kgt report to unitholders 2012

7/30/2019 KGT Report to Unitholders 2012

1/88

Report to Unitholders 2012

SHAPINGTHE FUTURE


2/88

K-Green Trust aims to create enduring

partnerships to invest in green

infrastructure assets globally to

generate long-term, predictable and

regular distributions for our Unitholders.

To be a premier partner thatinvests in environmental

solutions today for a

sustainable tomorrow.

OVERVIEW

1 Financial Highlights

2 Chairmans Statement

6 K-Green Trust at a Glance

7 Strategic Directions

8 Board of Directors

12 Key Executives of the Trustee-Manager

13 Operations & Maintenance Managers

OPERATIONS, SUSTAINABILITY& GOVERNANCE

20 Operations Review

24 Sustainability Report25 Sustaining Growth

26 Empowering Lives

27 Nurturing Communities

28 Unit Price Performance

29 Significant Events

30 Trust Structure

31 Corporate Governance

49 Risk Management

50 Statistics of Unitholdings

52 Corporate Information

FINANCIAL STATEMENTS

53 Report of the Trustee-Manager

& Financial Statements

54 Report of the Trustee-Manager

56 Statement by the Trustee-Manager57 Statement by the Chief Executive Officer

58 Independent Auditors Report

59 Statements of Financial Position

60 Consolidated Statement of

Comprehensive Income

61 Statements of Changes in

Unitholders Fund

62 Consolidated Statement of Cash Flows

63 Notes to Financial Statements

OTHER INFORMATION

82 Financial Calendar

83 Notice of Annual General Meeting

Proxy Form

CONTENTS

Keppel Seghers Tuas Waste-to-Energy Plant is the first in Singapore builtunder the National Environment Agencys Public Private Partnership initiative.


3/88

FINANCIAL HIGHLIGHTS

Financial Summary

for the financial year from 1 January 2012 to 31 December 2012

2012$000

2011$000

%Change

Cash generated from operations 53,322 50,881 4.8

Total distribution 49,249 49,249 -

Distribution per unit (cents)1 7.82 7.82 -

Distribution yield2 7.6% 8.6% -11.6

Balance Sheet

as at 31 December

2012$000

2011$000

%Change

Total assets 681,432 717,198 -5.0

Total liabilities 18,730 20,024 -6.5

Unitholders funds 662,702 697,174 -4.9

Market capitalisation2 648,675 569,952 13.8

Number of units in issue (000) 629,781 629,781 -

Net asset value per unit ($) 1.05 1.11 -5.4

Adjusted net asset value per unit ($)3 1.01 1.06 -4.7

Financial Ratio

2012 2011 %Change

Distribution per unit (cents)

1st half 3.13 3.13 -

2nd half 4.69 4.69 -

Total distribution 7.82 7.82 -

1 Distribution is derived from its residual cash flows in accordance with its distribution policy.2 Based on closing unit price as at the last trading day for the financial year.3 Based on total issued units, excluding distribution payable to Unitholders.

Distribution Per Unit (cents)

8

6

4

2

02011 2012

1H 3.13 3.13

2H 4.69 4.69Total 7.82 7.82

1Financial Highlights


4/88

CHAIRMANS STATEMENT

K-Green Trusts distribution

per unit for 2012 will be 7.82

cents, unchanged from 2011.

For the period from 1 January 2012 to

31 December 2012, total distribution

to KGTs Unitholders will amount to

$49.2 million.

$49.2m

Total Distribution

to Unitholders

Dear Unitholders,

STEADY PERFORMANCE,DEPENDABLE DISTRIBUTIONSK-Green Trust (KGT) has again deliveredstable and reliable distributions toUnitholders, reflecting the quality

of the three assets in KGTs currentportfolio. These assets generatecash flows mainly from capacity oravailability-based payments throughlong-term concession agreementswith Singaporean statutory bodies.

For 2012, the total distribution toKGTs Unitholders will amount to$49.2 million. KGTs distribution per unitfor 2012 will be 7.82 cents, unchangedfrom 2011. The distribution yield willbe 7.6% based on the unit closingprice of $1.03 on 31 December 2012.

Net Asset Value (NAV) of the Group was$1.05 per unit as at end December 2012,compared to $1.11 as at end December

2011. In line with its distribution policy,KGT makes distributions from itsresidual cash flows, which are inexcess of net profit generated in theyear. Correspondingly, there was areduction in NAV.

PROVEN OPERATIONS, CONTINUOUSIMPROVEMENTIn 2012, Senoko Waste-to-Energy (WTE)Plant and Keppel Seghers Tuas WTEPlant continued to meet the requiredperformance and customer servicestandards under the IncinerationService Agreements with the NationalEnvironment Agency (NEA).

A milestone for KGT in 2012 was thecompletion of the flue gas treatmentupgrade project for the Senoko WTEPlant. This was delivered by KeppelSeghers Engineering Singaporewithin the contracted timeframe andbudget and, more commendably, withan accident-free safety record. Since

the successful upgrade, emissionsfor Senoko WTE Plant haveimproved, alongside the plantsoverall availability.

NEWater availability also improved atKeppel Seghers Ulu Pandan NEWater

Plant. As part of the preventivemaintenance regime, majormaintenance and replacement workswere scheduled and carried out onparts of the plant.

Beside regular maintenance, KGTalso enhanced the Keppel SeghersUlu Pandan NEWater Plant byinstalling a 1 MWp (megawatt peak)solar photovoltaic (PV) power planton the rooftops of the plant. For thisinstallation, in the third quarter of2012, KGT was awarded the SolarPioneer Award from the EnergyInnovation Programme Office, led bythe Singapore Economic DevelopmentBoard and the Energy Market Authority.

2 3K-Green Trust Report to Unitholders 2012 Chairmans Statement


5/88

acquiring these assets when theSponsor is ready to sell them. In themeantime, the Trustee-Managercontinues to work closely with KGTsSponsor to evaluate third partyopportunities that have the potentialto become part of the ROFR pipeline.

Despite the challenging environment,my fellow Board members and Iremain cautiously optimistic thatsuitable opportunities will be found toenhance our investment portfolio.

ACKNOWLEDGEMENTSI am pleased that our current portfoliohas continued to perform well in thepast year. I wish to thank my fellowBoard members for their guidance toKGT. I would also like to commend theclose working relationship between theOperations & Maintenance contractor,Keppel Seghers Engineering Singaporeand the Asset Management team ofthe Trustee-Manager for the smoothoperations of the plants. On behalf ofthe Board, I would like to express oursincere appreciation to Unitholdersfor their continued support.

Yours sincerely,

KHOR POH HWACHAIRMANKeppel Infrastructure FundManagement Pte Ltd (as Trustee-

Manager of K-Green Trust)21 January 2013

CHAIRMANS STATEMENT

Covering about 10,000 square metresof roof space, the PV installation isexpected to generate approximately1,000 MWh to 1,200 MWh each year.When completed in 1Q 2013, it will bethe largest rooftop solar power plantin Singapore and will help to mitigatethe impact of electricity costs for theNEWater Plants operations.

BACKDROP OF CHALLENGES,EMERGING OPPORTUNITIESThe unresolved Eurozone crisiscontinued to weigh down investment

appetite for assets in the troubledEuropean economies.

As governments sought to reducebudget deficits, renewable energysectors saw further cuts in feed-intariffs and the introduction of newenergy taxes. For example, Spainintroduced a new 6% energy tax thatalso applies to income from feed-intariffs given to existing solar projects.

But against this overcast backdrop,silver linings have emerged in the formof rapid cost reduction, particularly inthe solar PV sector, driven by intensecompetition among suppliers of solarpanels. The lower costs will increasethe commercial viability of moresolar PV projects, thereby increasingthe pool of potential targets foracquisition by KGT.

Closer to home, we continue to seeencouraging signs of an emergingrenewable market in Southeast Asia,with Malaysia and the Philippines

announcing their own feed-in tariffschemes for renewable energy in late2011 and mid-2012 respectively.However, more established schemes,such as those in Thailand, would offermore ready investment opportunitiesfor KGT.

The solar PV power plant developedat our Keppel Seghers Ulu PandanNEWater plant has the strategicobjective of helping KGTs Trustee-Manager gain better understandingof the technical aspects of owningand operating such plants. This willenable KGT to take on more of suchinvestments with greater confidenceand speed as opportunities arise.

To build up our investment pipeline,KGT will seek to identify credibleproject sponsors and assets in our

focus markets.

One other outcome of the economicuncertainty has been a flight to safetyto the stronger economies. This hasresulted in yield compression1 asdemand for safer assets outstrippedsupply. Further, institutional investorsincluding pension funds have startedto look to infrastructure investmentsas an alternative to low-yielding incomeinstruments. We expect to see keenercompetition for infrastructure assets asmore infrastructure funds are formed- global fundraising for infrastructuretopped US$23.5 billion last year, higherthan the US$20.8 billion raised in 20112.

The increased competition forgood quality brownfield assetsand decreasing yield expectationis expected to continue in 2013.To improve returns, it may benecessary to consider participatingearlier during the construction stageof the projects, provided that theconstruction risks can be mitigated.

The Rights of First Refusal (ROFR)Assets (under the ROFR Deed withthe Sponsor, Keppel IntegratedEngineering Limited) in the pipelineare undergoing upgrading andexpansion. KGT will consider

The flue gas treatment facilities upgrade for theSenoko Waste-to-Energy plant was completedin June 2012 with excellent safety record, withinbudget and ahead of schedule.

1 R. Guimares, What accounts for the fall in UK ten-year government bond yields?,Quarterly Bulletin 2012 Q3, Bank of England,http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/qb120302.pdf

2 A. Thomson, Fundraising continues upward climb, Infrastructure Investor, 15 January 2013,http://www.infrastructureinvestor.com/Article.aspx?article=71178

4 5K-Green Trust Report to Unitholders 2012 Chairmans Statement


6/88

K-GREEN TRUST AT A GLANCE

Profit after tax for FY 2012 was

$14.8 million.

$14.8mNet Profit

Net asset value (NAV) per unit was $1.05

as at 31 December 2012. Adjusted NAV

based on total issued units (excluding

2H 2012 distribution payable to

Unitholders) was $1.01.

$1.05NAV Per Unit

Distribution yield will be 7.6% based

on unit closing price of $1.03 on

31 December 2012.

7.6%Distribution Yield

Net assets of $662.7 million as at

31 December 2012.

$662.7mNet Assets

Total distribution per unit for FY 2012

will be 7.82 cents.

7.82Distribution Per Unit

Earnings per unit for FY 2012

were 2.35 cents.

2.35Earnings Per Unit

K-Green Trust has again delivered stable and reliable distributions to Unitholders.

6 K-Green Trust Report to Unitholders 2012


7/88

Optimising capital structure. Maintaining prudent

financial leverage.

Building sustainableearnings through proactiveasset management.

Improving operationalperformance and efficienciesthrough active engagement withOperations and Maintenance(O&M) contractors.

Leveraging the Sponsors, KeppelIntegrated Engineering, extensivegreen infrastructure expertise,

international reach and businessnetwork to identify and assesspotential acquisition opportunities.

Acquiring assets from the Sponsorthrough the rights of firstrefusal granted.

Building business networks foracquisition deal flow.

Seeking like-minded partners withstrong development capabilities tobuild up acquisition pipeline.

SUSTAIN ASSET

PERFORMANCE

SYNERGISEWITH SPONSOR

ACQUIRE QUALITYASSETS

IMPROVE CAPITALEFFICIENCY

Leveraging technology to improveoperational performance. Upholding safety and

environmental standards.

Exploring opportunities forco-investing in assets withthe Sponsor.

Ensuring smooth assetoperations by tapping on theSponsor and its subsidiariesstrong technical, O&M andEngineering, Procurement andConstruction expertise.

Focusing on operational projectsthat provide regular and/orpredictable cash flows, backedby long-term contracts withcreditworthy and reputable

off-takers.

STRATEGIC DIRECTIONS

The investment mandate of K-Green Trust (KGT) is to invest in green infrastructure assets (including, but not limitedto, waste management, water treatment, water reclamation, renewable energy, energy efficiency and other greeninitiatives) in Singapore and globally with a focus on Asia, Europe and the Middle East.

KGT aims to deliver sustainable returns to its Unitholders through executing the following strategies:

EXECUTIONSTRATEGY

Maintaining sufficientfinancial flexibility for allassets and businesses.

7Strategic Directions


8/88

BOARD OF DIRECTORS

MR KHOR POH HWA, 62NON-EXECUTIVE ANDNON-INDEPENDENT DIRECTORAND CHAIRMAN OF THE BOARD

Bachelor of Engineering (Civil),Singapore University

Master of Science (Civil Engineering),National University of Singapore

MR ALAN OW SOON SIAN, 65INDEPENDENT DIRECTOR

Bachelor of Social Sciences(Second Class Honours, Lower Division),University of Singapore

International Tax Program,Harvard Law School

Advance Management Program,Harvard Business School

Date of first appointment as a director:

11 February 2010Length of service as a director(as at 31 December 2012):2 years 10 months

Board Committee(s) served on:

Nominating Committee (Member)

Present Directorships(as at 31 December 2012):

Listed companies

Hock Lian Seng Holdings LimitedKeppel Infrastructure Fund ManagementPte Ltd (the Trustee-Manager ofK-Green Trust)

Other principal directorships

Sino-Singapore Tianjin Eco-City Investmentand Development Co., Ltd

Singapore-Tianjin Eco-City InvestmentHoldings Pte Ltd

Keppel Group Eco-City Investment Pte Ltd

Substantial Enterprises Limited

Keppel Land China Limited

Major Appointments (other than

directorships):Nil

Past Directorships held over thepreceding 5 years (from 1 January 2008to 31 December 2012):

Keppel Land Limited

Others:

Adviser to Keppel Corporation Limited intownship and infrastructure developmentbetween May 2007 and April 2010

Deputy Chief Executive Officer of China-Singapore Suzhou Industrial ParkDevelopment Co Ltd from 1995 to 1997

(seconded from Singapore PublicWorks Department)

Chief Executive Officer of CPG CorporationPte Ltd from 1999 to 2005 and continued toserve as its Senior Adviser up till 2008

Member of Asia Pacific EconomicCo-operation Business Advisory Council,Singapore-British Business Council,Singapore-Shandong Business Council andthe Network China Steering Committee

Former President of the Society of ProjectManagers, Singapore and the Singapore-China Suzhou Club

Date of first appointment as a director:11 February 2010

Length of service as a director(as at 31 December 2012):2 years 10 months


Nominating Committee (Chairman)

Audit Committee (Member)


Listed companies

M1 Limited

Keppel Infrastructure Fund ManagementPte Ltd (the Trustee-Manager ofK-Green Trust)


Nil

Major Appointments (other thandirectorships):

Tax consultant (Non-legal practitioner)with KhattarWong

Vice President of Morning StarCommunity Services


Tax Academy of Singapore (TAS)

Others:

Former senior deputy commissioner ofInland Revenue Authority of SingaporeFormer Chief Executive Officer of TAS(2006-2007)

Awarded the Public AdministrationBronze Medal

Awarded the Public AdministrationSilver Medal

Awarded the Public AdministrationGold Medal



9/88

MR PAUL MA KAH WOH, 65INDEPENDENT DIRECTOR

Fellow of the Institute of CharteredAccountants in England and Wales

Member of the Institute of Certified PublicAccountants of Singapore

MS QUEK SOO HOON, 59INDEPENDENT DIRECTOR

Bachelor of Science (Economics)(First Class Honours)Fellowship at the Institute of Actuaries(United Kingdom)




Audit Committee (Chairman)Nominating Committee (Member)

Conflicts Resolution Committee (Member)


Listed companies

Hwa Hong Corporation Ltd

SMRT Corporation Ltd

Mapletree Logistics Trust Management Ltd(manager of the Mapletree Logistics Trust)

Keppel Infrastructure Fund Management PteLtd (the Trustee-Manager of K-Green Trust)


Mapletree Investment Pte Ltd

CapitaLand China Development Fund Pte Ltd

CapitaLand China Development Fund II Ltd

Nucleus Connect Pte Ltd

National Heritage Board


directorships):Trustee on the board of trustees of theNational University of Singapore(Chairman of Audit Committee)


Ascott Residence Trust Management Ltd

Bata Emerging Markets Limited

Golden Harvest Entertainment(Holdings) Limited

SMRT Buses Ltd

SMRT Road Holdings Ltd

SMRT Trains Ltd

Tenet Insurance Company Ltd

Others:

Nil




Conflicts Resolution Committee (Chairman)

Audit Committee (Member)

Remuneration Committee (Member)


Listed companies



School of the Arts, Singapore

Life Planning Associates Pte Ltd

Singapore Deposit InsuranceCorporation Ltd

Special Needs Trust Company Ltd

Enactus Singapore (formerly known asStudents-in-Free-Enterprise (SIFE))


Operating Partner, iGlobe Partners (II)Pte Ltd


Nil

Others:

Distinguished Fellow of the InternationalAssociation of Insurance Singapore

9Board of Directors


10/88

BOARD OF DIRECTORS

MR THIO SHEN YI, 46INDEPENDENT DIRECTOR

Bachelor of Arts, Master of Arts,University of Cambridge

Senior Counsel

Fellow of the Singapore Instituteof Arbitrators

MR TEO SOON HOE, 63NON-EXECUTIVE ANDNON-INDEPENDENT DIRECTOR

Bachelor of Business Administration,University of Singapore

Member of the Wharton Society of Fellows,University of Pennsylvania




Remuneration Committee (Chairman)

Conflicts Resolution Committee (Member)


Listed companies



TSMP Law Corporation

OUE Realty Pte Ltd

Obiter Dicta Pte Ltd

Camembert Holdings Pte Ltd

The Community Justice Centre Limited


directorships):Vice President, Law Society of Singapore

Senate Member, Singapore Academy of Law

Panel arbitrator of the SingaporeInternational Arbitration Centre andthe Kuala Lumpur Regional Centrefor Arbitration

Member, Legal Education and StudiesCommittee, Singapore Academy of Law

Member of the Management Committee ofthe Law Societys Pro Bono, Learning andSupport Services

Member, Ethics Committee, Law Societyof Singapore


Allens Arthur Robinson TSMP

Others:

Nil




Remuneration Committee (Member)


Listed companies

Keppel Corporation Limited(Senior Executive Director)

Keppel Telecommunications &Transportation Ltd (Chairman)

M1 Limited (Chairman)

Keppel Philippines Holding Inc (Chairman)

Keppel Infrastructure Fund ManagementPte Ltd (the Trustee-Manager ofK-Green Trust)k1 Ventures Limited


Keppel Offshore & Marine Ltd

Keppel Energy Pte Ltd

Singapore Tianjin Eco-City InvestmentHoldings Pte Ltd


Nil


Singapore Petroleum Company Limited

Travelmore Pte Ltd

Keppel Land Limited

Others:

Former Group Finance Director ofKeppel Corporation Limited



11/88

BG(NS) TAY LIM HENG, 49NON-EXECUTIVE ANDNON-INDEPENDENT DIRECTOR

Bachelor (Honours) in Engineering Scienceand Economics, University of Oxford

Masters in Public Administration,Harvard University

Attended Advanced ManagementProgramme, Harvard Business School


12 July 2011Length of service as a director(as at 31 December 2012):1 year 5 months


Nil


Listed companies


Other principal directorshipsKeppel Integrated Engineering Limited

EM Services Private Limited

Keppel Seghers Engineering SingaporePte Ltd

Keppel Land China Limited

Keppel Seghers Belgium N.V.

Keppel DHCS Pte Ltd

Keppel FMO Pte Ltd

Keppel Sea Scan Pte Ltd

Keppel Prince Engineering Pty Ltd

Singapore Tianjin Eco-City InvestmentHoldings Pte Ltd

GE Keppel Energy Services Pte Ltd

Keppel Shipyard Limited

Keppel Singmarine Pte Ltd


directorships):Chief Executive Officer, Keppel IntegratedEngineering Limited

Head, Sustainable Development,Keppel Group

President, Singapore Water Association


DSO National Laboratories

Singapore Maritime Foundation

Maritime & Port Authority of Singapore

Others:

Former Deputy Secretary (Development),Ministry of National Development

Former Chief Executive, Maritime and PortAuthority of Singapore

Former Board Member, SingaporeMaritime Foundation and Centre forMaritime Studies (NUS)Former Member of Class NKSingapore Committee

Former Vice President of the InternationalAssociation of Ports and Harbours

Awarded Public Administration Medal(Gold) (Military)

11Board of Directors


12/88

1. MR VARADARAJAN RAMESHMAINTENANCE MANAGER,KEPPEL SEGHERS TUAS WASTE-TO-ENERGY PLANT

2. MR FRANCIS NG TONG WAHDEPUTY PLANT MANAGER,KEPPEL SEGHERS TUASWASTE-TO-ENERGY PLANT

3 MR CHEANG WHYE THENGSENIOR PLANT MANAGER,KEPPEL SEGHERS ULU PANDANNEWATER PLANT

4. MR GOH CHIN AIKGENERAL MANAGER(OPERATIONS AND MAINTENANCE)

5. MR LIM CHIOW GIAPSENIOR GENERAL MANAGER(SPECIAL PROJECTS)

6. MR VENKAT PATNAIKGENERAL MANAGER(PLANT OPERATIONS),SENOKO WASTE-TO-ENERGYPLANT AND KEPPEL SEGHERSTUAS WASTE-TO-ENERGY PLANT

7. MR SIVAKUMAR BALAJIDEPUTY PLANT MANAGER,KEPPEL SEGHERS ULU PANDANNEWATER PLANT

8. MR LEE SONG KOIOPERATION MANAGER,SENOKO WASTE-TO-ENERGYPLANT

9. MR STEVEN LEE FOOK SENGMAINTENANCE MANAGER,SENOKO WASTE-TO-ENERGYPLANT

OPERATIONS AND

MAINTENANCE MANAGERS

KEY EXECUTIVES OF THE

TRUSTEE-MANAGER

1. MR LU YEOW CHORSENIOR INVESTMENT MANAGER

2. MR LIEW YUEN CHENGSENIOR ASSET MANAGER

3. MS KANG LENG HUICHIEF FINANCIAL OFFICER

4. MR THOMAS PANG THIENG HWICHIEF EXECUTIVE OFFICER

5. MR KOH HEE SONGSENIOR ADVISER

6. MS FOO CHIH CHISENIOR INVESTMENT MANAGER

7. MS WENDY LIM HUI YIASSISTANT FINANCE MANAGER

1 2

34

5

6 7

1

2

3

45

6 78

9

12 13K-Green Trust Report to Unitholders 2012 Operations and Maintenance Managers


13/88

MR THOMAS PANG THIENG HWI

CHIEF EXECUTIVE OFFICERMr Thomas Pang Thieng Hwi has beenthe Chief Executive Officer (CEO) ofthe Trustee-Manager since June 2010.

As the CEO of the Trustee-Manager,he is responsible for working withthe Board to determine the strategyfor K-Green Trust (KGT). He workswith other members of the Trustee-Managers management team toexecute the stated strategy of theTrustee-Manager.

Mr Pang joined Keppel Offshore& Marine Ltd in 2002 as a SeniorManager (Merger Integration Office)to assist in the merger integrationof Keppel FELS Limited and KeppelShipyard Limited. He was promotedto General Manager (CorporateDevelopment) in 2007 and oversaw theinvestment, mergers and acquisitionsand strategic planning of KeppelOffshore & Marine Ltd.

Prior to that, he was an InvestmentManager with Vertex Management

(United Kingdom) from 1998 to 2001.Mr Pang was also the Vice President(Central USA) of the SingaporeTourism Board from 1995 to 1998,as well as Assistant Head (ServicesGroup, Enterprise DevelopmentDivision) at the EconomicDevelopment Board of Singaporefrom 1988 to 1995.

Mr Pang obtained a Bachelor of Artsdegree and a Master of Arts degreefrom the University of Cambridge in1988 and 1993 respectively.

MR KOH HEE SONG

SENIOR ADVISERMr Koh Hee Song has been a SeniorAdviser to the Trustee-Manager sinceJune 2010.

As a Senior Adviser, he works withthe other members of the Trustee-Managers management team toevaluate potential acquisitions and/or divestments and recommendand analyse potential assetenhancement initiatives from atechnical perspective. He also advisesthe management team on technical

matters relating to the business ofKGT as and when the circumstancesrequire. Prior to June 2010, Mr Kohwas a Senior Adviser to KeppelSeghers Engineering Singapore PteLtd for matters pertaining to solidwaste management projects.

Mr Koh started his career as amechanical engineer with theSewerage Department of the PublicWorks Department in 1969. In 1990,Mr Koh was appointed as the Head ofthe Engineering Services Department

in the Ministry of the Environmentand the National Environment Agency(NEA) upon its formation in 2002,until his retirement in 2003.

Mr Koh was awarded the ColomboPlan Scholarship for MechanicalEngineering, Australia in 1965 and heobtained a Bachelor of Engineering(Mechanical) (Second Class Honours,Division One) in 1968 from theUniversity of Sydney. Mr Koh was alsoawarded the Public AdministrationBronze Medal in 1981, the Public

Administration Silver Medal in 2002and the Long Service Medal in 2003by the Government of Singapore inrecognition of his contribution to publicadministration in Singapore. Mr Kohis also a member of the ProfessionalEngineers Board, Singapore.

MS KANG LENG HUI

CHIEF FINANCIAL OFFICERMs Kang Leng Hui has been the ChiefFinancial Officer of the Trustee-Manager since June 2010.

Her responsibility is largely focusedon the financial performance and otherfinancial matters of KGT.

Ms Kang has over 10 years ofexperience in finance, accountingand external auditing. Ms Kangjoined Keppel Corporation Limited(Keppel Corporation) in 2005. In her

role as Finance Manager with KeppelCorporation, she was responsiblefor the value management of KeppelCorporation, management reportingand other financial-related matters.

Prior to joining Keppel Corporation,she worked at PricewaterhouseCoopers,where she left as an Audit Manager.

Ms Kang graduated from NanyangTechnological University with aBachelor of Accountancy Degree(Honours). She is also a member

of the Institute of Certified PublicAccountants of Singapore.

MS FOO CHIH CHISENIOR INVESTMENT MANAGERMs Foo Chih Chi has been a SeniorInvestment Manager of the Trustee-Manager since June 2010.

As Senior Investment Manager, sheis responsible for identifying andevaluating potential acquisitions with aview to enhance KGTs portfolio.

Ms Foo has over 10 years ofexperience in investment evaluation,corporate strategy and new businessdevelopment. She joined Keppel

KEY EXECUTIVES OF THE

TRUSTEE-MANAGER



14/88

MR LIEW YUEN CHENG

SENIOR ASSET MANAGERMr Liew Yuen Cheng is the SeniorAsset Manager of the Trustee-Manager. He joined the Trustee-Manager in June 2010.

As the Senior Asset Manager, Mr Liewimplements asset management plansfor KGTs asset portfolio by engagingthe Operations and Maintenancecontractor to ensure that the requiredservice standards are met and alsoto enhance operational performance.He works with the Engineering,

Procurement and Construction (EPC)contractor in asset enhancement andupgrading projects as well.

Mr Liew joined Keppel FELSLimited in 1998, where he heldvarious positions in the production,engineering and marketingdepartments. From 2004 to 2008,he was seconded to CaspianShipyard Company Ltd (an overseassubsidiary of Keppel Offshore &Marine Ltd) in Azerbaijan, where heheaded the marketing, procurement

and subcontracting functions asCommercial Manager. Prior tojoining the Trustee-Manager, hewas a Project Manager for EPC rigconstruction projects in Keppel FELSLimited in Singapore.

Mr Liew obtained a Bachelor ofEngineering (First Class Honours)degree in Marine Technology(Offshore Engineering) from theUniversity of Newcastle upon Tyne(United Kingdom) in 2001 and aDiploma (with Merit) in Shipbuilding &

Offshore Engineering from the NgeeAnn Polytechnic (Singapore) in 1998.Mr Liew is a member of the Societyof Naval Architects and MarineEngineers Singapore (SNAMES) andwas a Council Member of SNAMESfrom 2002 to 2004.

Corporation in 2000, where as a part

of Keppel Corporations strategicdevelopment and planning division, shewas responsible for corporate strategyand new business development.

Ms Foo obtained a Bachelor ofBusiness Administration from theUniversity of Michigan, School ofBusiness Administration in 1999.

MR LU YEOW CHORSENIOR INVESTMENT MANAGERMr Lu Yeow Chor joined the Trustee-Manager as a Senior Investment

Manager in September 2012.

His main responsibility includesidentifying and assessing potentialassets and projects for acquisition toenhance KGTs portfolio.

He started as a civil / geotechnicalengineer with Halliburton (KBR), UK,in 1996 for seven years prior to joiningHalifax Bank of Scotland InfrastructureFinance UK as an Associate Directorworking on Private Finance Initiative(PFI), Public Private Partnership (PPP)

and project finance transactions. In2008 he joined Biwater InternationalLtd. (UK) as a Project FinanceManager working on Middle East andNorth Africa (MENA) water projects.Mr Lu returned to Singapore in 2010,joining Keppel Integrated Engineeringas a Deputy General Manager forInvestments.Mr Lu obtained a Bachelor ofEngineering (Civil) (Honours)from Leeds University, a Doctorof Philosophy in Geotechnical

Engineering from the Universityof Cambridge, and a Masters inBusiness Administration from CassBusiness School (City University).He is a chartered civil engineer, UK.

MS WENDY LIM HUI YI

ASSISTANT FINANCE MANAGERMs Wendy Lim Hui Yi is the AssistantFinance Manager of the Trustee-Manager. She joined the Trustee-Manager in April 2010.

Ms Lim assists the Chief FinancialOfficer of the Trustee-Managerwith the financial and managementreporting of the Trustee-Manager andKGT Group. She was responsible forsetting up the accounting systemsand also the completion accounts ofthe entities in KGT Group prior to the

listing of KGT.

Ms Lim has more than 10 yearsof experience in financial andmanagement reporting. She joinedKeppel Corporation in 2000, whereshe was exposed to the variousfinance functions in the Group Control& Accounts department.

Ms Lim holds a Diploma inAccountancy from Ngee AnnPolytechnic and a professionalcertification from the Association

of Chartered Certified Accountants.She is a Certified Public Accountantof the Institute of Certified PublicAccountants of Singapore.

15Key Executives of the Trustee-Manager


15/88

MR LIM CHIOW GIAP

SENIOR GENERAL MANAGER(SPECIAL PROJECTS)Mr Lim Chiow Giap is the SeniorGeneral Manager (Special Projects)of Keppel Seghers EngineeringSingapore Pte Ltd (Keppel Seghers).He is responsible for developingKeppel Seghers global operationsand maintenance business.

Prior to joining Keppel Seghers in2008, Mr Lim was a director of PUB,Singapores national water agency,

from 2001 to 2007.

Mr Lim is a Professional Engineerwith 28 years of experience inthe planning, development andmanagement of large water,environmental and utilities projectsin Singapore and overseas. He wasthe recipient of the 2003 SingaporeNational Day Award the PublicAdministration (Silver) Medal.

He holds a Bachelor of CivilEngineering (First Class) degree from

University of Auckland, New Zealand,and attended the InternationalExecutive Programme in INSEADBusiness School, France. He is aSenior Member of the Institution ofEngineers, Singapore.

MR GOH CHIN AIK

GENERAL MANAGER(OPERATIONS AND MAINTENANCE)Mr Goh Chin Aik is the GeneralManager (Operations andMaintenance) of Keppel Seghers.He is responsible for Keppel Seghersglobal process plants businessand also the setting up of globalplant operations.

Mr Goh is a Professional Engineerand Certified System EngineeringProfessional with more than 27

years of experience in the planning,design, operations, maintenance,construction, commissioning,acquisition, development andmanagement of large incinerationplants, water and wastewater plants,as well as environmental and utilitiesprojects in Singapore and overseas.

He holds a Bachelor of MechanicalEngineering degree and a Masterof Science degree from theNational University of Singapore.He is a Member of the Institution of

Engineers, Member of Institution ofEngineering and Technology and aFirst Grade Steam Engineer.

MR VENKAT PATNAIK

GENERAL MANAGER(PLANT OPERATIONS),SENOKO WASTE-TO-ENERGY PLANTAND KEPPEL SEGHERS TUASWASTE-TO-ENERGY PLANTMr Venkat Patnaik oversees theoperations and maintenance of bothSenoko Waste-to-Energy Plant andKeppel Seghers Tuas Waste-to-Energy Plant.

Mr Patnaik has more than 26 yearsof experience in the power industry.

He has experience in managingnuclear, combined cycle and cogenplant projects.

He holds a Bachelor of ElectricalEngineering (First Class Honours)from the Regional EngineeringCollege of the University of Kashmir.He is a member of the Institution ofEngineers (India).

OPERATIONS AND

MAINTENANCE MANAGERS



16/88

MR CHEANG WHYE THENG

SENIOR PLANT MANAGER,KEPPEL SEGHERS ULU PANDANNEWATER PLANTMr Cheang Whye Theng overseesthe operations and maintenanceof Keppel Seghers Ulu PandanNEWater Plant.

Mr Cheang has over 31 years ofexperience in the operations andmaintenance of water and wastewatertreatment plants and chemicalplants in various industries,

including the petrochemicaland chemical industries.

Mr Cheang holds a Bachelor ofScience (Chemical Engineering) fromthe University of Singapore.

MR SIVAKUMAR BALAJIDEPUTY PLANT MANAGER,KEPPEL SEGHERS ULU PANDANNEWATER PLANTMr Sivakumar Balaji is responsiblefor managing the operations and

maintenance of Keppel SeghersUlu Pandan NEWater Plant. He hasmore than 18 years of experiencein membrane-based large-scaleseawater desalination plants,brackish water treatment andNEWater plant operations.

Prior to joining Keppel Seghers, heworked for Hyflux as a Plant Managerfor a seawater desalination plantand as Process Manager for theDesign Division, where he worked

on design aspects of large scaleseawater desalination projects andinternational bids. In addition, he alsohas experience in the testing andcommissioning of desalination plantsand waste water plants.

He has presented numerous paperson the operational aspects of seawaterdesalination plants through theInternational Desalination Association.Mr Balaji holds a Master of Sciencedegree in Environmental Science and

a Bachelor of Engineering from AnnaUniversity in Chennai, India.

MR FRANCIS NG TONG WAH

DEPUTY PLANT MANAGER,KEPPEL SEGHERS TUASWASTE-TO-ENERGY PLANTMr Francis Ng Tong Wah isresponsible for the overall operationsand maintenance of Keppel SeghersTuas Waste-to-Energy Plant. He hasmore than 13 years of experiencein the waste-to-energy industry.He was the Operations Manager ofSenoko Waste-to-Energy Plant fromDecember 2009 to January 2012.

Prior to joining Keppel Seghers, hewas an Operations Engineer with theNational Environment Agency (NEA),where he was involved in the smoothand safe operations of Senoko Waste-To-Energy Plant.

Mr Ng holds a Bachelor ofEngineering (Electrical andElectronics Engineering) fromNanyang Technological University.

MR VARADARAJAN RAMESH

MAINTENANCE MANAGER,KEPPEL SEGHERS TUASWASTE-TO-ENERGY PLANTMr Varadarajan Ramesh isresponsible for preventive, routineand non-routine maintenance andrepairs of Keppel Seghers TuasWaste-to-Energy Plant.

Mr Ramesh has over 22 years ofexperience in the field of plantautomation, involving process, steel,rubber, power, cement and machine

tool industries.

He holds a Bachelor ofEngineering degree in Electricaland Electronic Engineering.

MR LEE SONG KOI

OPERATION MANAGER,SENOKO WASTE-TO-ENERGY PLANTMr Lee Song Koi is responsible for theoverall operations of Senoko Waste-to-Energy Plant.

He has more than 26 years ofexperience in the waste-to-energyindustry. He was the OperationsManager of Keppel Seghers TuasWaste-to-Energy Plant from June2011 to January 2012. Prior to joiningKeppel Seghers, he was a Senior

Technical Officer with the NationalEnvironment Agency, where he wasinvolved in the testing, commissioningas well as smooth and safe operationsof various waste-to-energy plantsin Singapore.

He holds a Technical Diplomain Manufacturing Engineering(with Certificate of Merit) fromSingapore Polytechnic.

MR STEVEN LEE FOOK SENG

MAINTENANCE MANAGER,SENOKO WASTE-TO-ENERGY PLANTMr Steven Lee Fook Seng isresponsible for preventive, routineand non-routine maintenance andrepairs of Senoko Waste-to-Energy Plant.

Mr Lee has over 40 years of workingexperience with the Keppel Group,including over 10 years of experiencein the environmental engineeringarm, where he held various positions

in project management, testing andcommissioning as well as operationsand maintenance.

17Operations and Maintenance Managers


17/88

We will strengthen our

core and invest for growth

to build a successful

portfolio of assets.

SHAPINGTHE FUTURE

A strong portfolio of quality assets has enabled us to deliver a steady performanceand dependable distributions. With focus on a sustainable future, we will build onour firm foundation and pursue growth prudently to generate long-term value forour Unitholders.


18/88

K-Green Trusts current portfolio comprises Senoko Waste-

to-Energy Plant, Keppel Seghers Tuas Waste-to-Energy Plant

and Keppel Seghers Ulu Pandan NEWater Plant.

OVERVIEWK-Green Trust (KGT) actively engagesits Sponsor, Keppel IntegratedEngineering (KIE), and its subsidiariesto ensure technical, Operationsand Maintenance (O&M), as wellas Engineering, Procurement andConstruction (EPC) support forsmooth asset operations. KGT worksclosely with KIE to: uphold safety and environmental

standards; build sustainable earnings through

proactive asset management; improve operational performance

and efficiencies; leverage technology to improve

operational performance; and strengthen risk management

practices through robust businesscontinuity plans.

Senoko Waste-to-Energy (WTE) Plantand Keppel Seghers Tuas WTE Planthave the capacity to treat close tohalf of Singapores incinerable waste.In diverting untreated waste awayfrom landfill, incineration plants helpmitigate greenhouse gas emissionsas landfills release methane gaswhen the organic waste decompose.Modern incineration plants canalso reduce the volume of waste byas much as 90%, thus significantlyincreasing the lifespan of landfills.By using waste as fuel, incinerationplants produce green energy, therebyreducing dependency on fossil fuels.

Senoko WTE Plant is the onlyincineration plant located outsidethe Tuas area to serve the eastern,northern and central parts of

Singapore. It was acquired by SenokoTrust on 31 August 2009.

Keppel Seghers Tuas WTE Plant isSingapores fifth incineration plantbuilt and the first in Singapore builtunder the Public-Private-Partnershipinitiative. It incorporates KeppelSeghers in-house technologies suchas the air-cooled grate and flue gastreatment (FGT) system and is thefirst incineration plant in Singaporeto showcase WTE technology from aSingaporean company.

Senoko WTE Plant and KeppelSeghers Tuas WTE Plant have

entered into Incineration ServiceAgreements (ISA) with the NationalEnvironment Agency (NEA) for 15 yearscommenced in September 2009, and

OPERATIONS REVIEW

1



19/88

During the review period, Senoko

WTE Plant achieved Time AvailabilityFactor exceeding the 73.7%(for the third contract year ended31 August 2012) and 72.9% (for thefourth contract year) thresholdsrequired to receive full Fixed CapacityPayments from NEA.

Keppel Seghers Tuas WTE Plantachieved Time Availability Factorabove the 77.7% (third contract yearended 29 October 2012) and 76.2%(for the fourth contract year)

thresholds required to receive fullFixed Capacity Payments from NEA.

Senoko WTE Plant and Keppel SeghersTuas WTE Plant also met their otherobligations under the ISAs, namelyAverage Total Organic Content ofbottom ash, Turnaround Time of refusetrucks and electricity generation.

Both plants achieved TestedIncineration Capacities (TICs) abovetheir CICs. Senoko WTE Plants newTIC was 2,880 tonnes per day.

Keppel Seghers Tuas WTE Plantsnew TIC was 1,050 tonnes per day.

Both plants completed their third

contract year in 2012.

There was one instance where fluegas emissions did not meet requiredemission standards. That has beenrectified by the O&M contractor.

There were three Lost Time Incidents(LTIs) in total at the two plants duringthe reporting period. While theAccident Frequency Rates for bothplants were slightly above industrialaverage, the Accident Severity Rateswere far below the industrial average.

SENOKO WTE PLANT FLUE GASTREATMENT UPGRADEUnder the Senoko ISA, the SenokoTrustee was required to upgradeits FGT facilities by the third quarterof 2012.

The upgrade of FGT facilities involvedbuilding two new treatment plantsdownstream of the existing induceddraft fans, to treat the flue gasesto meet the required emission

standards. Each new FGT streamwill treat the combined flue gasesfrom three incinerator-boiler lines.Each stream comprises a venturireactor for hydrated lime, a baghouse compartment consisting ofan integrated fabric filter sectionand a dioxin catalyst section aswell as a booster induced draft fan.The scrubbed flue gases are thendischarged into the atmosphere viathe chimneys.

The project has been completedwithout any LTI, ahead of scheduleand within budget.

KEPPEL SEGHERS ULU PANDANNEWATER PLANTKeppel Seghers Ulu Pandan NEWaterPlant had consistently achieved morethan 98% plant availability in 2012.

25 years commenced in October 2009

respectively. Majority of their incomescome from capacity payments, whichoffer stable sources of income withlittle correlation to economic orpopulation fluctuations.

Keppel Seghers Ulu Pandan NEWaterPlant is one of Singapores largestNEWater plants. Operational since2007, it meets the demands of theindustrial and commercial sectors inthe western and central regions ofSingapore. The plant entered into a

20-year NEWater Agreement (NWA)with PUB, Singapores national wateragency since March 2007.

SENOKO WTE PLANT AND KEPPELSEGHERS TUAS WTE PLANTSenoko WTE Plant and Keppel SeghersTuas WTE Plant have met the requiredPerformance and Customer ServiceStandards under the ISAs. In additionto full Fixed Capacity Payments fromNEA for meeting their ContractedIncineration Capacities (CICs), theplants also received variable payments

for refuse incineration services andelectricity exported.

2

1 KGT works closely with its Sponsor, KIE,for smooth asset operations.

2 The Senoko WTE Plant treats an averageof 2,100 tonnes of solid waste per day.

21Operations Review


20/88

OPERATIONS REVIEW

Time Availability Factor (12-Month Moving Average)

%

100

90

80

70

60

50

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Senoko WTE Plant Keppel Seghers Tuas WTE Plant

76.5 76.2 76.1 76.2 76.6 76.1 77.2 78.1 78.3 78.4 80.2 80.9 83.7 83.7 83.5 83.5 83.9 88.1 99.1 91.6 89.3 90.4 90.4 90.3

Availablity required to meet CICat TIC of 2,880 tonnes/day

Availablity required to meet CICat TIC of 1,050 tonnes/day

Average Total Organic Content of Bottom Ash

%

3.0

2.5

2.0

1.5

1.0

0.5

0

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Senoko WTE Plant Keppel Seghers Tuas WTE Plant

0.49 0.36 0.34 0.58 0.48 0.42 0.39 0.33 0.37 0.22 0.26 0.24 0.43 0.57 0.32 0.70 0.58 0.71 0.68 0.65 0.54 0.49 0.61 0.70

Level of organic content in incineration bottom ash where penalty payment is triggered

73.7

72.9

77.7

76.2



21/88

The plant also fulfilled other

requirements under the NWA, namelythe Required Storage Level, qualityspecifications of NEWater and theresidual waste produced.Availability payments are receivedin full when the NEWater warrantedcapacity of the NEWater plant isgreater than or equal to 148,000 m3per day. Full availability paymentswere received throughout the yearexcept for a few days in July 2012,when warranted capacity was reduceddue to equipment maintenance.However, there was minimal impact asthe costs associated with this periodof maintenance and reduced capacitywere borne by the O&M contractor.NEWater demand in 2013 is expectedto remain comparable to the demandin 2012. However, it will be affected byother sources of water supply availableto PUB. Ulu Pandan Trusts cashearnings could fluctuate dependingon changes in power revenue receivedfrom PUB in tandem with changes

in electricity price. To mitigate thefluctuations in electricity price, theTrustee-Manager had taken measuresto fix the price of electricity in 2012.

Keppel Seghers Ulu Pandan NEWater

Plant continued to maintain its goodsafety record and had no LTI in 2012.

FINANCIAL REVIEWGroup revenue for the financial yearended 31 December 2012 was $76.2million. Excluding constructionrevenue arising from the FGT upgradein both years, revenue improved by$3.5 million, representing a 5.4%increase compared to 2011. In 2012,KGT recorded a net profit of $14.8million, which was lower than 2011by $1.2 million mainly due to lowerconstruction profit of $0.8 millionfollowing the completion of SenokoWTE Plants FGT upgrading works.The decrease is offset by better O&Mprofit of $1.7 million, or 12.8%, mainlyattributable to the annual adjustmentsof O&M and power tariffs to accountfor changes in Consumer Price Indexand fuel price, as well as higheroutput from the WTE plants.Electricity costs were highercompared to 2011 by $1.8 million or

27%, largely due to higher electricityprice. Trust expenses were higher byabout $0.3 million, mainly for projectexpenses incurred by KGT.

Cash generated from operations of

$53.3 million for 2012 was $2.4 millionhigher than cash generated in 2011.After taking into account incometaxes paid, cash flow from operatingactivities was $52.3 million for 2012 ascompared to $38.0 million in 2011. Netcash used in investing activity of $7.9million was for the payment of the FGTupgrading contract and installation ofsolar photovoltaic system.

For the second half of 2012, KGTdeclared a distribution per unit of 4.69cents to its Unitholders. Togetherwith the 3.13 cents paid earlier in2012, the full year distribution will bemaintained at 7.82 cents, the sameamount as in 2011.

1 2

1 The photovoltaic installation at

the Keppel Seghers Ulu PandanNEWater Plant will be the largestrooftop solar power plant inSingapore when completed.

2 Keppel Seghers Tuas WTE Plantincorporates Keppel Seghersin-house technologies such as theflue gas treatment system.

23Operations Review


22/88

SUSTAINABILITY

REPORT

K-Green Trust is committed to create positivesocial impact by investing in projects that contribute

to sustainable urban development and mitigate the

environmental effects of urbanisation.

Our commitment to business

excellence is driven by our

unwavering focus on strong

corporate governance and prudent

risk management.

Resource efficiency is not only our

responsibility, it also makes goodbusiness sense.

Delivering quality products and

services are key in sharpening

our competitive edge.

People are the cornerstone

of our businesses.

As an employer of choice, we

are committed to grow and

nurture our talent pool through

continuous training and

development to help our peoplereach their full potential.

We want to instill a culture of

safety so that everyone who

comes to work goes home safe.

As a global corporate citizen,

we believe that as communities

thrive, we thrive. We give back

to communities wherever we

operate through our multi-faceted

approach towards Corporate

Social Responsibility.

We also believe that cultivating

a green mindset among our

employees will spur them to

adopt a sustainable lifestyle.

As leaders in our businesses, we

support industry programmes and

initiatives, and encourage open

dialogue for further growth.

PAGE 25 PAGE 26 PAGE 27

SUSTAINING

GROWTH

EMPOWERING

LIVES

NURTURING

COMMUNITIES



23/88

CORPORATE GOVERNANCE

The Trustee-Manager of K-GreenTrust (KGT), Keppel InfrastructureFund Management, believes thatcommitment to good corporategovernance is vital to thesustainability of the Trusts businessand performance.

Therefore, KGT will continueto ensure the timely disclosureof material information to itsUnitholders and the investing public,as the confidence of its Unitholders in

the Trustee-Manager is crucial to thesuccess of KGT.

By having a majority of independentdirectors on the Board of the Trustee-Manager, KGT ensures the fairtreatment of all Unitholders.

An Employee Code of Conduct isin place to set out the principles ofbusiness conduct expected of allemployees, as well as Keppel Groupsanti-bribery stance and positionwith regard to gifts, hospitality,

facilitation payments and dealingswith associates.

For more details on KGTs corporategovernance guidelines, please referto pages 31 to 48.

RISK MANAGEMENTKGT adopts a holistic andcomprehensive risk managementframework that identifies, evaluatesand manages risks in its decision-making process.

KGT, together with its Operationsand Maintenance (O&M) contractor,Keppel Seghers Engineering

Leveraging its close working relationship with the well-established O&M contractor of its assets, KGTfocuses on building its plants operational resilience.

Singapore (Keppel Seghers),identifies, reviews and assessesregularly the potential risks that mayaffect its operations.

One of the focal points is buildingthe plants operational resilienceto mitigate potential businessdisruptions. All plants have establishedprocesses to review, test and refinetheir Business Continuity Plans.

KGT and its O&M contractor willcontinue to scan for possible

threats and review plans to enhanceoperational preparedness.

For more details on KGTs riskmanagement strategy, please refer topage 49.

OPERATIONAL EXCELLENCEAs plant operations are the mainsource of KGTs income, KGT aims toachieve high availability of plants andmeet the required service standardsthrough working with established

O&M contractors.

Working with well-qualified O&Mcontractors with good track records

ensure that standards are closelybenchmarked to the best in theindustry, thereby reducing operationalrisk to KGT, the asset owner.

Keppel Seghers has strong Quality,Environment and Occupational Healthand Safety accreditations. It is ISO9001, 14001 and 18001-certified forits quality management system,environmental as well as occupationalhealth and safety policiesrespectively. These certificationsare audited annually by accredited

certification bodies.

In 2012, KGT was a Gold sponsorfor the inaugural WasteMET Asiaconference organised by the NationalEnvironment Agency and theWaste Management and RecyclingAssociation of Singapore. Theexhibition saw over 7,000 participantsfrom recycling, waste and resourceefficiency industries coming togetherto address industry challenges anddiscuss best practices and key market

trends. The event showcased thelatest innovations and technologiesin waste management, recycling andresource recovery solutions.

SUSTAININGGROWTH

The Trustee-Manageris committed to strongcorporate governance,prudent riskmanagement as wellas operational efficiencyand excellence.

25Sustainability Report Sustaining Growth


24/88

SAFETY AND HEALTHSafety is the top priority for KGT andis an integral part of the workplaceculture. The Trustee-Managerstrives to create a zero-incidentworkplace by working closely withits O&M contractor, Keppel Seghers.

To improve safety in its WTE plants,KGT sponsored and worked withthe Workplace Safety and HealthInstitute for a study in Improving

Health and Safety in the SingaporeWaste Management Industry.

All three of KGTs plants activelyparticipate in national safetyinitiatives and were past recipientsof commendations and awards inthe Workplace & Health Awardsorganised by Singapores WorkplaceSafety and Health Council (WSHC).

The flue gas treatment upgradeat Senoko Waste-to-Energy

(WTE) Plant was completed withan accident-free safety record,highlighting the effectivenessof KGTs close partnership with

its contractors and its efforts topromote safety.

The Trustee-Manager and its O&Mcontractor continue to raise safetystandards in KGTs assets - bizSAFELevel Three, the third stage of afive-step WSHC programme aimedat improving safety standards inthe workplace, was mandated as arequirement for all plant contractors.

In 2012, KGT introduced new safetyrequirements for refuse dischargein the Senoko WTE Plant, to furtherreduce the operational risk ofwaste collectors. Monthly incentiveschemes were also implemented toencourage plant staff to maintainhigh safety standards and improveexisting environmental, health andsafety processes.

Daily tool box meetings, safetybriefings, risk assessments, site

inspections as well as regularwalkabouts by senior managementare conducted to ensure that safetystandards are upheld.

Emergency drills and exercises forincidents such as fire and chemicalcontamination were carried out atKGTs plants to test and improve staffresponsiveness.

Hazard reporting and suggestionschemes are also in place toencourage staff and subcontractors tohighlight risks.

PEOPLE MATTERS

The Trustee-Manager emphasises theimportance of developing its staff andis dedicated to uphold the principlesof fair employment in its humanresource policies.

Such principles include a meritocraticrecruitment process, continual trainingand development, respectful treatmentof all employees and fair rewardsbased on performance and experience.

The Trustee-Manager also seeks to

promote a healthy work-life balancefor all staff and provide a workenvironment that encourages mutualrespect and teamwork.

EMPOWERINGLIVES

The Trustee-Managervalues its employeesand recognises theircontributions towardsachieving sustainablebusiness growth forthe company. A safeand healthy workenvironment is also ofparamount importance.

Emergency drills and exercises for incidents such as fire and chemical contamination were carried outat KGTs plants to test and improve staff responsiveness.



25/88

GREEN ENDEAVOURS

Besides investing in greeninfrastructure assets, the Trustee-Manager also believes in minimisingimpact to the environment duringoperations. In 2012, the Trustee-Manager together with its Sponsor,Keppel Integrated Engineering,recycled about 486kg of paperand plastic.

In 2012, KGT was awarded a SolarPioneer Award for its photovoltaic(PV) installation at Keppel Seghers

Ulu Pandan NEWater Plant (UPNP).

The PV installation is designed togenerate up to 1 MWp (megawattpeak), producing about 1,000 MWhto 1,200 MWh each year. The energygenerated is equivalent to the annualneeds of approximately 250 four-roomHDB flats, based on SP Services datafrom September 2011 to August 2012.This installation will lower the carbonfootprint of the plant and contributeto the national effort to reducedependency on traditional sources

of energy.

COMMUNITY RELATIONSKGT hosted some 3,500 visitors at itsplants in 2012. Representing diversesegments of the community, thevisitors included foreign delegates,community organisations andeducational institutions.

The plant tours allowed the visitorsto gain better appreciation ofSingapores waste managementpractices and water reuse solutions,including the importance of practicing

the 3Rs of reduce, reuse andrecycle. The Trustee-Manager andits O&M contractor will continue toengage and educate the community

on the importance of resource

conservation as part of its communityoutreach programme.

In May 2012, the Trustee-Managersupported the Singapore Universityof Technology and Designs (SUTD)inaugural Gala Dinner togetherwith other companies in the KeppelGroup to raise funds for the SUTDEndowment Fund. $2.5 million fromall donors was raised, and togetherwith the grant from SingaporesMinistry of Education, a total of

$10 million will go towards supportingSUTDs needy students.

KGT supported the Bull Charge 2012,a charity run organised by theSingapore Exchange, by participatingin and donating to the event. Held on16 November 2012, the event sawsome 4,200 participants and raiseda record amount of $1.388 millionin aid of four charities - the AsianWomens Welfare Association, FeiYue Community Services, the AutismAssociation (Singapore) and Shared

Services for Charities. The event alsoincluded the Chief Challenge organisedfor corporate chiefs, in which the CEOof the Trustee-Manager participated.

The Trustee-Manager participated in and donated to the Bull Charge 2012, a charity run that raised $1.388 million.

NURTURINGCOMMUNITIES

The Trustee-Manager iscommitted to contributemeaningfully to thewell-being of thecommunities and tosupport initiatives thatpromote sustainability.

27Sustainability Report Nurturing Communities


26/88

K-Green Trusts (KGT) unit price

was fairly stable for the most partof 2012. The stock reached a low of$0.90 in January 2012 and climbedsteadily to reach a high of $1.045 inOctober 2012. KGTs unit price closedat $1.03 on 31 December 2012, anincrease of 13.8% from $0.905 on30 December 2011.

In January 2012, KGT saw a spike intrading volume of almost 32 millionunits in a single day. This was mainlyattributable to the sale of KGT Units

by one of its substantial Unitholders,

a wholly-owned subsidiary ofTemasek Holdings (Private) Limited.For financial year 2012, the totalvolume of trade was 112.3 millionunits, which translated to an averagedaily traded volume of close to0.5 million units. Its stable unit priceperformance is a clear indication ofstrong support from investors for KGTas an investment vehicle that deliverssteady distribution yields, and for thelong-term prospects of the greeninfrastructure assets.

UNIT PRICE PERFORMANCE

Unit Price Performance and Trading Volume in 2012

million units $40 1.06

35 1.04

30 1.02

25 1.00

20 0.98

15 0.96

10 0.94

5 0.92

0 0.90Jan

2012Feb

2012Mar

2012Apr

2012May

2012Jun

2012Jul

2012Aug

2012Sep

2012Oct

2012Nov

2012Dec

2012

Closing Unit Price

Volume



27/88

SIGNIFICANT EVENTS

17 JANUARY 2012

K-Green Trust (KGT) announceddistribution payable of 4.69 centsper unit (DPU) for the period from1 July 2011 to 31 December 2011.

23 FEBRUARY 2012

KGT paid a DPU of 4.69 cents toUnitholders for the period from

1 July 2011 to 31 December 2011.

30 JUNE 2012

KGT completed the flue gastreatment facilities upgrade forSenoko Waste-to-Energy Plantwith excellent safety record, withinbudget and ahead of schedule.

16 JULY 2012

KGT announced DPU payable of3.13 cents for the period from1 January 2012 to 30 June 2012,

an amount unchanged from thecorresponding period in 2011.

16 AUGUST 2012

KGT paid a DPU of 3.13 cents tounitholders for the period from1 January 2012 to 30 June 2012.

24 OCTOBER 2012

KGT was awarded SolarPioneer Award by the EnergyInnovation Programme Office

(led by the Singapore EconomicDevelopment Board and theEnergy Market Authority) forits 1MWp solar photovoltaicinstallation at Keppel SeghersUlu Pandan NEWater Plant.

21 JANUARY 2013

KGT announced DPU payableof 4.69 cents for the period from1 July 2012 to 31 December 2012.

SIGNIFICANT EVENTS

1

1 Mr Thomas Pang, CEO of the

Trustee-Manager, received theSolar Pioneer Award on behalf ofKGT from Mr Andrew Tan, CEO ofSingapores National EnvironmentAgency.

2 Unitholders engaged in discussionwith the Chairman of the Trustee-Manager, Mr Khor Poh Hwa.

2

29Significant Events


28/88

Ulu Pandan TrustSenoko Trust

Senoko Waste-to-Energy PlantKeppel Seghers Ulu PandanNEWater Plant

100% of the unitsand 100% of theSenoko Notes

100% of the unitsand 100% of theTuas DBOO Notes

100% of the unitsand 100% of theUlu Pandan Notes

Tuas DBOO Trust

Keppel Seghers TuasWaste-to-Energy Plant

Notes:1 The Trustee-Manager holds: (i) 100% of the issued share capital in Senoko Waste-to-Energy Pte Ltd (Senoko Trustee), 100% of the units in the Senoko Trust

and 100% of the Senoko Notes; (ii) 100% of the issued share capital in Keppel Seghers Tuas Waste-to-Energy Plant Pte Ltd (Tuas DBOO Trustee), 100% ofthe units in the Tuas DBOO Trust and 100% of the Tuas DBOO Notes; and (iii ) 100% of the issued share capital in Keppel Seghers NEWater DevelopmentCo Pte Ltd (Ulu Pandan Trustee), 100% of the units in the Ulu Pandan Trust and 100% of the Ulu Pandan Notes, in each case on trust for the Unitholders of

K-Green Trust.2 The Senoko Trustee, the Tuas DBOO Trustee and the Ulu Pandan Trustee hold the assets and business undertakings relating to Senoko Waste-to-Energy

Plant, Keppel Seghers Tuas Waste-to-Energy Plant and Keppel Seghers Ulu Pandan NEWater Plant, respectively, on trust for the respective Unitholders ofthe Sub-Trusts.

3 The above unitholdings were based on the trust structure as at 31 December 2012.

100%

100% 49.2% 50.8%

Others

TRUST STRUCTURE

Others

Keppel Infrastructure FundManagement Pte Ltd(Trustee-Manager)

Keppel Corporation Limited

Keppel IntegratedEngineering Limited(Sponsor)

Trust Deed



29/88

The Board and management

of Keppel Infrastructure FundManagement Pte Ltd, as the Trustee-Manager of K-Green Trust (KGT), arefully committed to maintaining goodcorporate governance as they firmlybelieve that it is essential to protectthe best interests of the unitholdersof KGT (Unitholders).

The Business Trusts Act, Chapter31A, of Singapore (BTA) sets outthe requirements and obligationsin respect of corporate governance.The Business Trusts Regulations

(BTR) set out the requirements for,amongst other matters, the boardcomposition of a trustee-manager,the independence of its directors, andthe audit committee composition of aTrustee-Manager.

In addition, the Trustee-Manageradopts the Code of CorporateGovernance 20051 (the Code) as itsbenchmark for corporate governancepolicies and practices. The followingdescribes the Trustee-Managersmain corporate governance policiesand practices with specific referenceto the Code.

THE BOARDS CONDUCT OF AFFAIRSPrinciple 01:

Effective Board to lead and control

the company

The Board of Directors of the Trustee-Manager (the Board) is responsiblefor the overall management and

the corporate governance of KGT,

including establishing goals formanagement and monitoring theachievement of these goals.

The principal functions of the Boardare to: Decide on matters in relation

to KGTs activities which arematerial in nature, includingdecisions on strategic directionsand guidelines and the approvalof periodic plans and majorinvestments and divestments;

Oversee the business and

affairs of KGT, establish, withmanagement, the strategiesand financial objectives to beimplemented by management,and monitor the performanceof management;

Oversee processes for evaluatingthe adequacy of internal controls,risk management, financialreporting and compliance, andsatisfy itself as to the adequacyof such processes; and

Assume responsibility forcorporate governance.

All directors of the Trustee-Manager(the Directors) are expected toexercise independent judgment inthe best interests of KGT.To assist the Board in the dischargeof its oversight function, the AuditCommittee, the NominatingCommittee, the RemunerationCommittee and the Conflicts

Resolution Committee have been

constituted with clear written termsof reference. The Board Committeesare actively engaged and play animportant role in ensuring goodcorporate governance. The termsof reference of the Audit Committee,the Nominating Committee and theRemuneration Committee wererecently amended following theissuance of the Code of CorporateGovernance 20122 (the 2012 Code) andare disclosed in the Appendix to thisreport at pages 45 to 47.

The Board meets four times a yearand as warranted by particularcircumstances to discuss and reviewthe Trustee-Managers key activities,including its business strategiesand policies for KGT, proposedacquisitions and disposals, the annualbudget, review the performanceof the business and the financialperformance of KGT and the Trustee-Manager. The Board also reviews andapproves the release of the quarterly,half-yearly and full-year results.In addition, the Board reviews the risksto the assets of KGT, and acts upon anycomments from the auditors of KGT.

The Trustee-Managers Articles ofAssociation permit Board meetingsto be held by way of conference bytelephone or any other electronicmeans of communication by whichall persons participating are able,contemporaneously, to hear and beheard by all other participants.


1 The Code of Corporate Governance 2005 issued by the Ministry of Finance on 14 July 2005.2 The Code of Corporate Governance 2012 issued by the Monetary Authority of Singapore on 2 May 2012.

BoardMeetings

AuditCommittee Meetings

NominatingCommittee Meetings

RemunerationCommittee Meetings

Conflicts ResolutionCommittee Meetings

Khor Poh Hwa 6 - 2 - -

Alan Ow Soon Sian 6 4 2 - -

Paul Ma Kah Woh 6 4 2 - 1

Quek Soo Hoon 6 4 - 2 1

Thio Shen Yi 5 - - 2 1

Teo Soon Hoe 6 - - 2 -

Tay Lim Heng 2 - - - -

No. of Meetings Held in FY 2012 6 4 2 2 1

Board and Board committee meetings for FY2012:

31Corporate Governance


30/88

The current Directors appointmentsand details of membership on Boardcommittees, number of Board andBoard committee meetings held forFY2012 between 1 January 2012 and31 December 2012, as well as theattendance of each Board memberat these meetings, are disclosedin the tables on pages 31 to 32.

The Trustee-Manager has adopteda set of internal guidelines whichsets out the financial authority limitsfor investment/business acquisition,operating/capital expenditure,leasing, disposal of assets andvarious corporate matters thatrequire the approval of the Boardand Sub-Trust Boards. Appropriatedelegations of authority and approvalsub-limits are also provided atmanagement level to facilitateoperational efficiency.

A formal letter is sent to newly-appointed Directors upon theirappointment explaining their dutiesand obligations as director. Changesto laws, regulations, policies,accounting standards and industry-related matters are monitoredclosely. Where the changes have animportant and significant bearing onKGT and its disclosure obligations,the Directors are briefed eitherduring Board meetings, at specially

convened sessions or via circulationof Board papers. The Directorsare also provided with continuingeducation in areas such as directors

duties and responsibilities, corporategovernance, changes in financialreporting standards, insider trading,changes in the Companies Act andindustry-related matters, so as toupdate and refresh them on mattersthat affect or may enhance theirperformance as Board or Boardcommittee members. By way of an

example, in FY2012, some Directorsattended talks on topics relating tothe 2012 Code, the Airocean appealjudgment in relation to directorsdisclosure obligations under theSecurities and Futures Act and theListing Manual of the SingaporeExchange Securities Trading Limited(SGX), prohibition against insiderttrading, risk governance andmanagement, among others.

BOARD COMPOSITION AND GUIDANCEPrinciple 02:

Strong and independent element

on the Board

Presently, the Board consists ofseven members, four of whom areindependent non-executive Directors.The other directors are non-independent non-executive Directors.The Chairman of the Board isMr Khor Poh Hwa, who is a non-executive non-independent Director.

The composition of the Board

complies with the BTR andcomprises:a. at least a majority of the

directors who are independent

from management and businessrelationships with theTrustee-Manager;

b. at least one-third of the directorswho are independent frommanagement and businessrelationships with the Trustee-Manager and from everysubstantial shareholder of the

Trustee-Manager; andc. at least a majority of the directors

who are independent from anysingle substantial shareholderof the Trustee-Manager.

To be considered to be independentfrom management and businessrelationships with the Trustee-Manager (whether or not the Trustee-Manager is acting for or on behalf ofKGT), a Director must not have any:a. management relationships with

the Trustee-Manager or withany of its subsidiaries; and

b. business relationships withthe Trustee-Manager or withany of its related corporations,or with any officer of theTrustee-Manager or any ofits related corporations,

that could interfere with the exerciseof his independent judgment withregard to the interests of all theUnitholders as a whole.

To be considered to be independent

from a substantial shareholder ofthe Trustee-Manager, a Directormust not be a substantial shareholderof the Trustee-Manager and is


BoardMembership

AuditCommittee

NominatingCommittee

RemunerationCommittee

ConflictsResolutionCommittee

Khor Poh Hwa Non-Executive andNon-Independent Chairman Member

Alan Ow Soon Sian Non-Executive Independent Member Chairman

Paul Ma Kah Woh Non-Executive Independent Chairman Member Member

Quek Soo Hoon Non-Executive Independent Member Member Chairman

Thio Shen Yi Non-Executive Independent Chairman Member

Teo Soon Hoe Non-Executive andNon-Independent Member

Tay Lim Heng

Non-Executive and

Non-Independent

Nature of current Directors appointments on the Board and the details of their membership on Board Committees:



31/88

not connected to the substantial

shareholder of the Trustee-Manager.

The Trustee-Manager is wholly-ownedby Keppel Integrated EngineeringLimited (KIE), a wholly-ownedsubsidiary of Keppel CorporationLimited (Keppel Corporation).Keppel Corporation and its relatedand associated companies haveextensive business activities inoffshore and marine, infrastructure,property sectors and investments.Temasek Holdings (Private) Limited

(Temasek), by virtue of their interestin Keppel Corporation, is deemeda substantial shareholder of theTrustee-Manager.

Following a review, the Board hasdetermined that:a. Mr Khor Poh Hwa is not

considered to be independentfrom Keppel Corporation.Mr Khor is a director of a numberof subsidiaries or associatedcompanies of Keppel Corporation.According to BTR criteria, Mr Khor

is deemed to be connected toKeppel Corporation.

b. although Mr Alan Ow Soon Sianis not considered to be independentfrom Keppel Corporation accordingto the definition in the BTR,nonetheless, the Board determinedthat Mr Ow is independentfrom Keppel Corporation andis therefore an independentDirector. Under the BTR, adirector is considered not to beindependent from a substantialshareholder of the Trustee-Manager if he is connected to thatsubstantial shareholder. Mr Owis an independent director of M1Limited, which is an associatedcompany of Keppel Corporation.According to the BTR, Mr Ow isconnected to Keppel Corporation.After review, the Board is satisfiedthat the connection to KeppelCorporation will not interfere withMr Ows independent judgmentand ability to act with regard tothe interests of all the Unitholders

as a whole. The Board reached itsconclusion on the basis that Mr Owhas shown independent judgmentin his deliberation of the interests

of KGT. Mr Ows participation in

the Board will benefit KGT givenhis expertise. Mr Ow will abstainfrom the Boards decisions inrelation to any matter whichinvolves M1 Limited in which he isan independent director.

c. although Mr Paul Ma Kah Wohis not considered to beindependent from Temasekaccording to the definitionin the BTR, nonetheless, theBoard determined that Mr Mais independent from Temasek

and is therefore an independentDirector. Under the BTR, adirector is considered not to beindependent from a substantialshareholder of the Trustee-Manager if he is connected to thatsubstantial shareholder. Mr Mais an independent director ofMapletree Investments Pte Ltd,SMRT Corporation Ltd andNucleus Connect Pte Ltd and adirector of Mapletree LogisticsTrust Management Ltd, which aresubsidiaries of Temasek, which is

deemed a substantial shareholderof the Trustee-Manager.According to the BTR, Mr Ma isconnected to Temasek. Afterreview, the Board is satisfiedthat the connection to Temasekwill not interfere with Mr Masindependent judgment and abilityto act with regard to the interestsof all the Unitholders as a whole.The Board reached its conclusionon the basis that Mr Ma hasshown independent judgment inhis deliberation of the interestsof KGT. Mr Mas participation inthe Board will benefit KGT givenhis expertise. Mr Ma will abstainfrom the Boards decisions inrelation to any matter whichinvolves Mapletree InvestmentsPte Ltd, Mapletree LogisticsTrust Management Ltd, SMRTCorporation Ltd and NucleusConnect Pte Ltd.

d. although Ms Quek Soo Hoon isconsidered to have a businessrelationship with the Trustee-

Manager and its relatedcorporations according to thedefinition used in the BTR,nonetheless, the Board

33Corporate Governance


32/88

of the carried interest benefit

is small, it is not contemplatedthat the duties required to beperformed by Ms Quek as aDirector of the Trustee-Managerwould be compromised. Ms Quek,in the course of her service asa Director to the Trustee-Manager, has shown independentjudgment in her deliberation ofthe interests of KGT. Ms Queksparticipation in the Board willbenefit KGT given her expertise.Ms Quek will abstain from the

Boards decisions in relation toany matter which involves theFund Manager in which she isan operating partner.

e. although Mr Thio Shen Yi isconsidered to have a businessrelationship with the Trustee-Manager and its relatedcorporations according tothe definition used in theBTR, nonetheless, the Boarddetermined that Mr Thio isindependent from businessrelationships with the Trustee-

Manager and/or its relatedcorporations and is therefore anindependent Director. Mr Thiois a joint managing director ofTSMP Law Corporation, a lawfirm. TSMP Law Corporation wasinstructed by Keppel Sea ScanPte Ltd in a simple debt recoveryclaim in 2011 in which Mr Thiowas not personally involved. Thefees charged were nominal anddid not exceed $1,000. Any actualfinancial benefit to Mr Thio wasnegligible. After review, the Boardis satisfied that the businessrelationship described abovewill not interfere with Mr Thiosindependent judgment and abilityto act with regard to the interestsof all the Unitholders as a whole.The Board reached its conclusionon the basis that while Mr Thioand the law firm in which heis a director may provide legalservices to the Trustee-Managerand its related corporations, themeasures described later in this

paragraph will ensure thatMr Thio will not be involved in anydecision-making process whichwill involve the appointment of

TSMP Law Corporation. There will

thus be no interference with hisexercise of independent judgmentand his ability to act with regardto the interests of Unitholders asa whole. Mr Thio, in the courseof his service as a director to theTrustee-Manager, has shownindependent judgment in hisdeliberation of the interests ofKGT. Mr Thios participation inthe Board will benefit KGT givenhis expertise. Mr Thio will abstainfrom the Boards decisions in

relation to the choice of legalcounsel for KGT, where TSMPLaw Corporation is involved,for various matters. Regardlessof whether Mr Thio is a Directorof the Trustee-Manager, theTrustee-Manager will appointits legal counsel based on theirexpertise and decide on their feesbased on market rates.

f. Mr Teo Soon Hoe is notconsidered to be independentfrom Keppel Corporation.Mr Teo is a Senior Executive

Director of Keppel Corporation.He is the Chairman ofKeppel Telecommunications &Transportation Ltd, M1 Limitedand Keppel Philippines HoldingInc. In addition, Mr Teo isa director of several othercompanies within theKeppel Group, includingKeppel Offshore & Marine Ltd,Keppel Energy Pte Ltd, SingaporeTianjin Eco-City InvestmentHoldings Pte Ltd andk1 Ventures Limited.

g. BG(NS) Tay Lim Heng is notconsidered to be independentfrom Keppel Corporation.BG(NS) Tay is the Chief ExecutiveOfficer of KIE. He is also Head,Sustainable Development,of Keppel Group.

The Board, in concurrence with theNominating Committee, is of theview that, taking into account thenature and scope of the operationsof KGT, the requirements of KGTs

businesses and the concern of alarge board resulting in an unwieldydecision making process, the Boardshould consist of approximately


determined that Ms Quek is

independent from businessrelationships with the Trustee-Manager and/or its relatedcorporations and is thereforean independent Director.Ms Quek Soo Hoon is currentlyan operating partner of a fundmanager, iGlobe Partners (II)Pte Ltd (Fund Manager),that manages a fund thatKeppel Corporation (through awholly owned subsidiary) investedinto in 2010. In accordance with

the BTR, Ms Quek is deemedto have a business relationshipwith a related corporation of theTrustee-Manager. After review,the Board is satisfied that thebusiness relationship describedabove will not interfere withMs Queks independent judgmentand ability to act with regardto the interests of all theUnitholders as a whole. TheBoard reached its conclusion onthe basis that Ms Quek did notderive any direct benefit from

Keppel Corporations investment.The Fund Manager did not havedirect interest in the investmentinvested by Keppel Corporationin the fund. Keppel Corporationhad not paid and will not bepaying any monies to theFund Manager directly. Ms Queksbenefits and interest as anoperating partner of theFund Manager are contingenton many other factors andnot solely dependent onKeppel Corporations investment,which is small. Any benefit thatMs Quek might receive is paidby the Fund Manager and notby Keppel Corporation and thebenefit that Ms Quek mightreceive is also not determinedby the Trustee-Manager or anyof its related corporations.As the benefit that Ms Quekmight receive (which is dependenton the performance of the fund)is not determined by the Trustee-Manager or any of its related

corporations, decisions made bythe Trustee-Manager or any of itsrelated corporations has no directeffect on the same, and her share



33/88

seven members. The Board

currently comprises majorityindependent directors with a totalof seven directors of whom four areindependent. No individual or smallgroup of individuals dominate theBoards decision making.

The nature of the Directorsappointment on the Board anddetails of their membership onBoard Committees are set outon page 32 herein.

The Board and management fullyappreciate that fundamental to goodcorporate governance is an effectiveand robust Board whose membersengage in open and constructivedebate and challenge managementon its assumptions and proposals. Forthis to happen, the Board, in particular,the non-executive Directors, are keptwell informed of KGTs businesses andaffairs and are knowledgeable aboutthe industry in which the businessesoperate. For the current financialyear, the non-executive Directors have

constructively challenged and helpedto develop proposals on strategyand reviewed the performance ofmanagement. The non-executiveDirectors are well supported byaccurate, complete and timelyinformation, have unrestricted accessto management, and have sufficienttime and resources to discharge theiroversight function effectively.

CHAIRMAN ANDCHIEF EXECUTIVE OFFICERPrinciple 03:

Clear division of responsibilities

for the working of the Board and

the executive responsibility of the

companys business to ensure a

balance of power and authority

The positions of Chairman and ChiefExecutive Officer (CEO) are heldby two individuals to ensure anappropriate balance of power,increased accountability and greatercapacity of the Board for independentdecision making. The Chairman and

the CEO are not related to each other.

The Chairman leads the Board inworking together with management

with integrity, competency and in

an effective manner to addressstrategy, business operations andenterprise risk issues, and facilitatesthe effective contribution of the non-executive Directors and the Board asa whole. With the assistance of thecompany secretaries, the Chairmanalso sets and approves the agendaof all Board meetings.

The Chairman monitors the flowof information from managementto the Board to ensure that material

information is provided in a timelymanner to the Board. He alsoencourages constructive relationsbetween the Board and management.

The Chairman ensures effectivecommunication with Unitholders.He also takes a leading role inpromoting high standards ofcorporate governance with thefull support of the Directorsand management.

The CEO is responsible for working

with the Board to determine thestrategy for KGT. The CEO alsoworks with other members of theTrustee-Managers managementteam to ensure that KGT is operatedin accordance with the statedinvestment strategy of the Trustee-Manager. He is also responsiblefor the strategic planning anddevelopment of KGT.

The clear separation of roles ofthe Chairman and the CEO providesa heal