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2000. In addition to the primary US and Asia sales, year2000 saw increased sales from both Europe and SouthAmerica as a result of the Aerospace sector’s marketingefforts to penetrate these markets.The sector alsocontinued to invest in new maintenance capabilities andengineering developments to generate new services andproducts for the future.ELECTRONICSIn year 2000, the region continued in its recovery fromthe 1997 Asian economic crisis. New prospects unfoldedand the Electronics sector was able to secure new ordersfrom China, Hong Kong,Taiwan and Thailand. Locally,our government continued to invest in infrastructure andthis has led to the sector securing a number of newprojects from the Land Transport Authority.LAND SYSTEMSThe acquisition of FIPL added to the strong growth ofthe existing automotive business.While the sectorcontinues to be strong in its traditional markets,international marketing activities have also been steppedup, especially in Africa, Middle East and Europe.Thesector has also started to market aggressively intoAmerica with its bid for the US Army’s InterimArmoured Vehicle (IAV) program.To further enhance thecapabilities in the military business, the sector hascontinued to invest in collaborative partnerships as wellas companies with dual-purpose technologies. STARaccident repairs achieved higher revenue as a result of thesuccessful launch of new satellite centres and newinitiatives for services that provide the sector with acompetitive advantage.MARINEThough charter rates for containerships, oil tankers andoffshore support vessels/anchor handling tugs declinedmarginally since 3Q1999, the charter rates remainedstrong.The freight rates have risen in tandem with thehigher oil price. Strong demand for containerships, oiltankers and offshore support vessels/anchor handlingtugs is expected to continue through 2001 and this willlead to higher demand for shiprepair.5. PROSPECTSWith a firm order book of S$5.1 billion, of which S$1.8billion will be delivered in 2001, the Directors expectthe performance in 2001 to be better than 2000. For1Q2001, the sales and profit are expected to be lowerthan 4Q2000.AEROSPACEFull year profit for the Aerospace sector is expected to bebetter. 1Q2001 is expected to be weaker than 4Q2000primarily due to the high deliveries by SASCO in4Q2000 and completion of project milestones in thatquarter. Additional hangar capacities will come on streamboth locally and in the US for the Aerospace sector in1Q2001.With the successful conversion of the first DC-10 PTF aircraft by SASCO, a second aircraft is expectedto be inducted in February 2001. On the engineeringfront, the design and prototyping phase of the Turkish AirForce (TuAF) F5 upgrade programme is expected to becompleted in 2001.The B757 PTF programme withBoeing would enter the production phase in 2001.ELECTRONICSOverall, the performance for 2001 is expected to bebetter than that of 2000. However, sales and profit in1Q2001 are expected to be lower than those in 4Q2000as the values of the project milestones that would becompleted for Ministry of Home Affairs, Land TransportAuthority and various defence contracts are lower. Foryear 2001, Electronics sector will continue to enhance itssolutions through research and development and strategicinvestment in Infocomm technologies as well as strengthenits marketing channels.LAND SYSTEMSTurnover and profit are expected to be better in 2001compared to 2000.While turnover is expected to bemaintained, profit is likely to be lower in 1Q2001compared to 4Q2000 due to product mix andcontractual delivery schedules.MARINEOverall, the performance of Marine sector is expectedto be marginally lower than 2000. Sales in 1Q2001 isexpected to be higher than 4Q2000 due mainly to thedelivery of the last of the series of four LSTs andvariation orders.With the delivery of only one LST in2001, both sales and operating profit of Shipbuilding areexpected to be lower. However, the maturity of somefunds under management will contribute to the fullyear results.DIRECTORS’ REPORT31 DECEMBER 2000(Currency - Singapore dollars unless otherwise stated)We, the undersigned directors, on behalf of all thedirectors of the Company, submit this annual report tothe members together with the audited financialstatements of the Group and of the Company for thefinancial year ended 31 December 2000.DIRECTORSThe directors of the Company in office at the date of thisreport are as follows:Ho Ching (Chairman)Boon Swan Foo (Deputy Chairman and CEO)Ng Kee ChoeTan Guong ChingPeter Ho Hak EanMG Lim Chuan Poh (appointed on 1 April 2000)Professor Lui Pao ChuenRESULTS FOR THE FINANCIAL YEARResults of the Group and of the Company for thefinancial year are as follows:Dr Philip Nalliah Pillai (appointed on 1 April 2000)Philip Tan Yuen FahWinston Tan Tien HinLucien Wong Yuen KuaiPRINCIPAL ACTIVITIESThe principal activities of the Company are those of aninvestment holding company and the provision ofengineering and related services.The principal activitiesof the subsidiaries are set out in Note 9 to the financialstatements.There were no significant changes in suchactivities during the financial year, except for newlyincorporated and acquired subsidiaries.EMPLOYEESThe total number of employees in the Group at the endof the financial year was 10,325 (1999: 8,187).GROUP COMPANY$’000 $’000Profit after taxation 291,496 287,468Minority interests (3,358) –Profit attributable to the shareholders of the Company 288,138 287,468Unappropriated profit brought forward 418,543 101,475Profit available for appropriation 706,681 388,943Goodwill realised upon disposal of associated company 3,992 –Additional final dividend paid in respect of 1999 due to the issue of sharesunder ST Engg Share Option Scheme before books closure date (1,439) (1,439)Proposed final dividend of 2.5 cents per share less tax at 25.5% (53,188) (53,188)Proposed special dividend of 5.5 cents per share less tax at 25.5% (117,013) (117,013)Proposed special tax exempt dividend of 1.5 cents per share (42,836) (42,836)Goodwill on acquisition of subsidiary written off (22,531) –Unappropriated profit carried forward 473,666 174,467100 • visiondirectors’ report • 101