Pte Limited * services CHUN Holdings Ltd ϕ Investment, consultancy and Israel 33.33 33.33 management services in the electronics industry CHUN Holdings Limited Investment, consultancy and Israel 33 –Partnershipϕ management services in the electronics industry COMAT Training Services Operating of a computer training Singapore 49.59 54.47Pte Ltd ** school, providing training in computer software and applications ECS Holdings Limited Relating to investment holding and Singapore 21.35 – the distribution of information technology products Green Dot Internet Services Web hosting services and development Singapore 23.8 23.8Pte Ltd of e-commerce applications






Infowave Pte Ltd Design, development and supply of Singapore 43 43 mobile computing and wireless communications products and solutions

iWOW Technology Pte Ltd To carry out research and Singapore 26.6 26.6 development, consultancy services in telecommunication, electrical and related fi elds Knowledge Alive Pte. Ltd. ** Offer technologically-driven learning Singapore 49.59 54.47 and knowledge solutions, products and services to corporate, tertiary and workforce markets Mobile Solutions and Payment Mobile-commerce and mobile- Singapore 21.57 21.57Services Pte Ltd commerce related activities mPayment Pte Ltd To provide internet and Singapore 31.78 31.78 telecommunication related services and consultancy services in information technologies PolarSat Inc ϕ Development, manufacturing and Canada 40.86 42.46 marketing of multimedia VSAT (Very Small Aperture Terminals) and Satcom satellite networks RF Korea Inc. ϕ Manufacture and sell wireless Korea 22 22 communication devices and related equipment Sandz Solutions (Singapore) Providing enterprise computing Singapore 25 –Pte Ltd solutions and trading in computer and peripherals

Sentry Technologies Pte Ltd Design, development and sale of Singapore 35 35 computer security products ST LogiTrack Pte Ltd Development and sales of radio Singapore 50 50 frequency identifi cation applications in the logistics and related industries Stegami Pte Ltd Develop and provide internet-marketing Singapore 37.6 37.6 solutions and services







Trusted Hub Ltd Provision of an integrated trusted Singapore 21.8 15.75 environment for secured transactions and e-commerce

WizVision Pte. Ltd. (Formerly Providing information technology Singapore 22.8 22known as WizVision.com services and trading of Pte Ltd) computer accessories

CIS - Oerlikon Pte Ltd Dormant Singapore 50 50 CityCab Pte Ltd Rental of taxis and provision of Singapore 46.5 46.5 premier bus service, charge card facilities and travel related services Defence Electronics of Manufacture of fuses Singapore 49 49Singapore Pte Ltd Nusantara Technologies Provision of non-destructive testing Malaysia 49 49Sdn. Bhd. services, ultrasonic fl aw detection and gauging survey and pressure gauge calibration

Solectria Corporation #ϕ Designing, engineering and USA 43.5 43.5 manufacturing of advanced electric, hybrid electric and fuel cell vehicle drives systems and related components Timoney Holdings Limited Design and prototyping services and Republic of Ireland 25 25 component supply for the automotive and aerospace engineering sectors Anchorville Pte Ltd ## Dormant Singapore 30 30 AquaGen International Dormant Singapore 25 25Pte Ltd ##

PT SSE-Van der Horst Indonesia Provision of precision engineering Indonesia 37 37 services Asian Aerospace 2006 Pte. Ltd. Promoting and organising trade Singapore 50 – exhibitions in Singapore for systems, equipment, products and services in aerospace and defence-related applications on a biennial basis






NanoScience Innovation Pte Ltd Research and development, Singapore 38.33 38.33 manufacturing, distributing and trading of ultra fi ne structure, especially nano-scale, materials, devices, equipment and intellectual properties

* During the year, this associated company was voluntarily dissolved.

** These subsidiaries became associated companies during the year following a capital reduction in Knowledge Alive Pte. Ltd.

# The Group, through Singapore Technologies Kinetics Ltd (“ST Kinetics”), invested in Solectria Corporation (“Solectria”) in the form of both common and preference shares. ST Kinetics holds more than half of the voting rights (50.8% comprising of 43.5% in common shares and 7.3% in preference shares) which make Solectria a subsidiary of ST Kinetics under the Companies Act. However, ST Kinetics does not control the fi nancial and operating policy decisions of Solectria as it does not control the composition of the Board of Directors. Hence, in accordance with Financial Reporting Standards 27 and 28, the results of Solectria will not be combined in the Group accounts. Instead, the results of Solectria are equity accounted for based on ST Kinetics’ interest in common stock shareholdings, in line with the Group’s accounting policy on investments in associated companies as disclosed in Note 2(b)(ii).

On 17 December 2004, ST Kinetics signed an agreement to divest its 50.8% stake in Solectria in a share exchange for approximately 10% of the common shares of Azure Dynamics Corporation (“Azure”), a company listed on the Toronto Stock Exchange in Canada as well as on the Alternative Investment Market (“AIM”) of the London Stock Exchange in London, United Kingdom. Based on Azure’s closing share price as at 17 December 2004, ST Kinetics’ stake in Azure is worth US$10.3 million (S$17 million). The fi nal consideration value of ST Kinetics’ stake in Azure will be dependent on the closing price of Azure’s shares on completion date. The transaction is expected to close before end January 2005, subject to regulatory approvals.

## These associated companies are under compulsory winding up by the Court.





10. Associated companies and joint ventures (continued) (b) Details of joint ventures are as follows:

Country of Effective equityName of incorporation/ interest held byjoint venture Principal activities place of business the Group 2004 2003 % %

GFM Electronics S.A. de C.V. Distribution and sales of high Mexico 50 50 technology systems, services and products in the communications area, as well as electronics systems, principally closed circuits and alarms for airports, malls, stadiums and highways TranSys Pte Ltd Design, development, distribution, Singapore 50 50 maintenance and marketing of railway related products

Beijing Zhonghuan Kinetics Develop, manufacture and sale of People’s Republic 50 –Heavy Vehicles Co., Ltd. specialised heavy-duty vehicles and of China sale of related spare parts and provision of relevant technical consultancy and after sale technical support services SMART Systems Pte Ltd Life systems integration of Singapore 50 50 weapon system Takata CPI Singapore Pte Ltd Manufacture of pyrotechnic Singapore 49 49 components for seatbelts and air bags used in motor vehicles Halter-Bollinger Joint To bid and secure US boat fabrication USA 50 50Venture LLC ϕ contracts for its shareholders Joint Shipyard Management Construction of and managing Singapore 30 30Services Pte Ltd workers’ dormitories

ϕ Not required to be audited under the law in the country of incorporation.




10. Associated companies and joint ventures (continued)All associated companies and joint ventures that are required to be audited under the law in the country of incorporation, are audited by Ernst & Young, Singapore, except for the following:

Name of associated company/joint venture Name of accounting fi rm

1988 JV Pte. Ltd. KPMG, SingaporeComposite Technology International Pte Ltd Deloitte and Touche, SingaporeEurocopter South East Asia Private Limited KPMG, SingaporeShanghai Technologies Aerospace Company Limited Ernst & Young, Hua MingTurbine Coating Services Pte Ltd PricewaterhouseCoopers, Singapore Turbine Overhaul Services Pte Ltd PricewaterhouseCoopers, SingaporeECS Holdings Limited KPMG, SingaporeGFM Electronics S.A. de C.V. PricewaterhouseCoopers, MexicoGreen Dot Internet Services Pte Ltd KPMG, SingaporeInfowave Pte Ltd Lee Seng Chan & CoiWOW Technology Pte Ltd LW Ong & CoMobile Solutions and Payment Services Pte Ltd KPMG, SingaporemPayment Pte Ltd Thong & LimSandz Solutions (Singapore) Pte Ltd Jee Ah Chian & CoSentry Technologies Pte Ltd Lee Seng Chan & CoST LogiTrack Pte Ltd KPMG, SingaporeStegami Pte Ltd Thong & LimTranSys Pte Ltd KPMG, SingaporeTrusted Hub Ltd KPMG, SingaporeWizVision Pte. Ltd. B H Gan & CoBeijing Zhonghuan Kinetics Heavy Vehicles Co., Ltd. Ernst & Young, BeijingCityCab Pte Ltd Deloitte and Touche, SingaporeNusantara Technologies Sdn. Bhd. Deloitte Kassimchan, MalaysiaTimoney Holdings Limited KPMG, IrelandAnchorville Pte Ltd KPMG, SingaporeAquaGen International Pte Ltd KPMG, SingaporePT SSE-Van der Horst Indonesia Ernst & Young, IndonesiaAsian Aerospace 2006 Pte. Ltd. KPMG, Singapore NanoScience Innovation Pte Ltd Wong Mun Piaw & Co





11. Long-term investments Group 2004 2003 $’000 $’000

Quoted investments Equity shares, at cost: Related corporation 1,003 1,080 Non-related corporations 21,367 15,085

22,370 16,165Provision for impairment in value of quoted investments (487) (671)

Total quoted investments 21,883 15,494

Unquoted investments Equity shares, at cost: Related corporation 835 1,230 Non-related corporations 40,344 32,013 Venture capital funds and limited partnership 1,019 7,316

42,198 40,559Membership rights 820 860Convertible loans α 5,131 4,445Loan to related corporation 3,339 1,442

51,488 47,306Provision for impairment in value of unquoted investments (24,938) (26,719)

Total unquoted investments 26,550 20,587

Total long-term investments 48,433 36,081

Quoted investments – market value

Equity shares: Related corporation 669 570 Non-related corporations 50,707 35,179

51,376 35,749

α Included in the convertible loans is an amount of $4,449,000 (US$2,700,000) (2003: $3,763,000 (US$2,199,000))

extended by a subsidiary to an investee company at an interest rate of 1% (2003: 1%) above LIBOR rate per annum. This loan is convertible to shares in the investee company.




11. Long-term investments (continued) Provision for impairment in value of quoted investments

Movements in provision for impairment in value of quoted investments during the year are as follows:

Group 2004 2003 $’000 $’000

At beginning of the year 671 861Write-back to profi t and loss account (184) (190)

At end of the year 487 671

Provision for impairment in value of unquoted investments

Movements in provision for impairment in value of unquoted investments during the year are as follows:

At beginning of the year 26,719 24,391(Write-back)/charge to profi t and loss account (1,781) 8,259Provision utilised – (5,931)


12. Intangible assets Commercial and intellectual Negative property Goodwill goodwill rights Total $’000 $’000 $’000 $’000

GroupCost At beginning of the year 64,968 (1,340) 4,837 68,465Additions – – 8 8Acquisition of additional interest in subsidiaries 2,004 – – 2,004Dilution of interest in subsidiaries (2,468) – – (2,468)Adjustment of goodwill 6,178 – – 6,178Change in accounting policy (Note 2b):– Reclassifi ed from accumulated amortisation (9,289) 690 365 (8,234)– Reclassifi ed to associated companies and joint ventures (Note 10) (7,528) – – (7,528)– Adjustment to opening retained earnings – 650 – 650Impairment of goodwill (158) – – (158)Translation difference (15) – (109) (124)

At end of the year 53,692 – 5,101 58,793





12. Intangible assets(continued) Commercial and intellectual Negative property Goodwill goodwill rights Total $’000 $’000 $’000 $’000

Accumulated amortisation At beginning of the year 9,515 (690) 1,475 10,300Amortisation for the year – – 802 802Dilution of interest in subsidiaries (226) – – (226)Change in accounting policy (Note 2b):– Reclassifi ed to cost (9,289) 690 365 (8,234)Translation difference – – (53) (53)

At end of the year – – 2,589 2,589

Net book value At 31 December 2004 53,692 – 2,512 56,204

At 31 December 2003 55,453 (650) 3,362 58,165

Group 2004 2003 $’000 $’000

Related to: Subsidiaries 56,204 50,898Associated companies and joint ventures – 7,267

56,204 58,165

During the year, the Group completed its valuation of the net assets of Miltope Corporation, a subsidiary acquired in 2003, after the 2003 audited fi nancial statements were issued. As a result of changes in the valuation, the fair value attributed to the net assets has decreased by $6.2m. Goodwill on consolidation is adjusted by a corresponding amount.




13. Long-term receivables (a) Long-term receivables comprise: Group Company 2004 2003 2004 2003 $’000 $’000 $’000 $’000

Housing and car loans and advances to staff 1,413 1,675 183 3Trade debtors * 7,309 – – – Due from a joint venture (trade) 5,981 – – – Loans to: Third parties 19,281 13,903 – – Provision for doubtful loans: Third parties (13,855) (13,903) – – 5,426 – – – Hire purchase receivables – 29 – –

20,129 1,704 183 3

Receivable: Within 1 year 735 889 183 3 After 1 year 19,394 815 – –

20,129 1,704 183 3

* Long-term trade debts of US$4,267,000 (S$7,309,000) are charged with half-yearly interest rate at LIBOR plus 0.5% per annum.

Movements in provision for doubtful loans to third parties are as follows: Group 2004 2003 $’000 $’000

At beginning of the year 13,903 17,285Write-back to profi t and loss account (48) (183)Provision utilised – (3,199)


(b) Included in the loans to third parties are:

(i) an amount of $3,835,000 (2003: $4,705,000) which is secured by the third party’s investment in a unit trust and the loan is repayable over a period of 12 years commencing from 1996. Interest is chargeable at 15% per annum calculated on the reducing balance basis.

(ii) an interest-free loan of US$1.5 million and subsequent loans of US$1.79 million charged at an interest rate of LIBOR plus 2% to a third party. These loans are not expected to be repaid in the next 12 months.

(iii) another third party was issued a loan amounting to approximately $8,312,000 (2003: $8,312,000). The loan is secured by intellectual property rights of that entity and is not expected to be repaid within the next 12 months. Interest is repriced every month and chargeable at the US Dollar prime rate plus 2% (2003: 2%) per annum, which is also the effective interest rate. The loan is convertible to shares of the entity, subject to certain terms and conditions. During the year, a notice was given to that entity to convert the loan to shares of that entity but the conversion has not been effected as at the end of the year.





13. Long-term receivables (continued)(iv) a loan amount of $886,000 (2003: $886,000) owed by another third party is repayable within the next 12

months. A fi xed interest is charged at 7% per annum. The loan is convertible to shares of the entity, subject to certain terms and conditions.

No interest income has been accrued for this fi nancial year for the loans stated in paragraphs (iii) and (iv) due to the uncertainty over the collectibility of the interest income.

(v) an interest-free bridging loan of $822,000 (US$500,000) (2003: Nil) was extended to a third party during the year. The bridging loan is secured by way of a Deed of Debenture which creates a fl oating charge over the assets of the third party. This loan is not expected to be repaid in the next 12 months.

(c) Hire purchase receivables comprise:

Gross Unearned Net investment interest investment receivable income receivable $’000 $’000 $’000

Group2004 Within 1 year – – –

2003 Within 1 year 30 1 29

The hire purchase receivables are fully repaid during the fi nancial year. During the fi nancial year, the effective interest rate on these hire purchase receivables is between 1% and 3% (2003: 4% and 7%) per annum.

14. Deferred tax assets Group 2004 2003 $’000 $’000

At beginning of the year 85,069 76,846Provision/(write-down) during the fi nancial year 994 (350)Acquisition of additional interests in subsidiary 1,535 9,406Translation differences (546) (72)Transfer to provision for taxation (2,280) (761)


The deferred tax assets arise as a result of:

Unabsorbed capital allowances and tax losses 4,894 4,747 Exchange differences, net 3 263 Provision for debts and stocks 23,818 25,688 Provision for warranties 27,902 31,688 Provision for liquidated damages 1,197 1,584 Provision for foreseeable losses 4,567 4,829 Other temporary differences 22,391 16,270

84,772 85,069




15. Stocks and work-in-progress Group 2004 2003 $’000 $’000

Stocks of equipment and spares At cost 133,932 120,524 At net realisable value 109,115 121,522

243,047 242,046

Work-in-progress in excess of progress billings Work-in-progress At cost, including profi ts recognised 1,024,424 768,200 At net realisable value 63,762 55,443

1,088,186 823,643Progress billings (652,225) (425,206)

435,961 398,437

679,008 640,483

Progress billings in excess of work-in-progress Work-in-progress, including profi ts recognised 167,203 109,466Progress billings (319,067) (228,907)

(151,864) (119,441)

Stocks are stated after provision for stock obsolescence of $102,042,000 (2003: $100,647,000) and work-in-progress in excess of progress billings are stated after provision for foreseeable losses of $28,022,000 (2003: $28,903,000).

16. Debtors, deposits and prepayments Group Company Note 2004 2003 2004 2003 $’000 $’000 $’000 $’000

Trade debtors 20 491,704 430,080 – – Advance payments to suppliers 134,238 142,122 – – Other debtors, deposits and prepayments 21 36,640 36,269 772 482Due from: Immediate holding company (non-trade) 6 134 – – Subsidiaries (non-trade) – – 16,642 29,894 Related corporations 22 967,834 972,547 238,126 125,099 Associated companies 23 7,883 5,490 – – Joint ventures (trade) 21,773 16,060 – – Joint ventures (non-trade) 287 914 – –

– provision for doubtful debts in joint ventures (301) (152) – –

1,660,064 1,603,464 255,540 155,475





17. Other assets Group 2004 2003 $’000 $’000

Assets held for disposal 17,202 20,325

Assets held for disposal

(a) Included in the above assets are yard facilities acquired in 2002. These assets are in excess of anticipated requirements in the short-term and are stated at net realisable value.

(b) During the year, net book value of fi xed assets amounting to $771,000 (2003: $423,000) were reclassifi ed from fi xed assets due to changes in the use of these assets (Note 8).

18. Amounts under fund managementPrincipal sum of amounts under fund management, at cost 250,000 215,231Provision for impairment in value – (570)

Principal sum of amounts under fund management at guaranteed value 250,000 214,661

The terms of the management agreements, which are for periods ranging from 2 to 3 years (2003: 1 to 4 years), provide for the following:

(a) the guarantee of the return of the principal sums from 95% to 100% (2003: 95% to 100%) by the fund managers at the end of the relevant fund management period;

(b) the fees payable to the fund manager include a share, in specifi ed proportions, of any surplus (determined at the end of the relevant fund management period) arising from the management of the fund; and

(c) the Group can, pursuant to the terms, terminate the agreement by giving one month prior notice in writing to the fund managers. In the event of early termination, the guarantee of the return of the principal sum will not be applicable.

As the surplus, arising from the management of these funds can only be determined at the end of the relevant fund management period, such surplus, if any, will be recognised as income then.

Movement in provision for impairment in value of amounts under fund management during the year is as follows:

At beginning of the year 570 10,606Write-back to profi t and loss account (570) (10,036)

At end of the year – 570

Value of assets under fund management can be analysed as follows:

Quoted equity investments at market value 47,629 24,804Quoted bond investments at market value 192,689 181,096Unquoted bonds at estimated net realisable value – 9,218Cash 18,887 13,612

259,205 228,730




19. Bank balances and other liquid funds Group Company 2004 2003 2004 2003 $’000 $’000 $’000 $’000

Fixed deposits with fi nancial institutions 434,973 667,580 176,877 230,868Cash and bank balances 111,276 178,781 5,840 10,071Short-term notes 12,000 – – –

558,249 846,361 182,717 240,939

Fixed deposits with fi nancial institutions mature on varying periods within 9 months (2003: 7 months) from the fi nancial year end. Interest rates range from 0.03 % to 6.31 % (2003: 0.03 % to 6.31%) per annum, which are also the effective interest rates.

20. Trade debtors Group 2004 2003 $’000 $’000

Trade debtors 515,499 461,887Provision for doubtful debts (87,128) (89,156)

428,371 372,731Unbilled receivables 63,333 57,349

491,704 430,080

Movements in provision for doubtful debts during the year are as follows:

At beginning of the year 89,156 67,167(Write-back)/charge to profi t and loss account (1,111) 25,472Bad debts written off against provision (727) (3,484)Arising from (dilution of interest in)/acquisition of subsidiaries (130) 196Translation difference (60) (195)






21. Other debtors, deposits and prepayments Group Company 2004 2003 2004 2003 $’000 $’000 $’000 $’000

Deposits 5,377 4,679 68 44Prepayments 2,163 3,478 15 2Interest receivable 3,062 2,257 392 363Other recoverables 9,459 6,121 112 46Non-trade debtors 16,579 19,734 185 27

36,640 36,269 772 482

22. Due from related corporations

Trade balances 9,736 5,335 – – Non-trade balances 382,512 705,760 10,077 68,000Loans 575,768 261,452 228,049 57,099Provision for doubtful debts (182) – – –

967,834 972,547 238,126 125,099

Included in non-trade balances are Floating Rate Notes (“FRN”), amounting to $382,000,000 (2003: $694,500,000) and $10,000,000 (2003: $68,000,000) for the Group and the Company respectively. The FRNs of the Group and the Company are issued by a related corporation, ST Treasury Services Limited, and guaranteed by the immediate holding company, Singapore Technologies Pte Ltd (“STPL”). As mentioned in Note 1, arising from the restructuring of STPL, the guarantee given by STPL had ceased on 31 December 2004. With effect from 31 December 2004, Fullerton Management Pte Ltd, a wholly owned subsidiary of Temasek Holdings (Private) Limited, would provide the guarantee for the FRNs.

As at 31 December 2004, the FRNs have remaining maturity periods of up to 1 year (2003: 2 years) with interest rates being fi xed on a 3 to 6 month basis at the respective repricing dates. Interest rates range from 0.77% to 1.68% (2003: 0.70% to 1.5725%) per annum, which are also the effective interest rates.

The holder of these FRNs has the option to redeem the FRNs at each repricing date and therefore the Group has the ability to redeem these FRNs in the short-term.

Loans to a related corporation are guaranteed by the immediate holding company, STPL. As mentioned above, the guarantee given by STPL had ceased on 31 December 2004 and Fullerton Management Pte Ltd would provide the guarantee for the loans to ST Treasury Services Limited with effect from 31 December 2004.

These loans mature on varying periods within 3 months (2003: 3 months) from the fi nancial year end. Interest rates range from 0.78% to 2.52% (2003: 0.645% to 1.97%) per annum, which are also the effective interest rates.




23. Due from associated companies Group 2004 2003 $’000 $’000

Trade balances 8,837 4,878Non-trade balances 306 1,277Provision for doubtful debts – trade (1,260) (665)

7,883 5,490

24. Creditors and accruals Group Company Note 2004 2003 2004 2003 $’000 $’000 $’000 $’000

Trade creditors 569,234 537,771 – – Other creditors and accruals 28 578,564 631,614 32,304 21,454Due to: Immediate holding company (trade) – 1,578 – – Immediate holding company (non-trade) 5 3,840 3 2,722 Subsidiaries (non-trade)* – – 249 17,520 Related corporations (trade) 4,782 2,695 – – Related corporations (non-trade) 75 89 66 – Associated companies (trade) 5,233 3,324 – – Joint ventures (trade) 458 375 – – Loans from minority shareholders of a subsidiary** 1,252 915 – –

1,159,603 1,182,201 32,622 41,696

* Included in this balance in the Company is an amount of $Nil (2003: $17.1 million (US$10 million)) relating to loans from a subsidiary.

** The loans are unsecured and repayable within the next 12 months. Interest is charged at 7% (2003: 7% to 10%) per annum.





25. Provisions Group 2004 2003 $’000 $’000

Provision for: Warranties 139,512 144,038 Liquidated damages 5,984 7,198 Foreseeable losses 22,833 21,950

168,329 173,186

(a) Movements in provision for warranties during the year are as follows:

At beginning of the year 144,038 136,567Arising from (dilution of interest)/acquisition of subsidiaries (372) 2,176Charge to profi t and loss account 5,512 11,296Provision utilised (9,248) (5,931)Translation difference (418) (70)


(b) Movements in provision for liquidated damages during the year are as follows:

At beginning of the year 7,198 35,742Charge/(write-back) to profi t and loss account 742 (17,161)Provision utilised (1,958) (11,383)Translation difference 2 –


(c) Movements in provision for foreseeable losses during the year are as follows:

At beginning of the year 21,950 18,390Charge to profi t and loss account 3,300 3,609Provision utilised (2,330) – Translation difference (87) (49)


26. Short-term bank loans (unsecured)Included in short-term bank loans is an amount of $125.7 million (US$76.4 million) (2003: $130.8 million (US$76.6 million)) relating to bank loans taken up by US subsidiaries. These loans are denominated in US Dollars, unsecured and interests are charged at a range from 1.48% to 2.95% (2003: 1.53% to 1.57%) per annum, which are also the effective interest rates.




27. Lease obligationsA subsidiary leases certain land, buildings, and equipment from a foreign Airport Authority (the “Authority”) under a capital lease related to industrial revenue bonds issued by the Authority. Assets being leased are pledged as collateral against the bonds. The bonds have staggered maturity dates and the lease payments have been structured to coincide with the staggered maturities of the bonds with the fi nal payment due on 1 November 2012, the expiration date of the lease.

In connection with the bond issue, the subsidiary entered into a letter of credit agreement for approximately US$10,610,000, which is used to guarantee payments on the bonds in the event that the subsidiary is unable to make required lease payments. The letter of credit expires on 3 April 2007.

The subsidiary also leases certain land, buildings, and equipment from the Authority under an operating lease. The lease term coincides with the term of the capital lease.

The obligations under the fi nance lease to be paid by the subsidiary are as follows:

Minimum Present lease value of payment Interest payments $’000 $’000 $’000

2004 1 year to 5 years 11,398 (2,732) 8,666 After 5 years 6,791 (601) 6,190

Total 18,189 (3,333) 14,856 Discount (96) – (96)

18,093 (3,333) 14,760

Repayable: Within 1 year 1,760 After 1 year 13,000

14,760

2003 1 year to 5 years 11,817 (3,198) 8,619

After 5 years 9,237 (1,032) 8,205

Total 21,054 (4,230) 16,824Discount (143) – (143)

20,911 (4,230) 16,681

Repayable: Within 1 year 1,653 After 1 year 15,028

16,681

Lease terms do not contain restrictions concerning dividends, additional debt or further leasing.





28. Other creditors and accruals Group Company 2004 2003 2004 2003 $’000 $’000 $’000 $’000

Non-trade creditors 13,303 27,470 2,654 4,628Purchase of fi xed assets 357 466 – – Accrued operating expenses 564,164 603,445 29,650 16,826Accrued interest payable 740 233 – –

578,564 631,614 32,304 21,454

29. Deferred income Group 2004 2003 $’000 $’000

At beginning of the year 5,680 5,453Additions during the year 31 227

5,711 5,680Less : deferred income recognised to-date (3,656) (3,334)


Movements in deferred income recognised to-date during the year are as follows:

At beginning of the year 3,334 2,944Recognise in profi t and loss account 294 371Translation difference 28 19


30. Deferred tax liabilitiesAt beginning of the year 4,566 3,141Provision during the fi nancial year 22 1,432Translation difference 66 (7)


The deferred tax liabilities arise as a result of:

Excess of net book value over tax written down value of fi xed assets 1,471 2,920Exchange differences, net (53) 8Provision for debts and stocks (80) (229)Unremitted offshore interest income 3 1,557Other temporary differences 3,313 310

4,654 4,566

The deferred tax liability of the Company arises as a result of timing differences.




31. Long-term bank loansIncluded in long-term bank loans is an amount of $14.1 million (US$9 million) (2003: $13.7 million (US$8 million)) relating to bank loans taken up by a US subsidiary. These loans are denominated in US Dollars, secured by assets of a subsidiary and interests are charged at a range from 4.5% to 5.0% (2003: 1.02% to 5.00%) per annum, which are also the effective interest rates.

32. TurnoverTurnover represents invoiced value of sales/services less returns and discounts given and billings recognised on contracts as follows:

Group Note 2004 2003 $’000 $’000

Sale of goods 1,051,106 1,016,984Service income 1,897,021 1,802,005

2,948,127 2,818,989

33. Other operating income

Commission income 478 795Dividend income – quoted equity investments 1,608 1,533– unquoted equity investments 764 1,038Interest income – Singapore Government Securities – 131– related corporations 10,860 9,764– bank deposits 6,633 7,295– staff loans 39 58– others 1,794 1,230Provision for impairment in value of investments – unquoted long-term investments 11 – (8,259)– associated companies 10 (2,002) (353)Write-back of provision for impairment in value of investments – quoted long-term investments 11 184 190– unquoted long-term investments 11 1,781 – – amounts under fund management 18 570 10,036Profi t on sale of investments – long-term investments 1,151 2,385– joint ventures – 30Surplus arising from amounts under fund management 13,094 7,080Loss on dilution of interest in subsidiaries (285) – Others 9,778 4,987

46,447 37,940





34. Profi t from operations Group Note 2004 2003 $’000 $’000

Profi t from operations is arrived at:

After charging Auditors’ remuneration: Auditors of the Company

– current year 1,291 1,252 – over provision in respect of prior year (6) (27) Other auditors – current year 970 731 – (over)/under provision in respect of prior year (12) 31Non-audit fees: Current year – auditors of the Company 300 377 – other auditors 372 258Fees and remuneration of directors – current year 2,687 2,430Fees paid to a fi rm of which a director is a member 105 109Personnel expenses 35 825,822 799,894Depreciation of fi xed assets 8 77,691 86,445Provision/(write-back of provision) for: Stock obsolescence 9,927 9,630 Foreseeable losses 25 3,300 3,609 Doubtful debts – trade 20 (1,111) 25,472 Liquidated damages 25 742 (17,161) Loan receivables 13 (48) (183) Warranties 25 5,512 11,296Provision for impairment in value of investment in a joint venture 10 323 321Fixed assets written off 441 2,451Research, design and development expenses incurred 49,983 62,092Operating lease expenses 34,285 34,352Amortisation of goodwill, net – 2,533Amortisation of commercial and intellectual property rights 12 802 614Impairment of goodwill 12 158 – Impairment loss – fi xed assets 8 796 1,112 And crediting Grants and subsidies received 679 2,400Deferred income recognised 29 294 371




35. Personnel expenses Group 2004 2003 $’000 $’000

Wages and salaries * 688,820 657,383Pension contributions 50,943 59,467Other personnel expenses 86,059 83,044

825,822 799,894

* Includes directors’ remuneration of $1,974,603 (2003: $1,753,358).

36. Other income, netProfi t on disposal of fi xed assets 265 3,711Exchange loss, net (2,131) (1,201)Rental income 3,979 4,651Others 6,652 6,121

8,765 13,282

37. Financial expenses

Interest expense: Bank loans and overdrafts 3,337 1,359 Finance lease 760 829 Loans from minority shareholders of a subsidiary 85 28

4,182 2,216

38. Taxation Income tax on the profi t for the year:

Current tax 86,090 81,549 Deferred tax (1,618) 2,718 Associated companies 9,012 7,700

93,484 91,967 (Over)/under provision in respect of prior years: Current tax (7,074) (4,272) Deferred tax 646 (936)

87,056 86,759

GroupAs at 31 December 2004, subsidiaries of the Group have potential tax benefi ts of approximately $20,629,000 (2003: $21,623,000) arising from unutilised tax losses, unabsorbed wear and tear allowances and other temporary differences, which are available for set-off against future taxable profi ts. These tax benefi ts have not been recognised in the fi nancial statements due to the uncertainty of its recoverability. The use of these potential tax benefi ts is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the subsidiaries operate.





38. Taxation (continued)A reconciliation of the statutory tax rate to the Group’s effective tax rate applicable to pre-tax profi ts was as follows:

Group 2004 2003 $’000 $’000

Profi t before taxation 450,433 412,697

Taxation at statutory tax rate of 20% (2003: 22%) 90,087 90,793Adjustments : Income not subject to tax (4,059) (7,148) Write-back of provision not subject to tax (277) (2,258) Expenses not deductible for tax purposes 7,612 6,664 Depreciation not qualifi ed for capital allowance 139 – Higher effective tax rates of other countries 2,199 3,332 Overprovision in prior years (6,428) (5,208) Effect of change in statutory tax rates 4,196 – Income subject to concessionary tax rates (3,809) (3,971) Deferred tax assets not recognised 5,153 3,283 Deferred tax assets previously not recognised now recognised (2,814) – Utilisation of deferred tax assets previously not recognised (947) (1,326) Others (3,996) 2,598

Current fi nancial year’s taxation charge 87,056 86,759

39. Dividends Group and Company 2004 2003 $’000 $’000

Final tax exempt dividend paid in respect of the previous fi nancial year of 3.5 cents (2003: 3.0 cents per share less tax at 22%) 101,011 67,485Special dividend paid in respect of the previous fi nancial year of nil cents (2003: 10.2 cents per share less tax at 22%) – 229,447Special normal exempt dividend paid in respect of the previous fi nancial year of nil cents (2003: 1.8 cents) per share – 51,911Special tax exempt (one-tier) dividend paid in respect of the previous fi nancial year of 7.8 cents (2003: 3.5 cents) per share 225,110 100,000

326,121 448,843Additional fi nal dividend paid in respect of the previous year due to issue of shares under ESOS/ESOP before books closure date 371 1,063

326,492 449,906

The directors propose a fi nal tax exempt (one-tier) dividend of 4.0 cents per share (2003: 3.5 cents) amounting to $115,686,000 (2003: $101,011,000) and a special tax exempt (one-tier) dividend of 8.39 cents per share (2003: 7.8 cents) amounting to $242,653,000 (2003: $225,110,000), in respect of the year ended 31 December 2004. The dividends have not been recognised as a liability as at year end as it is subject to approval at the Annual General Meeting of the Company.




40. Earnings per share Basic earnings per share

The calculation for basic earnings per share is based on: Group 2004 2003 $’000 $’000

Consolidated profi t after taxation and minority interests 358,385 325,583

Group 2004 2003

Number of shares (‘000)The weighted average number of ordinary shares is arrived at as follows: Issued ordinary shares at beginning of the year 2,886,029 2,883,952 Weighted average number of ordinary shares issued during the year 3,584 988

Weighted average number of ordinary shares 2,889,613 2,884,940

Diluted earnings per share

When calculating diluted earnings per share, the weighted average number of shares is adjusted for the effect of all dilutive potential ordinary shares. The number of unissued shares under option granted under the ESOS/ESOP and their exercise prices are set out in Note 3. The average fair value of one ordinary share during the fi nancial year ended 31 December 2004 was $2.08 (2003: $1.82) per share. The weighted average number of ordinary shares adjusted for the unissued shares under option is as follows:

Number of shares (‘000)

Weighted average number of ordinary shares (used in the calculation of basic earnings per share) 2,889,613 2,884,940Weighted average number of unissued shares under option 60,357 42,683Number of shares that would have been issued at fair value (49,911) (37,386)

Weighted average number of ordinary shares (diluted) 2,900,059 2,890,237

41. Related party information

In addition to related party information disclosed elsewhere in the fi nancial statements, the Group has signifi cant transactions with related parties on terms agreed between the parties as follows:

Group 2004 2003 $’000 $’000

Sales and services rendered 74,433 78,464Purchases and services received 62,192 76,571Management and administrative fees paid 10,430 6,541Fixed assets purchases 23,300 3,855Acquisition of additional interest in a subsidiary 6,972 – Investment – 1,019Interest income 5,855 9,764Dividend income 714 – Loan 1,898 –





42. Cash and cash equivalents Group 2004 2003 $’000 $’000

Cash and cash equivalents comprise the following: Fixed deposits with fi nancial institutions 446,973 667,580 Cash and bank balances 111,276 178,781 Floating rate notes 382,000 694,500 Short-term loans to a related corporation 575,768 261,452 Bank overdrafts (356) (421)

1,515,661 1,801,892

43. Commitments (a) Capital Commitments Capital expenditure contracted but not provided for in the fi nancial statements 6,355 19,298

(b) Leases Future minimum lease payments under non-cancellable operating leases are as follows:

Within 1 year 25,368 27,817Within 2 to 5 years 49,109 55,742After 5 years 130,223 128,987

204,700 212,546

The Group has several operating lease agreements for leasehold land and building, offi ce premises and computers. The lease for the leasehold land and building and offi ce premises contain renewal options but not purchase options. Certain leases contain escalation clauses but do not provide for contingent rents. Lease terms do not contain restrictions on the Group activities concerning dividends, additional debt or further leasing.

The total amount of future minimum sub-lease payments expected to be received under non-cancellable sub-lease as at 31 December 2004 is approximately $12,000 (2003: $18,000).

(c) Investments(i) As at 31 December 2004, the Group has outstanding commitments in respect of uncalled capital to the extent

of $244,800 (2003: $244,800) in a subsidiary.

(ii) As at 31 December 2004, the Group has outstanding commitments in respect of uncalled capital and loan to the extent of $Nil (2003: $8.1 million (£2.7 million)) in a subsidiary.

(iii) As at 31 December 2004, the Group has outstanding commitments in respect of uncalled capital to the extent of $50.1 million (US$30.4 million) (2003: Nil) in an associated company.

(iv) As at 31 December 2004, in respect of investments in unquoted equity shares of venture capital fund companies, there is uncalled capital contribution amounting to $0.8 million (2003: $0.8 million) for the Group.




43. Commitments (continued) (c) Investments (continued)

(v) On 27 November 2004, an agreement was signed between ST Kinetics, Pacifi c City International Holdings Ltd and First Canton Trading Ltd to form an Equity Joint Venture Company, STAR Automotive Center (Guangzhou) Co., Ltd (“SACG”) in Guangzhou, China. The joint venture company will have a registered capital of RMB20 million to be contributed by each party in the proportion of 50%, 20% and 30% respectively, which is to be contributed over two instalments. At the date of this report, the shareholders are in the process of applying for a business license for SACG in its country of domicile. The fi rst instalment towards the capital of SACG is payable only upon the granting of the business licence.

(vi) On 15 December 2004, an agreement was signed between ST Kinetics, Sinostride Technology Co. Ltd and Zhejiang University Logistics and Investment Holdings Company to form an Equity Joint Venture Company, STAR Automotive Center (Zhejiang) Co., Ltd (“SACZ”) in Hangzhou, China. The joint venture company will have a registered capital of RMB15 million to be contributed by each party in the proportion of 70%, 25% and 5% respectively, which is to be contributed over two instalments. At the date of this report, the shareholders are in the process of applying for a business licence for SACZ in its country of domicile. The fi rst instalment towards the capital of SACZ is payable only upon the granting of the business licence.

(vii) On 15 November 2004, a participants’ agreement was signed between ST Engineering and Kazakhstan Engineering to set up a joint venture company, Kaz-ST Engineering Bastau Limited Liability Partnership in Kazakhstan. The 51% joint venture company will have a registered capital of $0.66 million (US$0.4 million).

(d) Foreign Exchange Forward ContractsAs at 31 December 2004, the Group has outstanding foreign exchange forward contracts amounting to approximately $112 million (2003: $83 million) for hedging against accounts receivable and payable and from purchase and sales commitments denominated mainly in Australian Dollars, British Sterling Pounds, Euros and US Dollars.

44. Contingent liabilities (unsecured)(a) Corporate guarantees given by the Company to third parties in respect of the provision of goods and services to a

subsidiary amounted to $6.9 million (2003: $6.6 million).

(b) Corporate guarantees given by the Company to banks in respect of loan facilities extended to certain US subsidiaries amounted to $156 million (US$95 million) (2003: $162 million (US$95 million)).

(c) Corporate guarantee given by the Company to a third party in respect of the performance of a contract amounted to $88.8 million (2003: $92.2 million).

(d) Corporate guarantees given by subsidiaries in respect of banking facilities amounted to $31.6 million (2003: $32.8 million).

(e) Corporate guarantees given by subsidiaries to third parties in respect of the provision of goods and services amounted to $4.3 million (2003: $5.2 million).

(f) Corporate guarantees given by a subsidiary to a third party in respect of the performance of contracts amounted to $105.8 million (2003: $109.7 million).

(g) Corporate guarantees given by a subsidiary in respect of banking facilities to a 50% joint venture company amounted to $15 million (2003: $15 million).

(h) Corporate guarantees given by a subsidiary to a third party in respect of the performance of a contract by a 50% joint venture company amounted to $37.2 million (2003: $36.6 million).





45. Segment information (a) Analysis by Business Segments

The Group is organised on a worldwide basis into four main operating segments, namely:

(i) Aerospace Provides engineering and maintenance services for a wide range of military and commercial aircraft through

its three business segments, Aircraft Maintenance & Modifi cation; Component/Engine Repair & Overhaul; and Engineering & Materials Services.

(ii) Electronics One of the largest system houses in the region specialising in design, development and integration of systems

and solutions. It is engaged in continuing research in the areas of information communication, infrastructure development, information security, mobile real-time systems and mobile commerce.

(iii) Land Systems Provides design and engineering services for military vehicles, weapon systems and munitions ranging from

manufacturing, upgrading, repair to maintenance and life cycle management. It also provides components and sub-systems design and development, and laboratory and industrial test services.

(iv) Marine Provides turnkey shipbuilding, shipconversion and shiprepair services. The shipyard’s ship design capabilities

provide it the edge in providing sophisticated, highly customised solutions for a wide spectrum of naval and commercial vessels.

Other operations include research and development, treasury, investment holding and provision of management, consultancy, warehousing and other support services.

Inter-segment pricing is on an arm’s length basis.




46. Segment information (continued) Land Aerospace Electronics Systems Marine Other Elimination Group $’000 $’000 $’000 $’000 $’000 $’000 $’000

2004Turnover External sales 1,118,016 625,908 591,164 484,138 128,901 – 2,948,127Inter-segment sales 293 10,773 3,136 226 410,082 (424,510) –

Total 1,118,309 636,681 594,300 484,364 538,983 (424,510) 2,948,127

Segment results 176,671 63,817 50,080 63,369 390,697 (384,596) 360,038Investment income, net 15,365 (250) (2,326) 4,994 (918) – 16,865Interest income 8,005 1,918 4,380 2,950 5,460 (3,387) 19,326

Operating profi t 200,041 65,485 52,134 71,313 395,239 (387,983) 396,229Financial expenses (965) (113) (85) (1,253) (1,938) 172 (4,182)Share of results of associated companies and joint ventures 37,475 345 20,576 – (10) – 58,386

Profi t before taxation 236,551 65,717 72,625 70,060 393,291 (387,811) 450,433Taxation (40,042) (14,215) (15,275) (16,045) (33,526) 32,047 (87,056)Minority interests (8,083) 1,301 1,790 – – – (4,992)

Net profi t 188,426 52,803 59,140 54,015 359,765 (355,764) 358,385

Assets 556,242 380,490 498,243 375,760 74,430 57,421 1,942,586Associated companies and joint ventures 98,643 40,301 120,202 6,664 2,363 (181) 267,992Other investments and fi nancial assets 690,730 147,504 248,019 268,395 988,001 (581,544) 1,761,105Unallocated assets 85,860

Total assets 4,057,543

Liabilities 724,716 436,711 675,028 414,120 61,758 (19,428) 2,292,905Loans and other fi nancial liabilities 70,241 356 6,581 108,664 141,713 (166,825) 160,730Unallocated liabilities 207,563

Total liabilities 2,661,198

Capital expenditure 56,944 16,012 5,638 2,952 2,361 – 83,907Depreciation and amortisation 34,117 8,750 11,322 22,240 2,064 – 78,493Impairment (gain)/loss (5,441) 2,604 2,743 (1,060) 1,898 – 744Other non-cash expenses 28 38 375 – – – 441





46. Segment information (continued) Land Aerospace Electronics Systems Marine Other Elimination Group $’000 $’000 $’000 $’000 $’000 $’000 $’000

2003Turnover External sales 1,091,867 614,259 717,006 387,272 8,585 – 2,818,989Inter-segment sales 306 6,841 705 51 374,660 (382,563) –

Total 1,092,173 621,100 717,711 387,323 383,245 (382,563) 2,818,989

Segment results 184,514 61,881 74,606 21,837 360,792 (366,161) 337,469Investment income, net 544 (2,530) 4,872 12,831 (2,070) – 13,647Interest income 7,056 2,614 5,039 1,688 2,302 (221) 18,478

Operating profi t 192,114 61,965 84,517 36,356 361,024 (366,382) 369,594Financial expenses (972) (48) (29) (1,184) (204) 221 (2,216)Share of results of associated companies and joint ventures 34,047 (269) 13,547 – (1) – 47,324Amortisation of goodwill on acquisition of associated companies – (258) (1,577) – – (170) (2,005)

Profi t before taxation 225,189 61,390 96,458 35,172 360,819 (366,331) 412,697Taxation (44,379) (15,137) (22,102) (4,364) (38,092) 37,315 (86,759)Minority interests (4,513) 1,765 2,182 – 211 – (355)

Net profi t 176,297 48,018 76,538 30,808 322,938 (329,016) 325,583

Assets 471,466 321,728 573,626 322,390 97,338 78,679 1,865,227Associated companies and joint ventures 84,719 10,213 92,829 6,987 2,313 (341) 196,720Other investments and fi nancial assets 837,315 248,469 332,033 241,720 840,212 (539,340) 1,960,409Unallocated assets 99,924

Total assets 4,122,280

Liabilities 765,203 448,979 786,895 344,550 58,045 32,482 2,436,154Loans and other fi nancial liabilities 70,233 421 4,615 116,956 61,492 (136,807) 116,910Unallocated liabilities 205,059

Total liabilities 2,758,123

Capital expenditure 35,519 7,426 9,120 9,301 584 – 61,950Depreciation and amortisation 39,640 8,669 19,721 22,810 587 170 91,597Impairment (gain)/loss 1,114 4,046 2,950 (10,072) 2,070 – 108Other non-cash expenses 2,181 9 261 – – – 2,451




46. Segment information (continued) (b) Analysis by country of incorporation

Turnover is based on the country of incorporation regardless of where the goods are produced or services rendered. Assets and additions to property, plant and equipment are based on the location of those assets.

Turnover Assets Capital expenditure 2004 2003 2004 2003 2004 2003 $’000 $’000 $’000 $’000 $’000 $’000

Asia 2,350,040 2,313,353 1,595,210 1,555,142 66,190 49,357USA 540,935 451,299 299,311 270,523 14,279 7,840Europe 50,893 40,524 25,176 15,564 2,146 3,918Others 6,259 13,813 22,889 23,998 1,292 835

2,948,127 2,818,989 1,942,586 1,865,227 83,907 61,950

(c) Analysis by geographical areas

Turnover is based on the location of customers regardless of where the goods are produced or services rendered.

Turnover 2004 2003 $’000 $’000

Asia 1,977,564 2,008,438USA 703,820 593,983Europe 126,571 115,139Others 140,172 101,429

2,948,127 2,818,989

47. Financial instrumentsFinancial risk management objectives and policiesThe main risks arising from the Group’s fi nancial instruments are interest rate, foreign exchange, market, liquidity and credit risks. The policies for managing each of these risks are summarised below.

Derivative fi nancial instruments are used to reduce the Group’s exposure to fl uctuations in foreign exchange rates and interest rates. It is the Group’s policy not to trade in derivative contracts for profi t.

Interest rate riskThe Group has cash balances placed with reputable banks, fi nancial institutions and a related corporation. The Group manages its interest rate risks on its interest income by placing the cash balances in varying maturities and interest rate terms.

The Group’s debt includes bank borrowings and lease commitments. The Group seeks to minimise its interest exposure through options to refi nance the debt instruments and/or enter into interest rate swaps, where appropriate over the duration of its borrowings.

Information relating to the Group’s interest rate exposure is also disclosed in the notes on the Group’s borrowings, investments and loan receivables, where applicable.





47. Financial instruments (continued)Foreign exchange riskThe Group’s foreign exchange risk arises both from its subsidiaries operating in foreign countries, which generate revenue and incur costs denominated in foreign currencies and from those operations of its local subsidiaries which are in foreign currencies.

The Group enters into forward foreign exchange contracts to hedge against its foreign exchange risk resulting from anticipated sale and purchase transactions denominated in foreign currencies, primarily in US dollars and Euro.

Derivative Financial Instrument RiskThe Group uses forward foreign exchange and options to hedge its net foreign currency exposures in the management of foreign exchange risk. These derivative instruments are used for hedging and not for speculative transactions in foreign exchange.

Market riskThe Group has investments in quoted equity shares and bonds, government-related securities and has placed funds with fund management companies. The market value of these investments will fl uctuate with market conditions. To mitigate market risk, the Group’s funds with fund managers are guaranteed 95% to 100% of their principal values at the end of the fund management period. Also, before a fund manager is given funds for management, its fi nancial strength is carefully considered.

Liquidity riskTo manage liquidity risk, the Group monitors its net operating cash fl ow and maintains an adequate level of cash and cash equivalents and secured committed funding facilities from fi nancial institutions. In assessing the adequacy of these facilities, management reviews its working capital requirements.

Credit riskCredit risk, or the risk of counterparties defaulting, is managed through the application of credit approvals, credit limits and monitoring procedures. Where appropriate, the Company or its subsidiaries obtain collaterals from customers or arrange master netting agreements. Cash terms, advance payments, and letters of credit or bank guarantees are required for customers of lower credit standing.

Counterparties to fi nancial instruments consist of prime fi nancial institutions and a related corporation, namely ST Treasury Services Limited, as disclosed in Notes 11 and 22.

As at 31 December 2004, there were no signifi cant concentrations of credit risk, except for 45% (2003: 59%) of trade debts relating to three major customers of the respective subsidiaries.

Fair value of fi nancial instrumentsFair value is defi ned as the amount at which the instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced or liquidation sale. Fair values are obtained from quoted market prices, discounted cash fl ow models and option pricing models as appropriate.

The following methods and assumptions are used to estimate the fair value of each class of fi nancial instruments:

Bank balances and other liquid funds and short-term receivablesThe carrying amount approximates fair value due to the relatively short-term maturity of these instruments.

Quoted and unquoted investmentsThe fair values of quoted investments are estimated based on quoted market prices for these investments. For unquoted investments, it is not practicable to determine the fair values because of the lack of quoted market prices and the assumptions used in valuation models to value these investments cannot be reasonably determined.




47. Financial instruments (continued)Short-term borrowings and other current liabilitiesThe carrying amount approximates the fair value because of the short period to maturity of these instruments.

Long-term bank loansThe carrying amount approximates the fair value as these instruments bear interest at variable rates.

Lease obligationsThe fair value of lease obligations is determined by discounting the relevant cash fl ows using current interest rates for similar instruments at balance sheet date.

DerivativesThe fair value of foreign exchange forward contracts is estimated based on the difference between the applicable forward rates prevailing at the balance sheet date and the contracted forward rates, multiplied by the notional amount and discounted to present value.

As at 31 December 2004, the fair values of fi nancial assets and fi nancial liabilities which do not approximate the carrying amounts in the balance sheet are presented in the following table:

2004 2003 Note Carrying Estimated Carrying Estimated amount fair value amount fair value $’000 $’000 $’000 $’000

(a) Assets Investment in a joint venture 10 6,664 (i) 6,987 (i) Long-term investments – Equity shares (quoted) 11 21,883 51,376 15,494 35,749 – Equity shares (unquoted) 11 20,599 (ii) 15,282 (ii) Short-term investments – Amounts under fund management 18 250,000 259,205 214,661 228,730

(i) It is not practicable to determine, with suffi cient reliability, the fair value of loan to a joint venture as the timing of the expected cash fl ows of the loan cannot be reasonably determined.

(ii) It is not practicable to determine with suffi cient reliability, the fair value of the unquoted equity investments held as long-term investments as they do not have quoted market prices in an active market nor are other methods of reasonably estimating the fair values readily available.

(b) Liabilities Lease obligations 27 14,760 14,760 16,681 16,681





47. Financial instruments (continued) 2004 2003 Note Contractual/ Contractual/ notional Estimated notional Estimated amount fair value amount fair value $’000 $’000 $’000 $’000

(c) Off-balance sheet fi nancial instruments Foreign exchange forward contracts: – to hedge accounts receivable (iii) 19,144 183 4,919 2 – to hedge confi rmed sales in foreign currencies (iii) 70,836 829 50,064 1,042 – to hedge fi rm purchase commitments in foreign currencies (iii) 21,658 370 27,615 1,151

(iii) The maturity dates of the foreign exchange forward contracts approximate the timing of the expected cash fl ow

of their respective hedged items, which are on varying periods up to 2 years from the fi nancial year end.

Disclosure of the nature of fi nancial instruments and their signifi cant terms and conditions that could affect the amount, timing and certainty of future cash fl ows is presented in the respective Notes to the fi nancial statements, when applicable.


1. Directors’ remunerationThe following information relates to remuneration of directors of Singapore Technologies Engineering Ltd:

Number of Directors in Remuneration Bands

2004 2003

Remuneration Bands $500,000 and above 1 1$250,000 to $499,999 – –Below $250,000 11 12

Total 12 13

Summary compensation table for the year ended 31 December 2004 (Group):

Stock options Directors’ granted in ExerciseName of director Salary* Bonus* fees Total 2004 price Exercisable period $ $ $ $ $ $

Peter Seah Lim Huat – – 63,000# 63,000 44,500 2.09 10.2.2005 to 9.2.2009 44,500 2.12 11.8.2005 to 10.8.2009Tan Pheng Hock 817,935 1,156,668 ## 1,974,603 200,000 2.09 10.2.2005 to 9.2.2014 200,000 2.12 11.8.2005 to 10.8.2014Koh Beng Seng – – 58,000 58,000 19,500 2.09 10.2.2005 to 9.2.2009Tan Guong Ching @ – – 12,950•† 12,950 19,500 2.12 11.8.2005 to 10.8.2009LG Ng Yat Chung – – 10,000• 10,000 – – –Dr Tan Kim Siew – – 10,000• 10,000 – – –Professor Lui Pao Chuen – – 62,189† 62,189 21,500 2.09 10.2.2005 to 9.2.2009 25,250 2.12 11.8.2005 to 10.8.2009Winston Tan Tien Hin – – 89,016† 89,016 48,500 2.09 10.2.2005 to 9.2.2009Lucien Wong Yuen Kuai – – 45,000 45,000 19,500 2.09 10.2.2005 to 9.2.2009 19,500 2.12 11.8.2005 to 10.8.2009Dr Phillip Nalliah Pillai – – 60,000† 60,000 31,000 2.09 10.2.2005 to 9.2.2009 31,000 2.12 11.8.2005 to 10.8.2009Quek Poh Huat – – 82,000† 82,000 33,000 2.09 10.2.2005 to 9.2.2009 33,000 2.12 11.8.2005 to 10.8.2009Venkatachalam Krishnakumar – – 49,000 49,000 – – –BG Bernard Tan Kok Kiang (Alternate to LG Ng Yat Chung) – – – – – – –

817,935 1,156,668 541,155 2,515,758 790,250

* The salary and bonus amount shown is inclusive of allowances and CPF and performance shares.@ Retired at AGM on 31 March 2004.• Fees for public sector Directors are payable to government agencies.† Includes fees for directorship in subsidiary/subsidiaries.# Fees are payable to Temasek Holdings (Private) Limited.## Fees payable to Mr Tan Pheng Hock of $170,768 includes fees for directorship in subsidiaries and are payable to

Singapore Technologies Engineering Ltd.

SGX Listing Manual Requirements31 December 2004(Currency – Singapore dollars)



2. Remuneration DataRemuneration data for employees earning S$100,000 and above per annum (as at 31 December 2004)

Total Compensation Bands ($) Total No. of Employees Total Dollar Value ($)

100,000 to 149,999 724 88,256,549150,000 to 199,999 163 27,901,453200,000 to 249,999 37 8,176,236250,000 to 499,999 34 11,733,297500,000 to 749,999 5 2,952,685750,000 to 999,999 3 2,578,4311,000,000 to 1,249,999 3 3,139,9081,250,000 to 1,499,999 2 2,755,7451,500,000 to 1,999,999 1 1,974,603

Total 972 149,468,907

Note: Total compensation comprises all staff salaries (including CPF for Singapore staff), overtime pay, variable bonuses, special bonuses, annual

wage supplement (13th month), dollar contribution by the Group under the Employees’ Share Ownership Scheme, benefi ts-in-kind plus overseas postees’ cost of living allowances.

3. Interested person transactionsInterested person transactions carried out during the fi nancial year pursuant to the Shareholders’ Mandate obtained under Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX”) by the Group are as follows:

Aggregate value of all transactions excluding Aggregate value of all transactions conducted transactions conducted under a shareholders’ under a shareholders’ mandate pursuant to mandate pursuant to Rule 920 of the Rule 920 of the SGX Listing Manual SGX Listing Manual 2004 2003 2004 2003 $’000 $’000 $’000 $’000

Transactions for the Sales of Goods and Services Keppel Corporation Ltd and its Associates – – 216 1,854SembCorp Industries Limited and its Associates – – 395 3,462SembCorp Logistics Ltd and its Associates – – 239 257Singapore Airport Terminal Services Limited and its Associates – – – 1,865Singapore Technologies Pte Ltd and its Associates – – 3,551 2,176Temasek Holdings (Private) Limited and its Associates – – 871 7,854

– – 5,272 17,468

Transactions for the Purchase of Goods and Services

Keppel Corporation Ltd and its Associates – – – 200SembCorp Industries Limited and its Associates – – 3,097 20,591SembCorp Logistics Ltd and its Associates – – – 269Singapore Airlines Limited and its Associates – – – 222Singapore Computer Systems Limited and its Associates – – 2,920 2,324Singapore Technologies Pte Ltd and its Associates – – 2,350 4,727Singapore Telecommunications Limited and its Associates – – 127 – SMRT Corporation Ltd and its Associates – – 100 – Temasek Holdings (Private) Limited and its Associates 12,721 – 10,180 457

12,721 – 18,774 28,790

SGX Listing Manual Requirements31 December 2004




3. Interested person transactions (continued) Aggregate value of all transactions excluding Aggregate value of all transactions conducted transactions conducted under a shareholders’ under a shareholders’ mandate pursuant to mandate pursuant to Rule 920 of the Rule 920 of the SGX Listing Manual SGX Listing Manual 2004 2003 2004 2003 $’000 $’000 $’000 $’000

Investment/Divestment/Leasing Transactions Singapore Technologies Pte Ltd and its Associates 16,222 5,523 800 1,239

Singapore Telecommunications Limited and its Associates – – 1,163 – Temasek Holdings (Private) Limited and its Associates – 2,357 – –

16,222 7,880 1,963 1,239

Treasury Transactions Singapore Technologies Pte Ltd and its Associates – – 969,877 996,632

Management and Support Services Singapore Technologies Pte Ltd and its Associates – – 6,181 6,541

Total Interested Person Transactions 28,943 7,880 1,002,067 1,050,670

SGX Listing Manual Requirements



Shareholding StatisticsAs at 11 February 2005

SHARE CAPITALAuthorised Share Capital : $500,000,000.00Issued and Paid-Up Capital : $289,738,571.90Class of Shares : Ordinary Shares of $0.10 each One Special Share of $0.10 held by the Minister for Finance (Incorporated)Voting Rights : One vote per share

SHAREHOLDING HELD IN HANDS OF PUBLICBased on the information available to the Company as at 11 February 2005, 36.48% of the issued ordinary shares of the Company is held by the public and therefore, Rule 723 of the Listing Manual issued by SGX-ST is complied with.

ANALYSIS OF SHAREHOLDINGS No. of No. of Range of Shareholdings Shareholders % Shares %

1 – 999 1,738 5.98 544,263 0.021,000 – 10,000 22,546 77.55 95,988,855 3.3110,001 – 1,000,000 4,759 16.37 166,884,479 5.761,000,001 and above 29 0.10 2,633,968,122 90.91

29,072 100.00 2,897,385,719 100.00

Number of Shares Direct Deemed Total Substantial Shareholder Interest Interest Interest %

Temasek Holdings (Private) Limited 1,599,168,719 14,630,000(1) 1,613,798,719 55.70The Capital Group Companies, Inc. – 226,571,364(2) 226,571,364 7.82

Notes: (1) Temasek Holdings (Private) Limited is deemed to have an interest in the following shares held by:

Name of Company No. of Shares

Keppel Corporation Group of Companies 13,370,000 DBS Group of Companies 1,260,000

(2) Details of the deemed interest are not available.


As at 11 February 2005Shareholding Statistics

MAJOR SHAREHOLDERS LIST – TOP 20 No. Name No. Of Shares Held %

1 Temasek Holdings (Private) Limited 1,599,168,719 55.192 Raffles Nominees Pte Ltd 389,765,880 13.453 DBS Nominees Pte Ltd 278,360,517 9.614 Citibank Nominees Singapore Pte Ltd 115,322,285 3.985 HSBC (Singapore) Nominees Pte Ltd 100,854,054 3.486 United Overseas Bank Nominees Pte Ltd 55,226,733 1.917 KI Investments (HK) Limited 13,370,000 0.468 Oversea Chinese Bank Nominees Pte Ltd 9,918,761 0.349 Morgan Stanley Asia (S’pore) 9,242,000 0.3210 DB Nominees (S) Pte Ltd 8,623,182 0.3011 UOB Kay Hian Pte Ltd 8,178,006 0.2812 OCBC Nominees Singapore 6,629,580 0.2313 Societe Generale S’pore Branch 5,099,496 0.1814 Merrill Lynch (S’pore) Pte Ltd 4,184,010 0.1515 OCBC Securities Private Ltd 3,845,349 0.1316 Capital Intelligence Limited 3,602,000 0.1317 Ang Beng Siong @ Hendrik Atmaja 2,706,947 0.0918 DBS Vickers Securities (S) Pte Ltd 2,551,799 0.0919 The Asia Life Assurance Society Ltd – Par Fund 2,401,809 0.0820 Shanwood Development Pte Ltd 2,077,000 0.07

2,621,128,127 90.47



STATEMENT OF PROFIT AND LOSS 2004 2003 $’000 $’000

Turnover 1,118,309 1,092,173Cost of sales (865,813) (824,359)

Gross profi t 252,496 267,814Other operating income 29,842 10,754Distribution and selling expenses (8,162) (19,744)Administrative expenses (57,908) (53,129)Other operating expenses (17,220) (17,010)

Profi t from operations 199,048 188,685Other income, net 993 3,429Financial expenses (965) (972)

199,076 191,142Share of results of associated companies and joint ventures 37,475 34,047

Profi t before taxation 236,551 225,189Taxation (40,042) (44,379)

Profi t after taxation 196,509 180,810Minority interests (8,083) (4,513)

Net profi t for the year 188,426 176,297

Sectoral Financial Review – Aerospace


BALANCE SHEET 2004 2003 $’000 $’000

Share capital and reserves 452,329 456,130Minority interests 31,771 32,334

484,100 488,464

Fixed assets 196,928 176,676Associated companies and joint ventures 98,643 84,719Long-term investments 7,514 8,406Intangible assets 2,004 56Loan receivables, non-current 577 657Deferred tax assets 31,218 37,777 Current assets Stocks and work-in-progress 128,890 102,709Debtors, deposits and prepayments 554,113 639,706Loan receivables, current 372 338Amounts under fund management 200,000 146,126Bank balances and other liquid funds 157,523 234,766

1,040,898 1,123,645 Current liabilities Advance payments from customers, current 128,887 129,782Creditors and accruals 431,613 471,668Provisions 47,100 45,118Progress billing in excess of work-in-progress 58,229 55,133Provision for taxation 93,903 104,949Short-term bank loans (unsecured) 3,083 1,057Lease obligations, current 1,558 1,553

764,373 809,260Net current assets 276,525 314,385 Non-current liabilities Advance payments from customers, non-current 59,011 63,126Deferred income 689 806Deferred tax liabilities 3,977 2,623Provision for staff retirement benefi ts 32 34Lease obligations, non-current 12,884 14,907Loan from holding company 52,716 52,716

129,309 134,212 484,100 488,464




STATEMENT OF CASH FLOWS 2004 2003 $’000 $’000

Net cash from operating activities 83,769 206,200 Net cash (used in)/from investing activities (84,312) 33,205 Proceeds from sale of fi xed assets 231 11,412 Dividends from associated companies 25,689 48,657 Dividends from investments 69 198 Proceeds from sale and maturity of investments 7,153 7,969 Proceeds from maturity and withdrawal of amount under fund management 8,228 – Acquisition of amounts under fund management (53,304) – Purchase of fi xed assets (56,944) (35,519) Purchase of investments (4) (1,005) Acquisition of additional interest in subsidiaries (8,361) – Acquisition of an associated company (8,950) – Exchange difference on investment activities 1,881 1,493 Net cash used in fi nancing activities (186,725) (191,226) Capital contribution from minority shareholders of a subsidiary 469 1,163 Repayment of short-term loan from a related corporation – (3,461) Repayment of lease obligations (1,461) (1,602) Dividends paid to shareholders (183,719) (174,912) Dividends paid to minority shareholders of subsidiaries (2,504) (2,897) Interest paid (979) (1,000) Proceeds/(repayment) of short-term loan 1,943 (8,250) Exchange difference on fi nancing activities (474) (267) Net (decrease)/increase in cash and cash equivalents (187,268) 48,179Cash and cash equivalents at beginning of year 682,610 635,467Exchange difference on cash and cash equivalents at beginning of year (2,222) (1,036)

Cash and cash equivalents at end of year 493,120 682,610



VALUE ADDED STATEMENT 2004 2003 2002 2001 2000 $’000 $’000 $’000 $’000 $’000

Value added from: Revenue earned 1,118,309 1,092,173 1,044,110 1,034,033 959,130Bought in materials and services (507,429) (473,460) (485,544) (466,313) (431,211)

Gross value added 610,880 618,713 558,566 567,720 527,919Income from investments and interest 23,370 7,599 11,435 26,284 34,806Extraordinary items – – – – –Exchange gain/(loss) (770) (906) (2,606) 4,000 (388)Other non-operating income 8,235 7,490 9,884 2,626 5,089Share of results of associated companies and joint ventures 37,475 34,047 39,333 32,062 39,022

Total value added 679,190 666,943 616,612 632,692 606,448

Distribution of value added To employees in wages, salaries and benefi ts 403,411 375,946 342,724 364,065 340,024To government in income and other taxes 42,609 46,611 54,807 56,083 65,846To providers of capital on: • Interest paid on borrowings 965 972 2,307 3,056 3,969• Dividends to shareholder 183,719 174,912 156,774 126,105 88,653

630,704 598,441 556,612 549,309 498,492

Balance retained in/(applied from) business Depreciation 34,117 39,604 38,734 35,337 36,751Impairment of assets 852 1,112 1,882 2,105 –Retained profi ts (9,810) (759) (5,116) 15,359 31,711

25,159 39,957 35,500 52,801 68,462

Non-production cost and income Bad debts 727 21,852 15,671 298 5,076Income from investments and interest 23,370 7,599 11,435 26,284 34,806Extraordinary items – – – – –Exchange gain/(loss) (770) (906) (2,606) 4,000 (388)

23,327 28,545 24,500 30,582 39,494

Total distribution 679,190 666,943 616,612 632,692 606,448




FINANCIAL HIGHLIGHTS 2004 2003 2002 2001 2000 $’000 $’000 $’000 $’000 $’000

Turnover 1,118,309 1,092,173 1,044,110 1,034,033 959,130Profi t before tax 236,551 225,189 212,993 225,682 218,991Profi t after tax (before extraordinary items) 188,426 176,297 155,580 160,338 151,038Shareholders’ funds 452,329 456,130 458,962 469,006 381,397Total assets 1,377,782 1,431,936 1,434,821 1,474,808 1,323,940Net tangible assets 450,325 456,074 458,870 469,006 381,397Return on turnover (%) 17.6 16.6 15.4 15.9 16.1Earnings per share (¢) 94.21 88.15 77.79 80.17 54.70Return on equity (%) 41.7 38.7 33.9 34.2 39.6Return on total assets (%) 14.3 12.6 11.2 11.1 11.7Net tangible assets per share (¢) 225.2 228.0 229.4 234.5 138.1 Productivity data Average staff strength (number) 4,869 4,877 4,716 4,480 4,332Sales per employee ($) 229,679 223,944 221,397 230,811 221,406Profi t after tax per employee ($) 38,699 36,149 32,990 35,790 34,866Employment costs 403,974 376,390 343,194 364,635 340,373Employment costs per $ of turnover ($) 0.36 0.34 0.33 0.35 0.35 Economic value added 137,838 149,843 118,054 110,371 110,108Economic value added spread (%) 20.4 22.7 17.9 17.4 16.2Economic value added per employee ($) 28,309 30,724 25,033 24,636 25,417 Value added 679,190 666,943 616,612 632,692 606,448Value added per employee ($) 139,493 136,753 130,749 141,226 139,993Value added per $ of employment costs ($) 1.68 1.77 1.80 1.74 1.78Value added per $ of gross fi xed assets ($) 1.16 1.24 1.14 1.24 1.32Value added per $ of turnover ($) 0.61 0.61 0.59 0.61 0.63




Turnover 636,681 621,100Cost of sales (494,803) (479,151)

Gross profi t 141,878 141,949Other operating income 1,877 106Distribution and selling expenses (28,044) (25,397)Administrative expenses (33,098) (32,728)Other operating expenses (18,634) (23,844)

Profi t from operations 63,979 60,086Other income, net 1,506 1,879Financial expenses (113) (48)

65,372 61,917Share of results of associated companies and joint ventures 345 (269)Amortisation of goodwill on acquisition of associated companies – (258)


Profi t after taxation 51,502 46,253Minority interests 1,301 1,765


Sectoral Financial Review – Electronics



BALANCE SHEET 2004 2003 $’000 $’000

Share capital and reserves 108,095 107,882Minority interests 5,505 5,081

113,600 112,963

Fixed assets 32,179 25,162Associated companies and joint ventures 40,301 10,213Long-term investments 37,178 22,120Intangible assets 2,850 7,988Long-term receivables 18,722 9,280Deferred tax assets 10,740 10,064 Current assets Stocks and work-in-progress 188,840 189,751Debtors, deposits and prepayments 190,825 197,738Loan receivables, current 47 72Amounts under fund management – 10,000Bank balances and other liquid funds 58,052 110,195

437,764 507,756 Current liabilities Advance payments from customers, current 37,855 63,632Creditors and accruals 278,558 267,218Provisions 27,386 35,579Progress billings in excess of work-in-progress 37,213 17,829Provision for taxation 28,755 27,715Bank overdrafts (secured) 356 421

410,123 412,394Net current assets 27,641 95,362 Non-current liabilities Advance payments from customers, non-current 55,187 66,212Deferred income 259 373Deferred tax liabilities 313 309Provision for staff retirement benefi ts 252 290Hire purchase creditors – 42

56,011 67,226 113,600 112,963




Net cash used in operating activities (4,178) (36,297) Net cash used in investing activities (53,583) (19,942) Proceeds from sale of fi xed assets 134 25 Dividend from an associated company 714 119 Dividends from investments 1,589 1,516 Proceeds from sale of investment – 116 Proceeds from maturity of amounts under fund management 10,948 – Purchase of fi xed assets (16,012) (7,426) Purchase of investments (16,322) (7,304) Investment in associated companies (28,595) (6,598) Acquisition of a subsidiary – (390) Dilution of interest in subsidiaries (116) – Loans to an investee company (5,682) – Loan to an associated company (241) – Net cash used in fi nancing activities (48,410) (45,598) Capital contribution from minority shareholders of subsidiaries 4,732 50 Dividends paid to shareholder (52,800) (45,600) Dividend paid to minority shareholders of a subsidiary (229) – Interest paid (113) (48) Net decrease in cash and cash equivalents (106,171) (101,837)Cash and cash equivalents at beginning of year 207,851 308,793Exchange difference on cash and cash equivalents at beginning of year (280) 895






Value added from: Revenue earned 636,681 621,100 579,376 498,477 423,533Bought in materials and services (396,458) (389,430) (351,621) (295,208) (247,801)

Gross value added 240,223 231,670 227,755 203,269 175,732Income from investments and interest 1,953 84 4,288 8,253 8,409Exchange gain/(loss) (263) 385 (76) 998 782Other operating income/(expenses) 209 22 – – –Other non-operating income/(expenses) 1,484 1,494 1,398 (6,551) 1,974Share of results of associated companies and joint ventures 345 (269) (840) (840) (220)Amortisation of goodwill on acquisition of associated companies – (258) (73) (27) –


Distribution of value added To employees in wages, salaries and benefi ts 166,610 161,920 167,955 145,699 134,482To government in income and other taxes 14,821 15,686 15,363 15,763 16,632To providers of capital on: • Interest paid on borrowings 113 48 5 5 7• Dividends to shareholder 52,800 45,600 40,260 24,157 19,040

234,344 223,254 223,583 185,624 170,161

Balance retained in/(applied from) business Depreciation 8,750 7,884 8,332 7,242 5,329Retained profi ts (2,886) 969 (2,497) 3,466 2,067

5,864 8,853 5,835 10,708 7,396

Non-production cost and income Bad debts 2,053 552 (1,178) (481) (71)Income from investments and interest 1,953 84 4,288 8,253 8,409Exchange gain/(loss) (263) 385 (76) 998 782

3,743 1,021 3,034 8,770 9,120





Turnover 636,681 621,100 579,376 498,477 423,533Profi t before tax 65,717 61,390 56,699 52,151 46,591Profi t after tax (before extraordinary items) 52,803 48,018 42,800 34,499 30,580Shareholders’ funds 108,095 107,882 105,121 102,936 78,746Total assets 579,734 592,583 697,544 691,397 592,884Net tangible assets 103,297 99,894 99,968 102,144 78,746Earnings per share (¢) 50.27 45.71 40.74 32.84 29.11Return on turnover (%) 8.1 7.4 7.2 6.9 7.2Return on equity (%) 48.8 44.5 40.7 33.5 38.8Return on total assets (%) 9.1 8.1 6.1 5.0 5.2Net tangible assets per share (¢) 98.3 95.1 95.2 97.2 75.0 Productivity data Average staff strength (number) 2,649 2,662 2,586 2,310 2,030Sales per employee ($) 240,348 233,321 224,043 215,791 208,637Profi t after tax per employee ($) 19,933 18,038 16,551 14,935 15,064Employment costs 166,634 161,965 167,976 145,747 134,135Employment costs per $ of turnover ($) 0.26 0.26 0.29 0.29 0.32 Economic value added 45,892 39,299 20,157 24,639 22,957Economic value added spread (%) 29.5 27.0 13.8 18.6 18.8Economic value added per employee ($) 17,324 14,763 7,795 10,666 11,309 Value added 243,951 233,128 232,452 205,102 186,677Value added per employee ($) 92,092 87,576 89,889 88,789 91,959Value added per $ of employment costs ($) 1.46 1.44 1.38 1.41 1.39Value added per $ of gross fi xed assets ($) 2.10 2.22 2.31 2.11 2.08Value added per $ of turnover ($) 0.38 0.38 0.40 0.41 0.44




Sectoral Financial Review – Land Systems




Profi t from operations 48,695 79,105Other income, net 3,439 5,412Financial expenses (85) (29)

52,049 84,488Share of results of associated companies and joint ventures 20,576 13,547Amortisation of goodwill on acquisition of associated companies – (1,577)


Profi t after taxation 57,350 74,356Minority interests 1,790 2,182




BALANCE SHEET 2004 2003 $’000 $’000

Share capital and reserves 164,471 183,807Minority interests 660 2,215

165,131 186,022

Fixed assets 63,012 68,654Associated companies and joint ventures 120,202 92,829Long-term investments 1,744 4,613Intangible assets 10,263 14,966Loan receivables, non-current – 2Deferred tax assets 17,034 15,858 Current assets Stocks and work-in-progress 275,726 271,863Debtors, deposits and prepayments 281,572 361,643Loan receivables, current 58 119Amounts under fund management – –Bank balances and other liquid funds 113,887 183,799

671,243 817,424 Current liabilities Advance payments from customers, current 117,337 156,074Creditors and accruals 200,902 245,599Provisions 59,550 66,121Provision for taxation 36,555 35,278Long-term loan, current 317 303Short-term loans from minority shareholders of a subsidiary 1,192 915

415,853 504,290Net current assets 255,390 313,134 Non-current liabilities Advance payments from customers, non-current 297,064 317,934Deferred income 1,107 1,167Deferred tax liabilities 203 1,536Loan from holding company 3,203 3,203Due to related company (non-trade) 743 –Long-term loan from minority shareholder of a subsidiary 194 194

302,514 324,034 165,131 186,022





Net cash from operating activities 21,472 8,496 Net cash (used in)/from investing activities (12,071) 15,329 Proceeds from sale and maturity of amounts under fund management 2 11,577 Proceeds from sale of fi xed assets 214 3,146 Proceeds from sale of unquoted long-term investments 9 27 Dividends from unquoted long-term investments 358 414 Dividends from associated company 5,553 4,563 Purchase of fi xed assets (5,638) (9,120) Purchase of commercial and intellectual property rights – (3,688) Proceeds from capital redemption of long-term investments 86 9,460 Loan to investee entity – (886) Acquisition/additional investment of associated company and joint venture (12,655) (201) Exchange difference on investing activities – 37 Net cash used in fi nancing activities (77,835) (104,111) Interest paid (85) (29) Proceeds from loans from minority shareholders 230 905 Repayment of long-term loan, current – (34) Dividends paid to shareholder of the Company (78,000) (105,000) Exchange difference on fi nancing activities 20 47 Net decrease in cash and cash equivalents (68,434) (80,286)Cash and cash equivalents at beginning of year 332,959 413,293Exchange difference on cash and cash equivalents at beginning of year (190) (48)






Gross value added 170,818 230,300 267,744 215,569 196,320Income from investments and interest 2,068 9,911 11,166 30,625 30,220Exchange gain/(loss) (796) (806) (1,568) 3,776 (201)Other non-operating income 4,638 6,652 3,385 4,200 3,255Share of results of associated companies and joint ventures 20,576 11,970 3,123 7,141 6,179


Distribution of value added To employees in wages, salaries and benefi ts 116,115 135,401 169,147 156,582 128,354To government in income and other taxes 16,294 23,401 (2,243) (135) 21,333To providers of capital on: • Interest paid on borrowings 85 29 110 144 374• Dividends to shareholder 78,000 105,000 40,000 50,500 32,000

210,494 263,831 207,014 207,091 182,061

Balance retained in/(applied from) business Depreciation 10,594 15,560 17,603 18,155 21,707Retained profi ts (21,194) (35,588) 53,702 14,472 2,825

(10,600) (20,028) 71,305 32,627 24,532

Non-production cost and income Bad debts (3,862) 5,119 (4,067) (12,808) (839)Income from investments and interest 2,068 9,911 11,166 30,625 30,220Exchange gain/(loss) (796) (806) (1,568) 3,776 (201)

(2,590) 14,224 5,531 21,593 29,180





Turnover 594,300 717,711 711,160 607,465 528,241Profi t before tax 72,625 96,458 96,877 97,108 84,650Profi t after tax (before extraordinary items) 59,140 76,538 100,602 100,223 64,948Shareholders’ funds 164,471 183,807 213,373 152,969 95,075Total assets 883,498 1,014,346 1,169,273 1,357,664 1,513,789Net tangible assets 149,890 168,841 198,040 152,760 95,075Return on turnover (%) 9.7 10.4 13.9 16.6 12.3Earnings per share (¢) 49.05 63.48 83.44 83.13 53.87Return on equity (%) 36.0 41.6 47.1 65.5 68.3Return on total assets (%) 6.5 7.3 8.5 7.4 4.3Net tangible assets per share (¢) 124.3 140.0 164.3 126.7 78.9 Productivity data Average staff strength (number) 2,389 2,483 2,738 2,858 2,679Sales per employee ($) 248,765 289,050 259,737 212,549 197,178Profi t after tax per employee ($) 24,755 30,825 36,743 35,068 24,243Employment costs 116,040 135,417 169,111 156,550 128,372Employment costs per $ of turnover ($) 0.20 0.19 0.24 0.26 0.24 Economic value added 35,918 62,799 81,320 25,721 41,755Economic value added spread (%) 11.7 18.2 29.4 8.9 17.6Economic value added per employee ($) 15,035 25,292 29,701 9,000 15,586 Value added 197,304 258,027 283,850 261,311 235,773Value added per employee ($) 82,589 103,917 103,671 91,431 88,008Value added per $ of employment costs ($) 1.70 1.91 1.68 1.67 1.84Value added per $ of gross fi xed assets ($) 0.66 0.84 0.91 0.84 0.76Value added per $ of turnover ($) 0.33 0.36 0.40 0.43 0.45



Sectoral Financial Review – Marine




Profi t from operations 68,550 33,981Other income, net 2,763 2,375Financial expenses (1,253) (1,184)






BALANCE SHEET 2004 2003 $’000 $’000

Share capital and reserves 107,779 109,316

Fixed assets 113,353 138,692Associated companies and joint ventures 6,664 6,987Long-term investments 332 923Loan receivables, non-current 81 110Deferred tax assets 12,079 10,620 Current assets Stocks and work-in-progress 57,901 43,166Debtors, deposits and prepayments 357,313 265,681Loan receivables, current 44 78Other assets 17,202 20,325Amounts under fund management 50,000 50,000Bank balances and other liquid funds 49,587 57,690

532,047 436,940 Current liabilities Advance payments from customers, current 120,531 116,957Creditors and accruals 201,970 158,517Provisions 32,714 24,050Progress billings in excess of work-in-progress 56,422 46,479Provision for taxation 32,176 21,997Lease obligations, current 64 63

443,877 368,063Net current assets 88,170 68,877 Non-current liabilities Loans from a related company 108,588 116,814Lease obligations, non-current 12 79Accrued staff benefi ts 4,300 –

112,900 116,893 107,779 109,316




Net cash from operating activities 73,055 40,188 Net cash from investing activities 7,836 46,790 Dividends from investments 356 416 Investment in a joint venture – (256) Proceeds from capital redemption of long-term investments 2,125 2,194 Proceeds from liquidation of a joint venture – 30 Proceeds from sale and maturity of investments 3,104 52,132 Proceeds from sale of fi xed assets 235 – Purchase of fi xed assets (2,952) (9,100) Refund of foreshore lease premium 2,808 – Exchange difference on investing activities 2,160 1,374 Net cash used in fi nancing activities (64,678) (15,346) Dividends paid to shareholder of the Company (55,133) – Interest paid (1,253) (1,184) Repayment of lease obligations (66) (59) Repayment of loans and borrowings (4,968) (12,183) Exchange difference on fi nancing activities (3,258) (1,920) Net increase in cash and cash equivalents 16,213 71,632Cash and cash equivalents at beginning of year 200,695 129,271Exchange difference on cash and cash equivalents at beginning of year (472) (208)





VALUE ADDED STATEMENT

2004 2003 2002 2001 2000 $’000 $’000 $’000 $’000 $’000


Gross value added 186,321 137,917 90,664 107,497 112,212Income from investments and interest 7,944 14,520 18,023 17,818 4,039Exchange gain/(loss) (231) 47 4 27 (29)Other non-operating income 6,152 4,401 3,324 993 1,384Share of results of associated companies and joint ventures – – – (3,351) (1,915)


Distribution of value added To employees in wages, salaries and benefi ts 103,798 97,909 54,676 44,666 42,916To government in income and other taxes 18,506 6,595 13,079 18,028 21,029To providers of capital on: • Interest paid on borrowings 1,253 1,184 556 – 10• Dividends to shareholder 55,133 – 70,000 32,999 54,968

178,690 105,688 138,311 95,693 118,923

Balance retained in/(applied from) business Depreciation 22,241 22,811 13,338 13,751 12,142Retained profi ts (8,831) 16,241 (58,826) (5,241) (15,148)

13,410 39,052 (45,488) 8,510 (3,006)

Non-production cost and income Bad debts 373 (2,422) 1,165 936 (4,236)Income from investments and interest 7,944 14,520 18,023 17,818 4,039Exchange gain/(loss) (231) 47 4 27 (29)

8,086 12,145 19,192 18,781 (226)





Turnover 484,364 387,323 281,231 335,770 359,112Profi t before tax 70,060 35,172 41,132 65,631 63,935Profi t after tax (before extraordinary items) 54,015 30,808 29,201 45,671 43,830Shareholders’ funds 107,779 109,316 78,808 119,617 93,174Total assets 664,556 594,272 530,419 509,388 479,205Net tangible assets 107,779 109,316 78,808 119,617 93,174Earnings per share (¢) 27.62 15.75 14.93 23.35 22.41Return on turnover (%) 11.2 8.0 10.4 13.6 12.2Return on equity (%) 50.1 28.2 37.1 38.2 47.0Return on total assets (%) 8.1 5.2 5.5 9.0 9.1Net tangible assets per share (¢) 55.1 55.9 40.3 61.2 47.6 Productivity data Average staff strength (number) 1,514 1,490 1,168 934 951Sales per employee ($) 319,923 259,948 240,780 359,497 377,615Profi t after tax per employee ($) 35,677 20,677 25,001 48,898 46,088Employment costs 103,964 98,028 54,809 44,836 43,077Employment costs per $ of turnover ($) 0.21 0.25 0.19 0.13 0.12 Economic value added 32,775 10,363 5,056 28,897 38,747Economic value added spread (%) 11.8 3.9 2.4 16.5 25.0Economic value added per employee ($) 21,648 6,955 4,329 30,939 40,743 Value added 200,186 156,885 112,015 122,984 115,691Value added per employee ($) 132,223 105,292 95,903 131,675 121,652Value added per $ of employment costs ($) 1.93 1.60 2.04 2.74 2.69Value added per $ of gross fi xed assets ($) 0.70 0.54 0.39 0.68 0.67Value added per $ of turnover ($) 0.41 0.41 0.40 0.37 0.32



Group Structure – Singapore Technologies Engineering LtdSubsidiaries and Associated Companies (As at 16 January 2005)

Singapore Technologies Aerospace Ltd (100%)

Singapore Technologies Electronics Limited (100%)

Singapore Technologies Kinetics Ltd (100%)

Singapore Technologies Marine Ltd (100%)

FusionTech Pte. Ltd. (100%)

Singapore Technologies Dynamics Pte Ltd (100%)

ST Synthesis Pte Ltd (100%)

Vision Technologies Systems, Inc. (100%)

NanoScience Innovation Pte Ltd (38.33%)

+ Ceased operations in 2003* Balance 1% held by DalFort Aerospace GP, Inc.** Balance 1% held by San Antonio Aerospace GP, LLCItalics Indicates Associated Companies. Others are Subsidiaries (both directly and indirectly held)

Vision Technologies Aerospace Incorporated (100%)

Singapore Technologies Engineering (USA) Inc. (100%)

SA Supplies (USA) Inc. (100%)

Vision Technologies Marine, Inc. (100%)

Vision Technologies Kinetics, Inc. (100%)

Vision Technologies Land Systems, Inc. (100%)

VT Systems, Inc.(100%)

San Antonio Aerospace GP, LLC(100%)

San Antonio Aerospace LP(99%)**

ST Mobile Aerospace Engineering, Inc. (100%)

VT Halter Marine, Inc.(100%)

Halter-Bollinger Joint Venture LLC (50%)

Miltope Corporation(100%)

VT Dimensions, Inc. (100%)

Asian Aerospace 2006 Pte. Ltd. (50%)

KAZ-ST Engineering Bastau Limited Liability Partnership

(51%)

DalFort Aerospace GP, Inc.+

(100%)

DalFort Aerospace, L.P. +

(99%)*


Group Structure – Singapore Technologies Aerospace LtdSubsidiaries and Associated Companies (As at 16 January 2005)

ST Aerospace Engineering Pte Ltd (100%)

ST Aerospace Engines Pte Ltd(100%)

ST Aerospace International Structures Pte Ltd (100%)

ST Aerospace Systems Pte Ltd(100%)

ST Aerospace Supplies Pte Ltd (100%)

Italics Indicates Associated Companies. Others are Subsidiaries (both directly and indirectly held)

ST Airport Ground Services Pte Ltd(100%)

Visiontech Investment Pte Ltd (100%)

ST Aviation Services Co Pte Ltd(80%)

ST Aviation Resources Pte Ltd(100%)

Singapore Aerospace Kabushiki Kaisha(100%)

Singapore Aerospace (UK) Investments Pte Ltd(100%)

Bournemouth Aviation Services Company Limited (81%)

Singapore British Engineering Pte Ltd(51%)

Visiontech Engineering Pte Ltd (51%)

1988 JV Pte. Ltd.(Formerly known as Asian Aerospace Pte Ltd) (50%)

Shanghai Technologies Aerospace Company Limited (49%)

Turbine Overhaul Services Pte Ltd(49%)

Turbine Coating Services Pte Ltd(24.5%)

Pacifi c Flight Services Pte Ltd (100%)

ST PAE Holdings Pty Ltd (100%)

Composite Technology International Pte Ltd(33.33%)

Eurocopter South East Asia Private Limited(25%)

Singapore Precision Repair and Overhaul Pte Ltd (50%)

iShopAero Pte Ltd(100%)

ST Aviation Resources 1 Limited(100%)

Singapore Technologies Engineering (Europe) Ltd (100%)

Airline Rotables Limited(100%)

Aerospace Engineering Services Pty Ltd Unit Trust (50%)

Aerospace Engineering Services Pty Ltd(50%)



Group Structure – Singapore Technologies Electronics LimitedSubsidiaries and Associated Companies (As at 16 January 2005)

Agilis Communication Technologies Pte Ltd(100%)

CET Technologies Pte Ltd(100%)

SES Systems Pte Ltd(100%)

ST Electronics (Taiwan) Limited(100%)

SEEL Electronic & Engineering Sdn Bhd(100%)

iTS Technologies Pte Ltd(100%)

ST Electronics (Shanghai) Co., Ltd(100%)

Ripple Systems Pty Ltd(70%)

Intelect Technologies, Incorporated(78.57%)

ST LogiTrack Pte Ltd(50%)

GFM Electronics S.A. de C.V.(50%)

TranSys Pte Ltd(50%)

Mobile Solutions and Payment Services Pte Ltd (21.57%)

Trusted Hub Ltd (21.8%)

RF Korea Inc.(22%)

PolarSat Inc(40.86%)

ST Electronics (Sichuan) Co., Ltd (100%)

DigiSAFE Pte Ltd(100%)

Sentry Technologies Pte Ltd(35%)

Infowave Pte Ltd(43%)

iWOW Technology Pte Ltd(26.6%)

mPayment Pte Ltd(31.78%)

Green Dot Internet Services Pte Ltd(23.8%)

Xinke Information Systems Ltd(100%)

WizVision Pte Ltd(22.8%)

Sandz Solutions (Singapore) Pte Ltd(25%)

DataMark Technologies Pte Ltd(61.12%)

Stegami Pte Ltd(37.6%)

GT&T Engineering Pte Ltd(100%)

Interactive Visual Laboratory Pte Ltd (100%)

ST Education & Training Private Limited(70%)

Knowledge Alive Pte. Ltd.(49.59%)

Comat Training Services Pte Ltd(100%)

INFA Systems Limited (70%)

ECS Holdings Limited (21.35%)

Prescient Systems & Technologies Pte. Ltd.(51%)

Italics Indicates Associated Companies. Others are Subsidiaries (both directly and indirectly held)

ST Training & Simulation Pte Ltd(100%)

ST Electronics-PCI Co. Ltd.(51%)

STET Maritime Education Pte. Ltd.(100%)


Group Structure – Singapore Technologies Kinetics LtdSubsidiaries and Associated Companies (As at 16 January 2005)

# Expected to cease as a subsidiary in January 2005+ Shares of this subsidiary are held in trust by Directors of the subsidiary* In members’ voluntary liquidationItalics Indicates Associated Companies. Others are Subsidiaries (both directly and indirectly held)

Ordnance Development and Engineering Company of Singapore (1996) Private Limited

(100%)

Singapore Test Services Private Limited (100%)

Chartered Ammunition Industries Pte Ltd(100%)

Expert Systems Pte Ltd(100%)

Unicorn International Pte Limited(100%)

Allied Ordnance of Singapore (Pte) Limited(100%)

CIS - Oerlikon Pte Ltd(50%)

Founders Industries Pte Ltd(100%)*

ST Automotive Industrial Pte Ltd(100%)

STA Investment Pte Ltd(100%)

Mobility Systems Pte Ltd(100%)

Singapore Commuter Private Limited(100%)

Singapore Ordnance Engineering Pte. Ltd.(100%)

ST Automotive (Vietnam) Pte Ltd(100%)

STA Detroit Diesel-Allison (Singapore) Pte Ltd (100%)

Shanghai Elite Electric Vehicles Co., Ltd(100%)

STA Inspection Pte Ltd(100%)

Kinetics Systems (Shanghai) Co. Ltd.(100%)

Autonomous Technology Pte Ltd(100%)+

Solectria Corporation#

(50.8%)

Beijing Zhonghuan Kinetics Heavy Vehicles Co. Ltd. (50%)

CityCab Pte Ltd(46.5%)

SAO Industrial Services Pte Ltd(100%)

Nusantara Technologies Sdn. Bhd.(49%)

Chartered Pyrotechnic Industries Private Limited(51%)

SMART Systems Pte Ltd(50%)

Takata CPI Singapore Pte Ltd(49%)

Defence Electronics of Singapore Pte Ltd (49%)

Ordnance Development and Engineering Company of Singapore (Private) Limited (100%)*

Timoney Holdings Limited (25%)

Silvatech Global Systems Limited(50% + 1 Share)

Silvatech Systems Corporation Pte Ltd(50% + 1 Share)

JuzclickCar.com Pte Ltd(90%)

Silvatech Systems Marketing Inc.(100%)

Int. Silvatech Industries Inc.(100%)



Group Structure – Singapore Technologies Marine LtdSubsidiaries and Associated Companies (As at 16 January 2005)

* In Compulsory Winding Up by the CourtItalics Indicates Associated Companies. Others are Subsidiaries (both directly and indirectly held)

STSE Engineering Services Pte Ltd(100%)

PT SSE-Van der Horst Indonesia(37%)

Joint Shipyard Management Services Pte Ltd(30%)

AquaGen International Pte Ltd*(25%)

Anchorville Pte Ltd*(25%)


BOARD OF DIRECTORSMr Peter SEAH Lim Huat (Chairman)Mr TAN Pheng Hock (President and CEO)Mr KOH Beng Seng (Director)Lieutenant-General NG Yat Chung (Director)Dr TAN Kim Siew (Director)Professor LUI Pao Chuen (Director)Mr Winston TAN Tien Hin (Director)Mr Lucien WONG Yuen Kuai (Director)Dr Philip Nalliah PILLAI (Director)Mr QUEK Poh Huat (Director)Mr Venkatachalam KRISHNAKUMAR (Director)Brigadier-General Bernard TAN Kok Kiang (Alternate Director to Lieutenant-General NG Yat Chung)

COMPANY SECRETARYMrs CHUA Su Li

REGISTERED OFFICE51 Cuppage Road #09-08StarHub CentreSingapore 229469Tel: (65) 6722 1818Fax: (65) 6720 2293http://www.stengg.com

SHARE REGISTRARM & C Services Private Limited138 Robinson Road #17-00The Corporate Offi ceSingapore 068906

AUDITORSErnst & Young 10 Collyer Quay #21-01Ocean BuildingSingapore 049315Mr NG Tiak Soon (Partner-in-charge)

PRINCIPAL BANKERSCalyon168 Robinson Road#22-01 Capital TowerSingapore 068912

Citibank N.A.3 Temasek Avenue #17-00Centennial TowerSingapore 039190

The Development Bank Of Singapore Ltd6 Shenton WayDBS Building Tower OneSingapore 068809

Oversea-Chinese Banking Corporation Limited65 Chulia Street#10-00 OCBC CentreSingapore 049513

217

Corporate Information



Directory of Subsidiaries, Associated and Investment Companies

CORPORATESINGAPORE TECHNOLOGIESENGINEERING LTD (ST ENGINEERING)51 Cuppage Road#09-08 StarHub CentreSingapore 229469Tel : (65) 6722 1818Fax : (65) 6720 2293Website : www.stengg.comContact : TAN Pheng Hock, President and CEOEmail : [email protected] : LIM Beng See, Vice President/Head, Corporate CommunicationsEmail : [email protected]

Defence BusinessTel : (65) 6722 1878Fax : (65) 6720 2293Contact : WEE Siew Kim, President, Defence BusinessEmail : [email protected]

International MarketingTel : (65) 6660 7631Fax : (65) 6265 8862Contact : Patrick CHOY, Executive Vice President, International MarketingEmail : [email protected]

ASIAN AEROSPACE 2006 PTE. LTD.The Signature, #07-0151 Changi Business Park Central 2Singapore 486066Tel : (65) 6780 4633Fax : (65) 6588 3341Contact : Ed NG Ee Peng, PresidentEmail : [email protected]

FUSIONTECH PTE. LTD.249 Jalan Boon LaySingapore 619523Tel : (65) 6660 7028Fax : (65) 6261 6566Contact : FONG Saik Hay, DirectorEmail : [email protected]

SINGAPORE TECHNOLOGIESDYNAMICS PTE LTD249 Jalan Boon LaySingapore 619523Tel : (65) 6660 7028Fax : (65) 6261 6566Contact : FONG Saik Hay, PresidentEmail : [email protected]

ST SYNTHESIS PTE LTD249 Jalan Boon LaySingapore 619523Tel : (65) 6660 7530Fax : (65) 6262 2707Contact : LIM Soon Heng, Vice President/General ManagerEmail : [email protected]

ASIASINGAPORE TECHNOLOGIESENGINEERING LTDRepresentative Offi ceB-21, 1st Floor, Friends Colony (West)Mathura Road, New Delhi 110065, IndiaTel : (91) 11 5104 8411Fax : (91) 11 5104 8410Contact : Lt Col (Ret) SINGH Harpal, Director, Marketing (South Asia)Email : [email protected]

CENTRAL ASIAKAZ-ST ENGINEERING BASTAU LIMITED LIABILITY PARTNERSHIP12, Samal Microdistrict12th Floor, Astana Tower473000, AstanaRepublic of KazakhstanTel : (65) 6722 1856Fax : (65) 6720 2293Contact : SHAE Toh Hock, General DirectorEmail : [email protected]

SINGAPORE TECHNOLOGIESENGINEERING LTDRepresentative Offi ce12, Samal Microdistrict12th Floor, Astana Tower473000, AstanaRepublic of KazakhstanTel : (7) 3172 580 310Fax : (7) 3712 580 409Contact : MAILYBAYEVA Aisulu, Administrative ManagerEmail : [email protected]

EUROPESINGAPORE TECHNOLOGIESENGINEERING (EUROPE) LTDMarquis House68 Jermyn StreetLondon SW1Y 6NYUnited KingdomTel : (44) 20 7930 8989Fax : (44) 20 7930 7828Contact : OOI Ling Heong, Executive Vice PresidentEmail : [email protected]

MIDDLE EASTSINGAPORE TECHNOLOGIESENGINEERING LTD.Representative Offi cePO Box 60333DubaiUnited Arab EmiratesTel : (971) 4 321 1624Fax : (971) 4 321 1625Contact : LIM Chong How, Regional DirectorEmail : [email protected]


USAVISION TECHNOLOGIES SYSTEMS, INC.99 Canal Center Plaza Suite 210Alexandria, Virginia 22314United States of AmericaTel : (1) 703 739 2610Fax : (1) 703 739 2611Contact : John G. COBURN, Chairman and CEOEmail : [email protected] : Martin RIED, Vice President, Corporate Administration and CommunicationsEmail : [email protected]

MILTOPE CORPORATION (VT MILTOPE)3800 Richardson AveHope Hull, Alabama 36043United States of AmericaTel : (1) 334 284 8665Fax : (1) 334 613 6591Contact : Thomas R. DICKINSON, President and CEOEmail : [email protected]

VISION TECHNOLOGIES AEROSPACEINCORPORATED99 Canal Center Plaza Suite 210Alexandria, Virginia 22314United States of AmericaTel : (1) 210 293 3001Fax : (1) 210 293 2642Contact : ANG Chye Kiat, PresidentEmail : [email protected]

VISION TECHNOLOGIES KINETICS, INC.3800 Richardson AveHope Hull, Alabama 36043United States of AmericaTel : (1) 334 284 8665Fax : (1) 334 613 6591Contact : Thomas R. DICKINSON, President and CEOEmail : [email protected]

VISION TECHNOLOGIESLAND SYSTEMS, INC.99 Canal Center Plaza Suite 210Alexandria, Virginia 22314United States of AmericaTel : (65) 6660 7631Fax : (65) 6256 8862Contact : Patrick CHOY, PresidentEmail : [email protected]

VISION TECHNOLOGIES MARINE, INC.99 Canal Center Plaza Suite 210Alexandria, Virginia 22314United States of AmericaTel : (1) 703 739 2610Fax : (1) 703 739 2611Contact : Martin RIED, Company SecretaryEmail : [email protected]

VT DIMENSIONS, INC.3800 Richardson AveHope Hull, Alabama 36043United States of AmericaTel : (1) 334 284 8665Fax : (1) 334 613 6591Contact : Thomas R. DICKINSON, President and CEOEmail : [email protected]

AEROSPACE SECTORSINGAPORE TECHNOLOGIESAEROSPACE LTD (ST AEROSPACE)540 Airport RoadPaya Lebar - HQSingapore 539938Tel : (65) 6287 1111Fax : (65) 6280 9713 / 8213Website : www.staero.aeroContact : TAY Kok Khiang, PresidentEmail : [email protected] : Audrey TAN, Head, Corporate CommunicationsEmail : [email protected]

Defence BusinessTel : (65) 6287 1111Fax : (65) 6280 9713Contact : HO Yuen Sang, Deputy President and Chief Operating Offi cerEmail : [email protected]

MarketingTel : (65) 6380 6183Fax : (65) 6280 8213Contact : CHIANG Woon Seng, Vice President, MarketingEmail : [email protected]

Aircraft Maintenance & Modifi cation (AMM)Tel : (65) 6380 6901Fax : (65) 6280 9713Contact : CHONG Kok Pan, Senior Vice President, AMMEmail : [email protected]




Component/Engine Repair & Overhaul (CERO)Tel : (65) 6380 6181Fax : (65) 6280 9713Contact : TAN Seow Juay, Senior Vice President, CEROEmail : [email protected]

Engineering & Materials Services (EMS)Tel : (65) 6380 6287Fax : (65) 6280 9713Contact : LIM Serh Ghee, Senior Vice President, EMSEmail : [email protected]

Engineering & Development Centre (EDC)Tel : (65) 6380 6294Fax : (65) 6280 7141Contact : LIM Tau Fuie, Senior Vice President, EDCEmail : [email protected]

Marketing Offi ce

ASIA PACIFICJAPANSINGAPORE AEROSPACEKABUSHIKI KAISHA1-19-3 Wakabacho, TachikawaTokyo 190-0001, JapanTel : (81) 42 537 6005Fax : (81) 42 537 6882Contact : Taijo SATO, Representative DirectorEmail : [email protected]

SUBSIDIARIESSINGAPOREPACIFIC FLIGHT SERVICES PTE LTD (PFS)ST Aerospace Engineering BuildingSeletar West CampSeletar AirportSingapore 797796Tel : (65) 6481 3756Fax : (65) 6482 1727Contact : Capt. Terry Kenneth ABBOTT, Chief PilotEmail : charter_fl ight@pacifi c.net.sgContact : Katharine YEO, Asst. Marketing ManagerEmail : charter_fl ight@pacifi c.net.sg

SINGAPORE BRITISH ENGINEERINGPTE LTD (SBE)20 Jalan Afi fi , #03-02ACISCO Centre IISingapore 409179Tel : (65) 6741 3067Fax : (65) 6741 3160Contact : TAN Shih Shiuan, General ManagerEmail : [email protected]

ST AEROSPACE ENGINEERING PTE LTD(STA Engineering)540 Airport Road, Paya LebarSingapore 539938Tel : (65) 6287 1111Fax : (65) 6284 8575Contact : WONG Kong Lin, Vice President/General ManagerEmail : [email protected]

ST AEROSPACE ENGINES PTE LTD(STA Engines)501 Airport Road, Paya LebarSingapore 539931Tel : (65) 6285 1111Fax : (65) 6282 3010Contact : CHOO Han Khoon, Vice President/General ManagerEmail : [email protected]

ST AEROSPACE INTERNATIONAL STRUCTURESPTE LTD (STAIS)540 Airport Road, Paya LebarSingapore 539938Tel : (65) 6380 6815Fax : (65) 6380 6292Contact : CHAI Kean Keat, General ManagerEmail : [email protected]

ST AEROSPACE SUPPLIES PTE LTD(STA Supplies)540 Airport Road, Paya LebarSingapore 539938Tel : (65) 6287 1111Fax : (65) 6383 4757 / 6284 3637Contact : William AMBROSE, Vice President/General ManagerEmail : [email protected]

ST AEROSPACE SYSTEMS PTE LTD(STA Systems)505A Airport Road, Paya LebarSingapore 539934Tel : (65) 6287 2222Fax : (65) 6284 0236Contact : GOH Poh Loh, Vice President/General ManagerEmail : [email protected]

ST AVIATION SERVICES CO PTE LTD (SASCO)8 Changi North WaySingapore 499611Tel : (65) 6545 0988Fax : (65) 6545 6757Contact : Stephen LOW, Vice President/General ManagerEmail : [email protected]

VISIONTECH ENGINEERING PTE LTD (VTE)540 Airport Road, Paya LebarSingapore 539938Tel : (65) 6380 6819Fax : (65) 6287 6164Contact : R Balakrishnan, General ManagerEmail : [email protected]



EUROPEAIRLINE ROTABLES LIMITED (ARL)Building 6002, Taylors EndStansted Airport, StanstedEssex CM24 1RL,United KingdomTel : (44) 1279 681 770Fax : (44) 1279 681 402Contact : Bernard CHEONG, Vice President/General ManagerEmail : [email protected]

BOURNEMOUTH AVIATION SERVICES COMPANYLIMITED (BASCO)Hangar 12, Eastern Business ParkBournemouth International AirportChristchurch, Dorset BH23 6NE,United KingdomTel : (44) 1202 409 168Fax : (44) 1202 578 668Contact : Joseph NG, Managing DirectorEmail : [email protected]

NORTH AMERICAST MOBILE AEROSPACE ENGINEERING,INC. (MAE)2100 9th Street, Brookley ComplexMobile, Alabama 36615,United States of AmericaTel : (1) 251 438 8888Fax : (1) 251 438 8892Contact : Ronnie KOH, PresidentEmail : [email protected]

SAN ANTONIO AEROSPACE LP (SAA)9800 John Saunders Road,San Antonio, Texas 78216,United States of AmericaTel : (1) 210 293 3200Fax : (1) 210 293 2642Contact : LOH Moh Loong, PresidentEmail : [email protected]

ASSOCIATED AND INVESTMENT COMPANIESASIA PACIFICAUSTRALIAAEROSPACE ENGINEERING SERVICESPTY LTD (AES)PO Box 213, BullsbrookWestern Australia 6084AustraliaTel : (61) 8 9571 6170Fax : (61) 8 9571 6191Contact : Albert CHAN, Director (Operations)Email : [email protected]

CHINASHANGHAI TECHNOLOGIES AEROSPACE COMPANY LIMITED (STARCO)Hongqiao International Airport(Hongqiao Road 2550)Airport Road 3Shanghai 200335, ChinaTel : (86) 21 5118 8293Fax : (86) 21 5118 8266Contact : CHEW Sin Chor, Vice President/General ManagerEmail : [email protected]

SINGAPORECOMPOSITE TECHNOLOGYINTERNATIONAL PTE LTD (CTI)39 Loyang WaySingapore 508735Tel : (65) 6542 1121Fax : (65) 6542 5383Contact : PHUA Poey Chor, General ManagerEmail : [email protected]

EUROCOPTER SOUTH EAST ASIAPRIVATE LIMITED (ESEA)48 Loyang WaySingapore 508740Tel : (65) 6543 4101Fax : (65) 6542 8797Contact : Bruno BOULNOIS, PresidentEmail : [email protected]

SINGAPORE PRECISION REPAIR AND OVERHAULPTE LTD (S-PRO)51 Loyang DriveSingapore 508956Tel : (65) 6545 3088Fax : (65) 6545 0833Contact : HWANG Tseng Ho, General ManagerEmail : [email protected]

TURBINE COATING SERVICES PTE LTD (TCS)5 Tuas Drive IISingapore 638639Tel : (65) 6862 1001Fax : (65) 6862 1068Contact : Frank H. WALSCHOT, General ManagerEmail : [email protected]

TURBINE OVERHAUL SERVICESPTE LTD (TOS)5 Tuas Drive IISingapore 638639Tel : (65) 6862 1001Fax : (65) 6862 1068Contact : Frank H. WALSCHOT, General ManagerEmail : [email protected]




ELECTRONICS SECTORSINGAPORE TECHNOLOGIES ELECTRONICSLIMITED (ST ELECTRONICS)24 Ang Mo Kio Street 65Singapore 569061Tel : (65) 6481 8888Fax : (65) 6482 1079Website : www.stee.stengg.comContact : SEAH Moon Ming, PresidentEmail : [email protected] : Magdalen LOH, Asst. Vice President/Head, Corporate CommunicationsEmail : [email protected]

Defence BusinessTel : (65) 6413 1898Fax : (65) 6481 1073Contact : LEE Fook Sun, Deputy President (Operations) and President (Defence Business)Email : [email protected]

Asia-Pacifi c OperationsTel : (65) 6413 3192Fax : (65) 6484 4700Contact : TAY Hun Kiat, President, Asia Pacifi c OperationsEmail : [email protected]

Corporate Services & MarketingTel : (65) 6413 1989Fax : (65) 6481 1073Contact : NG Chong Khim, Deputy President, Corp Services & Marketing and President, Communication & Sensor Systems GroupEmail : [email protected]

Large-Scale Systems GroupTel : (65) 6481 8888Fax : (65) 6483 2454Contact : YONG Thiam Chong, PresidentEmail : [email protected]

Marketing Offi ces

BOTSWANAST ELECTRONICS (BOTSWANA)Postnet Kgale View Private Bag 351#307 Gaborone, BotswanaTel : (267) 391 2945Mobile : (267) 726 2726/(65) 9681 2719Fax : (267) 391 0924Contact : TAN Wee Hoe, General ManagerEmail : [email protected]

ASIA PACIFICHONG KONGSINGAPORE TECHNOLOGIESELECTRONICS LIMITEDHong Kong Branch40th Floor, AIA Tower183 Electric Road, North PointHong Kong, S.A.R.Tel : (852) 3185 1380Fax : (852) 3185 1320Contact : Patrick LIM, General ManagerEmail : [email protected]

THAILANDST ELECTRONICS LTD (BRANCH OFFICE)21/160 Thai Wah Tower II, 30th FloorSouth Sathorn RoadSathorn, Bangkok 10120, ThailandTel : (66) 2679 1345Fax : (66) 2679 1349Contact : Andrew CHUA, General ManagerEmail : [email protected]

SUBSIDIARIESASIA PACIFICAUSTRALIARIPPLE SYSTEMS PTY LTDLevel 5, 85 The Esplanade, South PerthWestern Australia 6151Tel : (61) 8 9368 8600Fax : (61) 8 9368 8699Contact : Dr Paul NICHOLSON, CEOEmail : [email protected]

CHINAST ELECTRONICS (SHANGHAI) CO., LTD5th Floor, JinNiu Building77 E-Shan Road, Pudong New AreaShanghai 200127, ChinaTel : (86) 21 5873 8333Fax : (86) 21 5873 7564Contact : Mark CHAN Chee Meng, General ManagerEmail : [email protected] :NG Kai Kee, Assistant General ManagerEmail : [email protected]

Beijing Branch Offi ceSuite 701 Beijing Silver Tower,2 Dongsanhuanbei RdChaoyang District, Beijing 100027ChinaTel : (86) 10 6410 6190Fax : (86) 10 6410 6188Contact : NG Wee Tye, Vice PresidentEmail : [email protected]



ST ELECTRONICS (SICHUAN) CO., LTDSuite G, 15th Floor, Vancouver PlazaNo. 1 Qingjiangdong RoadChinaTel : (65) 6568 7410 / 7473Fax : (65) 6567 6370Contact : Nixon NG, Vice PresidentEmail : [email protected] : NG Wee Tye, Vice President (China)Asia Pacifi c Operations, ST ElectronicsEmail : [email protected]

XINKE INFORMATION SYSTEMS LTD3/F Shenzhen International Commerce BuildingFuhua 1 RoadFu Tian DistrictShenzhen, Guangdong Province, ChinaPostal Code 518048Tel : (86) 755 8228 8468Fax : (86) 755 8228 8428Contact : Mackay GOH, Assistant General ManagerEmail : [email protected]

HONG KONGINFA SYSTEMS LIMITEDUnit 3104-3105, Universal Trade Centre,3 Arbuthnot Road, Central,Hong Kong, S.A.R.Tel : (852) 2231 0808Fax : (852) 2806 1829Contact : Jacky LOUIE, CEOEmail : [email protected]

MALAYSIASEEL ELECTRONIC & ENGINEERINGSDN BHD15B & 17B Jln Petaling Utama 11(Off Jln Kelang Lama)46000 Petaling JayaSelangor, MalaysiaTel : (60) 3 7781 1573Fax : (60) 3 7783 2308Contact : PRASAD s/o Gobinathan, Acting General ManagerEmail : [email protected]

SINGAPOREAGILIS COMMUNICATION TECHNOLOGIES PTE LTD(AGILIS)100 Jurong East Street 21, Level 4ST Electronics Jurong East BuildingSingapore 609602Tel : (65) 6567 6791Fax : (65) 6567 6370Contact : TANG Kum Chuen, Senior Vice President/General ManagerEmail : [email protected]

CET TECHNOLOGIES PTE LTD (CET)100 Jurong East Street 21ST Electronics Jurong East BuildingSingapore 609602Tel : (65) 6567 6769Fax : (65) 6567 6300Contact : LAU Thiam Beng, PresidentEmail : [email protected]

DATAMARK TECHNOLOGIES PTE LTD100 Jurong East Street 21ST Electronics Jurong East BuildingSingapore 609602Tel : (65) 6568 7118Fax : (65) 6568 7226Contact : Andrew CHOW, General ManagerEmail : [email protected]

DIGISAFE PTE LTD (DIGISAFE)100 Jurong East Street 21ST Electronics Jurong East BuildingSingapore 609602Tel : (65) 6568 7118Fax : (65) 6568 7226Contact : Andrew CHOW, General ManagerEmail : [email protected]

SES SYSTEMS PTE LTD (SES)24 Ang Mo Kio Street 655th Floor, Block DSingapore 569061Tel : (65) 6481 8888Fax : (65) 6481 0693Contact : CHANG Yew Kong, PresidentEmail : [email protected]

ST EDUCATION & TRAINING PRIVATE LIMITED(STET)No 1 Maritime SquareHarbour Front Centre, #11-19Singapore 099253Tel : (65) 6477 6688Fax : (65) 6477 6693Contact : Mike CHEN Meng Koo, CEOEmail : [email protected]

ST TRAINING & SIMULATION PTE LTD (STTS)24 Ang Mo Kio Street 654th Floor, Block DSingapore 569061Tel : (65) 6413 1307Fax : (65) 6482 6162Contact : Eric CHAN Meng Koo, General ManagerEmail : [email protected]




INTERACTIVE VISUAL LABORATORYPTE LTD (iV Lab)24 Ang Mo Kio Street 654th Floor, Block DSingapore 569061Tel : (65) 6413 1706Fax : (65) 6484 4207Contact : TAN Wee Shen, ManagerEmail : [email protected]

PRESCIENT SYSTEMS & TECHNOLOGIES PTE. LTD.24 Ang Mo Kio Street 543rd Floor, Block DSingapore 569061Tel : (65) 6413 1370Fax : (65) 6482 1181Contact : Jonathan RATNAM, General Manager Email : [email protected]

TAIWANST ELECTRONICS (TAIWAN) LIMITED6th Floor, No 9, Lane 3Ming Sheng West Road, Taipei 104Taiwan, R.O.C.Tel : (886) 2 2521 6388Fax : (886) 2 2521 4880Contact : KOH Chan Tia, General ManagerEmail : [email protected]

USAINTELECT TECHNOLOGIES, INCORPORATED1225 Commerce StreetRichardson, Texas 75081United States of AmericaTel : (1) 972 367 2100Fax : (1) 972 367 2200Contact : NG Kim Hock, CEOEmail : [email protected]

ASSOCIATED AND INVESTMENT COMPANIESASIA PACIFICCHINACHINA DISTANCE EDUCATION LIMITEDRm. 106, A/F Kemao BuildingChina Agriculture University Xueqing Road, Beijing 100083, ChinaTel : (8610) 6239 8340Fax : (8610) 6239 6392Contact : ZHU Zheng Dong, CEOEmail : [email protected]

SINOSTRIDE TECHNOLOGY CO LTDBldg G, Zhejiang University Science Park525, Xixi Road,Hangzhou, ChinaTel : (86) 571 8821 9519Fax : (86) 571 8821 0596Contact : CHAU Chit, ChairmanEmail : [email protected]

ST ELECTRONICS-PCI CO. LTD.PCI Building, No. 50 Jianzhong RoadTianhe Software ParkGuangzhou 510665, ChinaTel : (86) 20 8552 9888Fax : (86) 20 8552 9216Contact : CHONG Ming Da, CEOEmail : [email protected]

KOREARF KOREA INC.4F, 1451 Gwanyang 1-dong Dongan-gu Anyang-si Gyeonggi-do431-060, KoreaTel : (82) 31 421 3350 (202)Fax : (82) 31 421 3255Contact : KIM Won Chul, Overseas Marketing ManagerEmail : [email protected]

NEW ZEALANDCADMUS TECHNOLOGY LIMITED66 Hillside RoadGlenfi eld, P.O. Box 100490, NSMC,Auckland, New ZealandTel : (64) 9442 2700Fax : (64) 9442 2722Contact : Ian BAILEY, Managing DirectorEmail : [email protected]

SINGAPOREECS HOLDINGS LIMITEDBlock 19, Kallang Avenue #06-151Singapore 339410Tel : (65) 6299 9433Fax : (65) 6298 3629Contact : TAY Eng Hoe, Group CEOEmail : [email protected]

GREEN DOT INTERNET SERVICES PTE LTD7 Bedok South RoadSingapore 469272Tel : (65) 6233 6666Fax : (65) 6233 6664Contact : Dr Francis YEOH, CEOEmail : [email protected]

INFOWAVE PTE LTD2 Ang Mo Kio Street 64#04-00 Econ BuildingSingapore 569084Tel : (65) 6483 0228Fax : (65) 6483 0388Contact : CHAY Yee Meng, CEOEmail : [email protected]



iWOW TECHNOLOGY PTE LTD13 Serangoon North Avenue 5 #03-00Singapore 554787Tel : (65) 6748 8123Fax : (65) 6748 2668Contact : Raymond BO, DirectorEmail : [email protected]

MOBILE SOLUTIONS AND PAYMENTSERVICES PTE LTD8 Shenton Way#09-03 Temasek TowerSingapore 068811Tel : (65) 6824 6940Fax : (65) 6391 7998Contact : YOW Tau Keon, CEOEmail : [email protected]

mPAYMENT PTE LTDBlk 750A, Chai Chee Road,#07-02(Suite 6 & 7)Technopark@Chai CheeSingapore 469001Tel : (65) 6446 7288Fax : (65) 6245 0623Contact : Andy QUAK, Executive DirectorEmail : [email protected]

SANDZ SOLUTIONS (SINGAPORE) PTE LTD261 Kaki Bukit Avenue 1Shun Li Industrial ParkSingapore 416065Tel : (65) 6741 1535Fax : (65) 6741 1444Contact : Lawrence LIAW, Managing Director Email : [email protected]

SENTRY TECHNOLOGIES PTE LTD100 Jurong East Street 21ST Electronics Jurong East BuildingSingapore 609602Tel : (65) 6779 0925Fax : (65) 6779 1715Contact : CHAN Nai Tiong, CEOEmail : [email protected]

ST LOGITRACK PTE LTDBlock 1003, Bukit Merah Central#03-10, Redhill Industrial EstateSingapore 159836Tel : (65) 6277 2882 / 3Fax : (65) 6277 2886Contact : TANG Kwai Leng, General ManagerEmail : [email protected]

THISS TECHNOLOGIES PTE LTD1092 Lower Delta Road #03-01 Tiong Bahru Industrial EstateSingapore 169203Tel : (65) 6272 2709 Fax : (65) 6278 7572 Contact : Nicholas HART, Managing DirectorEmail : [email protected]

TRANSYS PTE LTD2 Ang Mo Kio Street 64 #04-00Singapore 569084Tel : (65) 6481 0002Fax : (65) 6484 4728Contact : Kuber Tammanna TUKOL, General ManagerEmail : [email protected]

TRUSTED HUB LTD7 Bedok South RoadSingapore 469272Tel : (65) 6827 3268Fax : (65) 6827 3173Contact : Bryan WONG, PresidentEmail : [email protected]

TUNITY TECHNOLOGIES PTE LTDTechnopreneur Centre20, Ayer Rajah Crescent #07-29 Singapore 139964Tel : (65) 6872 1936Fax : (65) 6873 1656Contact : LIM Peck Hui, Managing DirectorEmail : [email protected]

WIZVISION PTE LTD73 Bukit Timah Road#04-01 Rex HouseSingapore 229832Tel : (65) 6392 0542Fax : (65) 6392 0790Contact : LIM Kah Chuan, CEOEmail : [email protected]

CANADAPOLARSAT INC.18, 105 Trans Canada HighwayKirkland, QuebecH9J 3Z4, CanadaTel : (514) 694 2244Fax : (514) 694 5288Contact : Cosimo MODAFFERI, President and CEOEmail : [email protected]




MEXICOGFM ELECTRONICS S.A. DE C.V.Av Pedro Ramirez Vazquez 200-10Colonia Valle Oriente, Garza Garcia, N.L.C.P. 66269, MexicoTel : (52) 8152 1532 / 8152 1562Fax : (52) 8152 1583Contact : Roberto Rivero LARREA, DirectorEmail : [email protected]

LAND SYSTEMS SECTORSINGAPORE TECHNOLOGIES KINETICS LTD(ST KINETICS)5 Portsdown RoadSingapore 139296Tel : (65) 6473 6311Fax : (65) 6471 0662Website : www.stengg.comContact : WU Tzu Chien, PresidentEmail : [email protected] : Natalie MAH, Asst. Vice President/Head, Corporate CommunicationsEmail : [email protected]

Defence BusinessTel : (65) 6660 7600Fax : (65) 6265 8862Contact : SEW Chee Jhuen, Deputy President (Operations) and President (Defence Business)Email : [email protected]

Commercial BusinessTel : (65) 6660 7001Fax : (65) 6262 3135Contact : TEO Boon Swee, Executive Vice President, Commercial BusinessEmail : [email protected]

International MarketingTel : (65) 6660 7631Fax : (65) 6265 8862Contact : Patrick CHOY, Executive Vice President, International MarketingEmail : [email protected]

STAR AUTOMOTIVE CENTREPortsdown Centre (HQ)5 Portsdown RoadSingapore 139296Tel : (65) 6562 0000 (mainline)(65) 9718 9999 (24 hour helpline)Fax : (65) 6475 1991Contact : Anthony TEO, ManagerEmail : [email protected]

Bedok Centre1301 Bedok North Ave 4Singapore 489945Tel : (65) 6243 7788Fax : (65) 6241 8785Contact : Anthony TEO, ManagerEmail : [email protected]

INDEPENDENT DAMAGE ASSESSMENTCENTRE (IDAC)Bedok Centre1301 Bedok North Ave 4Singapore 489945Tel : (65) 6555 6333Fax : (65) 6243 5019Contact : TEO Tse Keng, ManagerEmail : [email protected]

Pandan Centre4 Pandan AvenueSingapore 609383Tel : (65) 6265 3100Fax : (65) 6264 3414Contact : TEO Tse Keng, ManagerEmail : [email protected]

Portsdown Centre5 Portsdown RoadSingapore 139296Tel : (65) 6555 6111Fax : (65) 6476 0057Contact : TEO Tse Keng, ManagerEmail : [email protected]

Sin Ming Centre302 Sin Ming RoadSingapore 575627Tel : (65) 6555 6888Fax : (65) 6454 3279Contact : TEO Tse Keng, ManagerEmail : [email protected]

Ubi Centre5 Ubi CloseSingapore 408605Tel : (65) 6555 6777Fax : (65) 6742 9846Contact : TEO Tse Keng, ManagerEmail : [email protected]

Representative Offi ce

VIETNAMSINGAPORE TECHNOLOGIES KINETICS LTDTecasin Business Centre243-243B Hoang Van Thu StTan Binh District, Ho Chi Minh CityVietnamTel : (84) 8844 3441 / (84) 9 0380 7686Fax : (84) 8844 3442Contact : WONG Chow Ming, Chief RepresentativeEmail : [email protected]



SUBSIDIARIESASIA PACIFICCHINAKINETICS SYSTEMS (SHANGHAI)CO. LTD. (KSS)555 Kang Hua RoadKang Qiao, Industrial ZonePudong, Shanghai ZIP 201315ChinaTel : (86) 21 6819 2668Fax : (86) 21 6819 2669Mobile: (86) 1350 1291 820Contact : TEE Song Huat, Vice President, Alternate Energy BusinessEmail : [email protected]

SHANGHAI ELITE ELECTRIC VEHICLESCO., LTD (SEEV)555 Kang Hua RoadKang Qiao, Industrial ZonePudong, Shanghai ZIP 201315ChinaTel : (86) 21 6819 2668Fax : (86) 21 6819 2669Mobile: (86) 1350 1291 820Contact : TEE Song Huat, Vice President, Alternate Energy BusinessEmail : [email protected]

MALAYSIADETROIT DIESEL - ALLISON (MALAYSIA)SDN BHD (DDA)Lot No. 7, Jalan Saham 23/3Fasa 8, Seksyen 23, 40300 Shah AlamSelangor Darul Ehsan, MalaysiaTel : (03) 5542 3973Fax : (03) 5542 3977Contact : CHIN Yang Pin, General ManagerEmail : [email protected]

SINGAPOREALLIED ORDNANCE OF SINGAPORE(PTE) LIMITED (AOS)2D Ayer Rajah Crescent#08-01, AOS BuildingSingapore 139938Tel : (65) 6779 7955Fax : (65) 6779 0284Contact : Alex TEO, Vice President/General ManagerEmail : [email protected]

CHARTERED AMMUNITION INDUSTRIESPTE LTD (CAI)249 Jalan Boon LaySingapore 619523Tel : (65) 6660 7231Fax : (65) 6268 7579Contact : JWAY Ching Hua, Senior Vice President/General ManagerEmail : [email protected]

CHARTERED PYROTECHNIC INDUSTRIESPRIVATE LIMITED (CPI)249 Jalan Boon LaySingapore 619523Tel : (65) 6468 3211Fax : (65) 6467 2989Contact : Francis CHONG, General ManagerEmail : [email protected]

MOBILITY SYSTEMS PTE LTD5 Portsdown RoadSingapore 139296Tel : (65) 6660 7001Fax : (65) 6262 3135Contact : TEO Boon Swee, DirectorEmail : [email protected]

ORDNANCE DEVELOPMENT AND ENGINEERINGCOMPANY OF SINGAPORE (1996) PRIVATELIMITED (ODE 96)15 Chin Bee DriveSingapore 619863Tel : (65) 6265 5322Fax : (65) 6265 2285Contact : TOH Beng Khoon, Vice President/General ManagerEmail : [email protected]

SILVATECH GLOBAL SYSTEMS LIMITED1 Coleman Street#07-10 The AdelphiSingapore 179803Tel : (65) 6660 7001Fax : (65) 6262 3135Contact : TEO Boon Swee, DirectorEmail : [email protected]

SILVATECH SYSTEMS CORPORATIONPTE LTD (SILVATECH)1 Coleman Street#07-10 The AdelphiSingapore 179803Tel : (65) 6660 7001Fax : (65) 6262 3135Contact : TEO Boon Swee, DirectorEmail : [email protected]

SINGAPORE ORDNANCE ENGINEERINGPTE. LTD. (SOE)5 Portsdown RoadSingapore 139296Tel : (65) 6481 8463Fax : (65) 6481 9159Contact : GOH Bak Nguan, Vice President/General ManagerEmail : [email protected]




SINGAPORE TEST SERVICES PRIVATELIMITED (STS)249 Jalan Boon LaySingapore 619523Tel : (65) 6660 7316Fax : (65) 6261 2617Contact : Sudheer PRABHAKARAN, General ManagerEmail : [email protected]

STA DETROIT DIESEL-ALLISON (SINGAPORE)PTE LTD (SDDA)16 Benoi CrescentSingapore 629979Tel : (65) 6265 5222Fax : (65) 6265 3669Contact : CHIN Yang Pin, Vice President/General ManagerEmail : [email protected]

STA INSPECTION PTE LTD (STA INSP)Sin Ming Centre (HQ)302 Sin Ming RoadSingapore 575627Tel : (65) 6210 4700Fax : (65) 6453 8244Contact : GOH Lik Kok, Vice President/General ManagerEmail : [email protected]

Ayer Rajah Centre2E Ayer Rajah CrescentSingapore 139958Tel : (65) 6476 0988Fax : (65) 6476 3034Contact : GOH Lik Kok, Vice President/General ManagerEmail : [email protected]

STA INVESTMENT PTE LTD (STAI)5 Portsdown RoadSingapore 139296Tel : (65) 6470 8705Fax : (65) 6472 3246Contact : TAN Ah Lee, Vice President/Financial ControllerEmail : [email protected]

UNICORN INTERNATIONAL PTE LIMITED (UI)249 Jalan Boon LaySingapore 619523Tel : (65) 6660 7601Fax : (65) 6266 6971Contact : John CHIEW, Vice President/General ManagerEmail : [email protected]

TAIWANAOS TAIPEI OFFICE7F-8, 11, Lane 300, Section 4Ren Ai Road, TaipeiTaiwan, R.O.C.Tel : (8862) 2707 1526Fax : (8862) 2707 1664Contact : WU Hsin Chieh, AOS RepresentativeEmail : [email protected]

CANADAINT. SILVATECH INDUSTRIES INC.27489-56th AvenueLangley, British Columbia, V4W 3X1CanadaTel : (1604) 607 8877Fax : (1604) 607 8825Contact : Martyn MORGAN, CEO and DirectorEmail : martynm@silvatechfl uidpower.com

ASSOCIATED AND INVESTMENT COMPANIESASIA PACIFICCHINABEIJING ZHONGHUAN KINETICS HEAVYVEHICLES CO. LTD. (BZK)Ciqu Industrial ParkTaihu TownTongzhou District, Beijing 101111ChinaTel : (86) 10 8150 3508Fax : (86) 10 8150 3525Mobile: (86) 1350 1291 820Contact : TEE Song Huat, Vice President, Alternate Energy BusinessEmail : [email protected]

KOREANESSCAP CO., LTD (NESSCAP)29-9 Wonchun-DongPaldal-Ku, SuwonKyonggi-Do, 442-380KoreaTel : (82) 31 219 0682Fax : (82) 31 216 6484Mobile: (86) 1350 1291 820Contact : TEE Song Huat, Vice President, Alternate Energy BusinessEmail : [email protected]

MALAYSIANUSANTARA TECHNOLOGIES SDN. BHD.(NUSATEK)No. 5 Jalan Anggerik Mokara 31/45Seksyen 31, Kota Kemuning40460 Shah AlamSelangor, Darul Ehsan, MalaysiaTel : (03) 5122 9766 / 9767Fax : (03) 5122 8766 / 8767Contact : Pamela CHAN, Finance & Admin ManagerEmail : [email protected]

SINGAPORECIS - OERLIKON PTE LTD (CIS-OC)249 Jalan Boon LaySingapore 619523Tel : (65) 6660 7601Fax : (65) 6266 6971Contact : John CHIEW, Vice President/General ManagerEmail : [email protected]



CITYCAB PTE LTD (CITYCAB)600 Sin Ming AvenueSingapore 575733Tel : (65) 6210 4900Fax : (65) 6453 5004Contact : YANG Ban Seng, CEOEmail : [email protected]

DEFENCE ELECTRONICS OF SINGAPOREPTE LTD (DES)2B/2C Ayer Rajah CrescentSingapore 139937Tel : (65) 6770 7846Fax : (65) 6779 0284Contact : KHAW Pe Soo, Industrial ManagerEmail : [email protected]

SMART SYSTEMS PTE LTD601 Rifl e Range RoadSingapore 588398Tel : (65) 6466 2345Fax : (65) 6466 3313Contact : TUNG Yui Kee, General ManagerEmail : [email protected]

TAKATA CPI SINGAPORE PTE LTD249 Jalan Boon LaySingapore 619523Tel : (65) 6466 5180Fax : (65) 6465 6616Contact : ANG Tiong Ing, General ManagerEmail : [email protected]

EUROPETIMONEY HOLDINGS LIMITEDGibbstown, NavanCo. Meath, IrelandTel : 353 46 905 5100Fax : 353 46 905 4424Contact : Shane O’NEILL, CEOEmail : [email protected]

USAAZURE DYNAMICS CORPORATION9 Forbes RoadWoburn, Massachusetts 01801United States of AmericaTel : (1) 78 1932 9009Fax : (1) 78 1932 9219Contact : MAH Chi Jui, Vice President, New BusinessEmail : [email protected]

STM POWER, INC275 Metty DriveAnn Arbor, Michigan 48103United States of AmericaTel : (1) 734 995 1755Fax : (1) 734 995 0610Mobile: (86) 1350 1291 820Contact : TEE Song Huat, Vice President, Alternate Energy BusinessEmail : [email protected]

MARINE SECTORSINGAPORE TECHNOLOGIES MARINE LTD(ST MARINE)7 Benoi RoadSingapore 629882Tel : (65) 6861 2244 (mainline)Fax : (65) 6861 3028Website : www.stengg.comContact : SEE Leong Teck, PresidentEmail : [email protected] : Laura CHUA, Asst. Vice President/Head, Corporate CommunicationsEmail : [email protected]

Defence BusinessTel : (65) 6860 9138Fax : (65) 6861 3028Contact : HAN Yew Kwang, Chief Operating Offi cer (Defence Business)Email : [email protected]

Main YardTel : (65) 6860 9237Fax : (65) 6861 3028Contact : TWOON Kok Yam, Vice President (Yard – Benoi)Email : [email protected]

Commercial MarketingTel : (65) 6860 9281Fax : (65) 6861 3028Contact : LIM Siew Koon, Senior Vice President, Commercial Marketing & Business DevelopmentEmail : [email protected]

Naval MarketingTel : (65) 6860 9283Fax : (65) 6861 3028Contact : Charles LOKE, Regional Director, Naval MarketingEmail : [email protected]

Tel : (65) 6860 9178Fax : (65) 6861 3028Contact : GOH Boon Leng, Regional Director, Naval MarketingEmail : [email protected]




Tuas Yard60 Tuas RoadSingapore 638501Tel : (65) 6862 2902/3Fax : (65) 6862 5382

Tel : (65) 6864 8608Fax : (65) 6862 5382Contact :TEH Yew Shyan, Senior Vice President (Yard – Tuas)Email : [email protected]

VT HALTER MARINE, INC.900 Bayou Casotte ParkwayPascagoula, Mississippi 39581United States of AmericaTel : (1) 228 696 6888Fax : (1) 228 696 6899Contact : Boyd E. KING, CEOEmail : [email protected]

SUBSIDIARIESSTSE ENGINEERING SERVICES PTE LTD7 Benoi RoadSingapore 629882Tel : (65) 6860 9261Fax : (65) 6861 3028Contact : Kenneth TAN, Business Development ManagerEmail : [email protected]

ASSOCIATED AND INVESTMENT COMPANIESASIA PACIFICINDONESIAPT SSE-VAN DER HORST INDONESIA(PT-SSE)Gedung Artha Graha, 25th FloorJl Jendral Sudirman Kav 52-53, JakartaIndonesia 12190Tel : (62) 21 515 4271Fax : (62) 21 515 4272Contact : WEE Boon Chye, DirectorEmail : [email protected]

SINGAPOREJOINT SHIPYARD MANAGEMENT SERVICES PTELTD (JSMS)29 Tanjong Kling RoadSingapore 628054Tel : (65) 6265 1766Fax : (65) 6261 0738Contact : POON Ter Ter, DirectorEmail : [email protected] : TWOON Kok Yam, DirectorEmail : [email protected]



SINGAPORE TECHNOLOGIES ENGINEERING LTD(Incorporated in the Republic of Singapore)(Regn. No.: 199706274H)

NOTICE OF EIGHTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Eighth Annual General Meeting of the Company will be held at Crystal Suite, Level 2, Holiday Inn Park View Singapore, 11 Cavenagh Road, Singapore 229616 on Thursday, 31 March 2005 at 2.30pm to transact the following business:-

As Ordinary Business

Resolution 1To receive and adopt the Directors’ Report and Audited Accounts for the year ended 31 December 2004 and the Auditors’ Report thereon.

Resolution 2To declare a fi rst and fi nal tax exempt (one-tier)dividend of 4.0 cents per share and a special tax exempt (one-tier) dividend of 8.39 cents per share for the year ended 31 December 2004.

Resolution 3To re-elect the following Directors, each of whom will retire by rotation pursuant to Article 98 of the Articles of Association of the Company and who, being eligible, will offer themselves for re-election.

(i) Mr Tan Pheng Hock(ii) Dr Philip Nalliah Pillai (independent member of the

Audit Committee)(iii) Mr Lucien Wong Yuen Kuai(iv) Mr Venkatachalam Krishnakumar (independent member of the

Audit Committee)

Resolution 4To approve the sum of $406,750 as Directors’ fees for the year ended 31 December 2004. (2003: $361,959)

Resolution 5To re-appoint Ernst & Young as Auditors of the Company and to authorise the Directors to fi x their remuneration.

As Special Business

To consider and, if thought fi t, to pass with or without modifi cations, the following resolutions which will be proposed as Ordinary Resolutions:-

Resolution 6That pursuant to Section 153(6) of the Companies Act, Chapter 50, Mr Lim Chin Beng be and is hereby appointed as a Director of the Company with effect from the date of this Annual General Meeting to hold such offi ce until the next Annual General Meeting of the Company.

Resolution 7That authority be and is hereby given to the Directors to:-

(a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) 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,

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 fi t; and

(b) (notwithstanding the authority 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 this Resolution was in force,

provided that:-

(1) 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) does not exceed 50 per cent. of the issued share capital of the Company (as calculated in accordance with sub-paragraph (2) 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) does not exceed 20 per cent. of the issued share capital of the Company (as calculated in accordance with sub-paragraph (2) below);

(2) (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 (1) above, the percentage of issued share capital shall be based on the issued share capital of the Company at the time this Resolution is passed, after adjusting for:-

(i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and

(ii) any subsequent consolidation or subdivision of shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and

(4) (unless revoked or varied by the Company in General Meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.



Resolution 8THAT approval be and is hereby given to the Directors to:-

(a) offer and grant options in accordance with the provisions of the Singapore Technologies Engineering Share Option Plan (“Share Option Plan”) and/or to grant awards in accordance with the provisions of the Singapore Technologies Engineering Performance Share Plan (“Performance Share Plan”) and/or the Singapore Technologies Engineering Restricted Stock Plan (“Restricted Stock Plan”) (the Share Option Plan, the Performance Share Plan and the Restricted Stock Plan, together the “Share Plans”); and

(b) allot and issue from time to time such number of ordinary shares of $0.10 each in the capital of the Company as may be required to be issued pursuant to the exercise of options under the Share Option Plan and/or such number of fully paid shares as may be required to be issued pursuant to the vesting of awards under the Performance Share Plan and/or the Restricted Stock Plan,

provided that the aggregate number of ordinary shares to be issued pursuant to the Share Plans shall not exceed fi fteen per cent. (15%) of the issued share capital of the Company from time to time.

Statement Pursuant to Article 60 of the Articles of Association of the Company

Resolution No. 6 is to appoint Mr Lim Chin Beng as a Director of the Company with effect from the date of the Eighth Annual General Meeting. Mr Lim is currently the Chairman of Singapore Press Holdings Ltd, The Ascott Group Limited and ValuAir Limited. He also sits on the Boards of CapitaLand Limited, StarHub Ltd, Press Foundation of Singapore Ltd and Pontiac Land Private Limited. He has had a distinguished career of more than 3 decades in the aviation industry. He retired as Deputy Chairman of Singapore Airlines in 1996. Mr Lim was also Singapore’s Ambassador to Japan from June 1991 to November 1997. He joined Singapore Technologies Aerospace Ltd (“ST Aerospace”) as Board Director on 15 February 1998 and was Chairman of ST Aerospace from 15 April 1998 to 15 July 2004. The Board of Directors of the Company is pleased to recommend the appointment of Mr Lim, who brings with him a wealth of experience both in the aviation industry and management. Mr Lim has expressed his willingness to act as a Director of the Company. As Mr Lim is over 70 years of age, his proposed appointment is subject to shareholders’ approval pursuant to Section 153(6) of the Companies Act, Chapter 50.

Resolution No. 7 is to empower the Directors to issue ordinary shares in the capital of the Company and to make or grant instruments (such as warrants or debentures) convertible into ordinary shares, and to issue ordinary shares in pursuance of such instruments, up to an amount not exceeding in total fi fty per cent. (50%) of the issued ordinary share capital of the Company, with a sub-limit of twenty per cent. (20%) for issues other than on a pro rata basis to shareholders. For the purpose of determining the aggregate number of ordinary shares that may be issued, the percentage of issued share capital shall be based on the issued share capital of the Company at the time that Resolution No. 7 is passed, after adjusting for (a) new shares arising from the conversion or exercise of any convertible

securities or share options or vesting of share awards which are outstanding or subsisting at the time that Resolution No. 7 is passed, and (b) any subsequent consolidation or subdivision of shares.

Resolution No. 8 is to empower the Directors to offer and grant options and/or grant awards and to issue ordinary shares in the capital of the Company pursuant to the Singapore Technologies Engineering Share Option Plan, Singapore Technologies Engineering Performance Share Plan and Singapore Technologies Engineering Restricted Stock Plan (collectively the “Share Plans”). Approval for the adoption of the Share Plans was given by shareholders at an Extraordinary General Meeting of the Company held on 23 November 2000. The grant of options and awards under the respective Share Plans will be made in accordance with their respective provisions. The aggregate number of ordinary shares which may be issued pursuant to the Share Plans is limited to fi fteen per cent. (15%) of the issued ordinary share capital of the Company over the 10-year duration of the Share Plans.

BY ORDER OF THE BOARD

CHUA SU LI (Mrs)Company Secretary

Singapore, 4 March 2005

NOTES:-

1. A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies to attend and vote in his stead. A proxy need not be a member of the Company.

2. The instrument appointing a proxy must be lodged at the registered offi ce of the Company at 51 Cuppage Road, #09-08, StarHub Centre, Singapore 229469 not less than 48 hours before the time appointed for the Annual General Meeting.

Books Closure and Dividend Payment Dates

Duly completed transfers in respect of ordinary shares in the capital of the Company together with all relevant documents of title received by the Company’s share registrar, M & C Services Private Limited, 138 Robinson Road, #17-00, The Corporate Offi ce, Singapore 068906 up to the close of business at 5.00 p.m. on 7 April 2005 (the “Books Closure Date”) will be registered to determine members’ entitlements to the proposed dividends, subject to approval of members to the proposed dividends at the Eighth Annual General Meeting to be convened on 31 March 2005. Subject as aforesaid, members whose securities accounts with The Central Depository (Pte) Limited are credited with ordinary shares in the capital of the Company as at 5.00 p.m. on the Books Closure Date will be entitled to the dividends. The Register of Members and Share Transfer Books will be closed on 8 April 2005 for the purpose of determining members’ entitlements to the proposed dividends. The proposed dividends, if so approved by members, will be paid on 25 April 2005.


NOTICE OF EIGHTH ANNUAL GENERAL MEETING

SINGAPORE TECHNOLOGIES ENGINEERING LTD(Incorporated in the Republic of Singapore)(Regn. No.: 199706274H)

PROXY FORM

IMPORTANT1. For investors who have used their CPF moneys to buy

ordinary shares in the capital of Singapore Technologies Engineering Ltd, the 2004 Annual Report is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

I I/We, _______________________________________________________NRIC/Passport Number_____________________________

of __________________________________________________________________________________________________________

being a member/members of the abovenamed Company, hereby appointII

(a)

(b)

Name Address NRIC/Passport Number Proportion of Shareholdings (%)

and/or (delete as appropriate)

as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Eighth Annual General Meeting of the Company to be held at Crystal Suite, Level 2, Holiday Inn Park View Singapore, 11 Cavenagh Road, Singapore 229616 on Thursday, 31 March 2005 at 2.30pm and at any adjournment thereof.

(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the Ordinary Resolutions as set out in the Notice of the Annual General Meeting. In the absence of specifi c directions, the proxy/proxies will vote or abstain as he/they may think fi t, as he/they will on any other matter arising at the Annual General Meeting.)

III No Ordinary Resolutions For Against

Ordinary Business

1 Adoption of Accounts and Reports

2 Declaration of First and Final Tax Exempt (one-tier) Dividend and Special Tax Exempt (one-tier) Dividend

3 Re-election of Directors retiring by rotation pursuant to Article 98 of the Articles of Association of the Company

(i) Mr Tan Pheng Hock

(ii) Dr Philip Nalliah Pillai

(iii) Mr Lucien Wong Yuen Kuai

(iv) Mr Venkatachalam Krishnakumar

4 Approval of Directors’ Fees

5 Re-appointment of Ernst & Young as Auditors

Special Business

6 Appointment of Mr Lim Chin Beng as Director pursuant to Section 153(6) of the Companies Act, Chapter 50

7 Authority for Directors to issue shares

8 Authority for Directors to offer and grant options and/or grant awards and allot shares, pursuant to the Singapore Technologies Engineering Share Option Plan, Singapore Technologies Engineering Performance Share Plan and Singapore Technologies Engineering Restricted Stock Plan

Dated this ________ day of __________________ 2005

Signature(s) of Member(s) or Common Seal

Total Number of Shares held

IMPORTANT: PLEASE READ NOTES OVERLEAF

Postage will be paid by

addressee. For posting in

Singapore only.

3rd fold here & fold fl ap

2nd fold here

1sd fold here

Notes:

1 Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as defi ned in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of shares. If you have shares registered in your name in the Register of Members, you should insert that number of shares. If you have shares entered against your name in the Depository Register and shares registered in your name in the Register of Members, you should insert the aggregate number of shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the shares held by you.

2 A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote instead of him. Such proxy need not be a member of the Company.

3 Where a member appoints two proxies, the appointments shall be invalid unless he specifi es the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each proxy.

4 The instrument appointing a proxy or proxies must be deposited at the registered offi ce of the Company at 51 Cuppage Road, #09-08, StarHub Centre, Singapore 229469, not less than 48 hours before the time appointed for the Eighth Annual General Meeting.

5 The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an offi cer or attorney duly authorised.

6 A corporation which is a member may authorise by a resolution of its directors or other governing body such person as it thinks fi t to act as its representative at the Eighth Annual General Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies 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 specifi ed in the instrument appointing a proxy or proxies. In addition, in the case of shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Eighth Annual General Meeting, as certifi ed by The Central Depository (Pte) Limited to the Company.

Singapore Technologies Engineering Ltd51 Cuppage Road

#09-08 StarHub CentreSingapore 229469

~SURVEY~

The Enterprise InstinctSingapore Technologies Engineering Annual Report 2004

Thank you for reading our annual report. We appreciate your feedback to help us improve this annual publication. Kindly complete this survey and return it via prepaid mail, fax [(65) 6720 2293] before 30 April 2005, or at our Annual General Meeting.

Francis HengChief Financial Offi cer, ST Engineering

Please tick “ ” accordinglyRatings: G = Good, A = Average, P = Poor, D = Did not read

1. Please help us assess each of the following sections in terms of helping you to understand the operations and strategic directions of the Group:

a. Page 10 ST Engineering at a Glance ...................................................... b. Page 24 Corporate Governance .............................................................. c. Page 44 Extending Our Horizon .............................................................. d. Page 62 Human Resource ......................................................................... e. Page 64 Corporate Social Responsibility .............................................. f. Page 66 Investor Relations ....................................................................... g. Page 74 Operating Financial Review ..................................................... 2. How would you rate the overall writing style of this report?

3. Which part of this report did you fi nd particularly good/weak and why? Good: Weak:

4. Do you have any suggestions or a “wish list” of what you hope to see in our report next year?

5. Please indicate your preference (please tick “ ”):

6. Are you a: Shareholder / Analyst / Journalist / Staff / Customer? (please circle)

Others (please specify): 7. Please leave your contact details if you wish to discuss this further.

Name: Tel:

G A P D

The onlineannual report

The printannual report

Both onlineand print versions

I have nopreference

Singapore Technologies Engineering Ltd51 Cuppage Road

#09-08 StarHub CentreSingapore 229469

Postage will be paid by

addressee. For posting in

Singapore only.

01 01 The Enterprise Instinct The Enterprise Instinct 0202 – Scaling New Heights 0404 – Anticipating Change 0606 – Driven by Innovation 0808 – Growing through Teamwork 10 10 ST Engineering at a Glance ST Engineering at a Glance 12 12 Letter to Shareholders Letter to Shareholders 18 18 Financial Highlights Financial Highlights 24 24 Corporate Governance Corporate Governance 32 32 Board of Directors Board of Directors 38 38 Senior ManagementSenior Management 42 42 Organisation Chart Organisation Chart 44 44 Extending Our Horizons Extending Our Horizons 4646 – Aerospace 5050 – Electronics 5454 – Land Systems 5858 – Marine 62 62 Human Resource Human Resource 64 64 Corporate Social Responsibility Corporate Social Responsibility 66 66 Investor RelationsInvestor Relations6767 � Dividend History6868 � Investor Relations Calendar 20046868 � Financial Calendar 20056969 � Share Price Performance70 70 Awards and Commendations Awards and Commendations 72 72 Asian Aerospace 2004Asian Aerospace 200474 74 Operating Financial ReviewOperating Financial Review7474 – Group’s Vision, Mission & Strategies 7575 – Sector Overview8080 – Operating Review Half Yearly Performance Full Year Performance Earnings Per Share (EPS) Economic Value Added (EVA) Capital Expenditure Total Assets Major Acquisitions Major Projects

86 – Dynamics and Risk Factors of the Business

Review of Business Environment Risk Management Sensitivity Analysis91 – Prospects for 20059292 – Shareholder Returns Return On Equity Dividend Per Share (DPS) and

Earnings Per Share (EPS) Share Purchase Mandate9292 – Financial Review Treasury Policy and Capital Structure Cash and Foreign Exchange Management Insurance Funding and Borrowings Cash Flows and Liquidity9494 – Accounting Policies95 95 Financial ReportFinancial Report9696 – Directors’ Report111111 – Statement by Directors112112 – Auditors’ Report113113 – Financial Statements Balance Sheets Statement of Profi t and Loss Statements of Changes in Equity Consolidated Statement

of Cash Flows Notes to the Financial Statements181877 – SGX Listing Manual Requirements190190 � Shareholding Statistics192192 – Sectoral Financial Review212212 – Group Structure217217 Corporate InformationCorporate Information218218 Corporate DirectoryCorporate Directory231231 Notice ofNotice of Annual General MeetingAnnual General Meeting Proxy FormProxy Form Annual Report Annual Report SurveySurvey

Contents

SuccessfulSuccessful organisations strive to keep alive the enterprise organisations strive to keep alive the enterprise spirit among its people – the one single force that propels an spirit among its people – the one single force that propels an organisation forward, keeps its innovative edge and inspires organisation forward, keeps its innovative edge and inspires work with passion.work with passion.

Singapore Technologies Engineering (ST Engineering) is one Singapore Technologies Engineering (ST Engineering) is one such organisation.such organisation.

An integrated engineering group providing solutions and An integrated engineering group providing solutions and services in the aerospace, electronics, land systems and marine services in the aerospace, electronics, land systems and marine sectors, it is spreading its wings to become a global entity. sectors, it is spreading its wings to become a global entity. Today, it has over 100 subsidiaries and associated companies Today, it has over 100 subsidiaries and associated companies in 15 countries and 22 cities, a global staff strength of some in 15 countries and 22 cities, a global staff strength of some 12,000, and 2004 revenues of nearly $3b. 12,000, and 2004 revenues of nearly $3b.

ST Engineering is also a company undergoing change. Since ST Engineering is also a company undergoing change. Since its inception, most of its revenues were from the defence sector. its inception, most of its revenues were from the defence sector. In 2004, for the fi rst time, this was surpassed by commercial In 2004, for the fi rst time, this was surpassed by commercial contributions. Other opportunities beckon. With solutions as contributions. Other opportunities beckon. With solutions as diverse as unmanned technologies and satellite communications, diverse as unmanned technologies and satellite communications, it now serves customers in over 60 countries worldwide.it now serves customers in over 60 countries worldwide.

This Annual Report chronicles ST Engineering’s continuing This Annual Report chronicles ST Engineering’s continuing journey to nurture the enterprise spirit.journey to nurture the enterprise spirit.


51 Cuppage Road #09-08, StarHub Centre, Singapore 229469 Tel: (65) 6722 1818 Fax: (65) 6720 2293

(Regn. No.: 199706274H)

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Singapore Technologies Engineering Ltd Annual Report 2004(Regn. No.: 199706274H)

Documents

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