Contents 目 录 Financial Highlights CAO at A Glance International Reach Sustainable Business Model Vision Group Structure Growing Strength to Strength C

Transcription

1 GROWTH STRENGTH RESILIENCE Annual Report 2015

2 Contents 目 录 Financial Highlights CAO at A Glance International Reach Sustainable Business Model Vision Group Structure Growing Strength to Strength Chairman s Statement Board of Directors Corporate Information Strengthened Through the Seasons Chief Executive Officer s Strategic Report CEO s Message Strategic Risks Review Audit & Internal Control Operations Review Financial Review Investor Relations Senior Management Resilient Through the Times Risk Management Human Capital Corporate Social Responsibility Statement of Corporate Governance Financial Statements Supplementary Information Statistics of Shareholdings Notice of Annual General Meeting Proxy Form 业 绩 亮 点 公 司 简 介 国 际 触 角 可 持 续 的 业 务 模 式 愿 景 集 团 结 构 图 茁 壮 成 长 董 事 长 致 辞 董 事 会 公 司 信 息 坚 韧 不 拔 首 席 执 行 官 战 略 报 告 首 席 执 行 官 致 辞 战 略 风 险 回 顾 审 计 与 内 部 控 制 经 营 概 况 财 务 业 绩 投 资 者 关 系 高 级 管 理 层 欣 欣 向 荣 风 险 管 理 人 力 资 源 企 业 社 会 责 任 公 司 治 理 报 告 财 务 报 告 补 充 信 息 持 股 统 计 常 年 股 东 大 会 通 知 代 理 表 格 CAO s Annual Report 2015 aims to give readers an account of the Group s integrated approach to value creation and sustainability development. Our report provides an overview of key activities, events and results in 2015, together with commentary on the Group s performance in the year and our priorities as we move forward to realise our strategic vision.

3 Annual Report Financial Highlights 业 绩 亮 点 GROWTH STRENGTH RESILIENCE 坚 韧 奋 进 Strongly-rooted, upright, fastgrowing, resilient. Bamboos are a picture of vitality and solidity, making them a valuable and widely-used perennial evergreen plant variety in many regions and cultures. Emerging from the ground in full diameter, with a new shoot growing vertically until the whole stem reaches its full height, it then branches out, hardens, and strengthens further. Withstanding strong winds, it graciously bends and then vigorously goes back to its upright position, nimble yet not losing its ground. These same qualities have been exhibited by China Aviation Oil over the years. A balance of adaptibility and durability that enables the Group to stand and grow steadily as evidenced by its strong performance despite the harsh market conditions in Total Supply and Trading Volume (million tonnes) 总 业 务 量 ( 百 万 吨 ) 20.2 million tonnes Revenue (US$ billion) 营 业 额 ( 十 亿 美 元 ) US$9.0 billion Net Profit (US$ million) 净 利 润 ( 百 万 美 元 ) US$61.3 million Return on Equity 净 资 产 回 报 率 10.7% Return on Assets 资 产 回 报 率 5.7% Net Asset Value/Share 每 股 净 资 产 值 ( 美 分 ) US68.90

4 2 China Aviation Oil (Singapore) Corporation Ltd CAO at A Glance China Aviation Oil (Singapore) Corporation Ltd ( CAO or the Group ), incorporated in Singapore on 26 May 1993, and listed on the mainboard of the Singapore Exchange Securities Trading Limited since 2001, is the largest physical jet fuel trader in the Asia Pacific region and the sole supplier of imported jet fuel to the civil aviation industry of the People s Republic of China ( PRC ). CAO and its wholly owned subsidiaries, China Aviation Oil (Hong Kong) Company Limited ( CAOHK ) and North American Fuel Corporation ( NAFCO ) supply jet fuel to airline companies at airports outside the PRC, including locations in the Asia Pacific, North America, Europe and the Middle East. CAO and its wholly owned subsidiaries, China Aviation Oil (Europe) Limited ( CAOE ) and NAFCO, also engages in international trading of jet fuel and other oil products. ASSOCIATES UNDER THE GROUP The Group also owns investments in oil-related businesses that are synergetic to its supply and trading activities, with a portfolio of assets including storage, pipelines and airport refuelling facilities. The associated companies including Shanghai Pudong International Airport Aviation Fuel Supply Company Ltd ( SPIA ), China National Aviation Fuel TSN-PEK Pipeline Transportation Corporation Ltd ( TSN-PEKCL ), China Aviation Oil Xinyuan Petrochemicals Co., Ltd ( Xinyuan ), Oilhub Korea Yeosu Co., Ltd ( OKYC ) and CNAF Hong Kong Refuelling Limited ( CNAF HKR ) cover a broad spectrum of businesses and form integral parts of the Group s integrated value chain. OUR KEY SHAREHOLDERS China National Aviation Fuel Group Corporation ( CNAF ), the single largest shareholder of CAO, holds 51.31% of the total issued shares of CAO (excluding treasury shares). As a state-owned enterprise, CNAF is the largest aviation transportation logistics services provider in the PRC, providing aviation fuel distribution, storage, transportation and refuelling services at over 190 PRC airports. BP Investments Asia Limited, a subsidiary of oil major, BP Plc, is a strategic investor of CAO, and holds 20.17% of the total issued shares of CAO (excluding treasury shares). OUR BUSINESSES Jet Fuel Supply & Trading CAO is the largest physical jet fuel trader in Asia Pacific and the sole importer of jet fuel into the PRC. The Group supplies jet fuel at 17 international airports across China, including major PRC gateways such as Beijing Capital International Airport, Shanghai Pudong and Hongqiao International Airports and Guangzhou Baiyun International Airport. The Group also markets and supplies jet fuel to airline companies at 38 international airports outside the PRC, covering Asia Pacific, North America, Europe and the Middle East. Capitalising on the growing international air transportation market, the Group will continue to focus on growing and expanding its businesses into new markets, underpinned by robust strategies to create a strong foundation for future growth. Trading of Other Oil Products CAO will continue to diversify its revenue streams and expand its scale of business by building up supply and trading businesses in other oil products, which include fuel oil, gas oil and aviation gas ( avgas ). CAO has entrenched its market presence as an active trader of these oil products in the Asia Pacific market and will continue to work at building and optimising structural advantages in these products. Investments in Oil-related Assets CAO continuously seeks to create value and deliver longterm growth through investments and acquisitions in oilrelated assets that are synergetic to its core businesses to achieve vertical integration of its value chain. The Group currently holds equity stakes in: Shanghai Pudong International Airport Aviation Fuel Supply Company Ltd ( SPIA ) - (33% equity stake) China National Aviation Fuel TSN-PEK Pipeline Transportation Corporation Ltd ( TSN-PEKCL ) - (49% equity stake) China Aviation Oil Xinyuan Petrochemicals Co., Ltd ( Xinyuan ) - (39% equity stake) Oilhub Korea Yeosu Co., Ltd ( OKYC ) - (26% equity stake) CNAF Hong Kong Refuelling Limited ( CNAF HKR ) - (39% controlling equity stake)

5 Annual Report 公 司 简 介 中 国 航 油 ( 新 加 坡 ) 股 份 有 限 公 司 ( 简 称 CAO 或 集 团 ) 于 1993 年 5 月 26 日 在 新 加 坡 注 册 成 立,2001 年 在 新 加 坡 证 券 交 易 所 主 板 上 市 CAO 是 亚 太 地 区 最 大 的 航 油 实 货 贸 易 商 和 中 国 独 家 航 油 进 口 商 CAO 及 其 全 资 子 公 司 中 国 航 油 ( 香 港 ) 有 限 公 司 ( 香 港 公 司 ) 北 美 航 油 有 限 公 司 ( 北 美 公 司 ) 在 中 国 境 外 的 机 场 向 航 空 公 司 供 应 航 油, 包 括 亚 太 北 美 欧 洲 和 中 东 CAO 与 全 资 子 公 司 中 国 航 油 ( 欧 洲 ) 有 限 公 司 ( 欧 洲 公 司 ) 和 北 美 公 司 进 行 航 油 和 其 他 油 品 的 国 际 贸 易 联 营 公 司 联 营 公 司 的 油 品 相 关 资 产 ( 包 括 储 罐 管 线 机 场 加 注 设 备 ) 可 以 为 集 团 的 供 应 贸 易 业 务 提 供 协 同 性, 包 括 上 海 浦 东 国 际 机 场 航 空 油 料 有 限 责 任 公 司 ( 浦 东 航 油 ) 中 国 航 油 集 团 津 京 管 道 运 输 有 限 责 任 公 司 ( 管 输 公 司 ) 中 国 航 油 集 团 新 源 石 化 有 限 公 司 ( 新 源 公 司 ) 韩 国 丽 水 枢 纽 油 库 有 限 公 司 ( OKYC ) 和 中 国 航 油 香 港 供 油 有 限 公 司 ( CNAF HKR ), 资 产 遍 布 多 个 业 务 板 块, 形 成 集 团 重 要 的 一 体 化 价 值 链 主 要 股 东 CAO 最 大 的 股 东 是 中 国 航 空 油 料 集 团 公 司 ( 简 称 CNAF ),CNAF 持 有 CAO 全 部 发 行 股 票 ( 不 包 含 库 存 股 ) 的 51.31%, 是 一 家 中 国 国 有 企 业, 也 是 中 国 最 大 的 航 空 运 输 服 务 保 障 企 业, 为 中 国 超 过 190 家 机 场 提 供 航 空 油 料 的 分 配 存 储 运 输 和 加 注 服 务 石 油 巨 头 BP 的 子 公 司 BP 投 资 亚 洲 有 限 公 司 是 CAO 的 战 略 投 资 者, 持 有 CAO 全 部 发 行 股 票 ( 不 包 含 库 存 股 ) 的 20.17% Into-plane refuelling operations at Shanghai Pudong International Airport 在 上 海 浦 东 国 际 机 场 为 飞 机 加 注 业 务 概 况 航 油 供 应 与 贸 易 CAO 是 亚 太 地 区 最 大 的 航 油 实 货 贸 易 商 和 中 国 独 家 航 油 进 口 商 集 团 向 分 布 在 中 国 各 地 的 17 家 国 际 机 场 供 应 航 油, 包 括 中 国 主 要 枢 纽 机 场, 如 北 京 首 都 国 际 机 场 上 海 浦 东 和 虹 桥 国 际 机 场 以 及 广 州 白 云 国 际 机 场 等 CAO 集 团 也 在 中 国 大 陆 以 外 的 亚 太 北 美 欧 洲 和 中 东 的 38 个 国 际 机 场 向 航 空 公 司 营 销 并 供 应 航 油 在 全 球 航 空 运 输 市 场 快 速 增 长 的 推 动 下, 集 团 会 继 续 专 注 拓 展 和 发 展 新 市 场, 其 稳 健 的 战 略 为 未 来 的 发 展 打 下 了 坚 实 的 基 础 其 他 油 品 贸 易 业 务 公 司 会 继 续 通 过 多 元 化 的 供 应 与 贸 易 业 务 拓 展 收 入 来 源, 提 升 业 务 规 模 我 们 的 其 他 贸 易 品 种 包 括 燃 料 油 柴 油 和 航 空 汽 油 ( 航 汽 ) CAO 已 在 亚 太 地 区 成 为 这 些 油 品 种 类 的 活 跃 贸 易 商, 也 会 继 续 优 化 和 打 造 其 他 贸 易 产 品 的 结 构 性 优 势 油 品 相 关 实 业 投 资 CAO 通 过 投 资 与 收 购 与 核 心 业 务 具 有 协 同 性 的 油 品 相 关 实 业 资 产, 纵 向 整 合 公 司 价 值 链, 积 极 创 造 价 值, 实 现 可 持 续 增 长 CAO 集 团 的 现 有 投 资 包 括 : 上 海 浦 东 国 际 机 场 航 空 油 料 有 限 责 任 公 司 ( 浦 东 航 油 ) (CAO 持 股 33%) 中 国 航 油 集 团 津 京 管 道 运 输 有 限 责 任 公 司 ( 管 输 公 司 ) (CAO 持 股 49%) 中 国 航 油 集 团 新 源 石 化 有 限 公 司 ( 新 源 公 司 ) (CAO 持 股 39%) 韩 国 丽 水 枢 纽 油 库 有 限 公 司 ( OKYC ) (CAO 持 股 26%) 中 国 航 油 香 港 供 油 有 限 公 司 ( CNAF HKR ) ( 香 港 公 司 持 股 39%, 控 股 )

6 4 China Aviation Oil (Singapore) Corporation Ltd International Reach 国 际 触 角 United States CAO Headquarter & Subsidiaries CAO 总 部 及 其 子 公 司 Supply & Trading Network 供 应 与 贸 易 网 络 Diversified Geographic Base 地 理 多 元 化 5% South Korea 韩 国 9% Singapore 新 加 坡 FY2010 6% Other Regions 其 他 地 区 US$5.5 billion 55 亿 美 元 80% China 中 国 52.5% China 中 国 Group Revenue by Geographical Locations 总 销 售 收 入 ( 按 地 区 划 分 ) FY % 6% South Korea USA 韩 国 美 国 US$9.0 billion 90 亿 美 元 3.5% Australia 澳 大 利 亚 3.4% Other Regions 其 他 地 区 10.3% Hong Kong 香 港 3.4% Indonesia 印 尼 16.7% Singapore 新 加 坡 0.1% Middle East 中 东 2.8% Europe 欧 洲 0.7% Malaysia 马 来 西 亚

7 Annual Report Europe China Japan Middle East India Thailand Malaysia Vietnam Singapore Indonesia Diversified Product Base 产 品 多 元 化 8, , , , , , , , ,978.0 US$ millions US$ millions Revenue - Middle Distillates 收 入 - 中 馏 分 Revenue - Other Oil Products 收 入 - 其 他 油 品

8 6 China Aviation Oil (Singapore) Corporation Ltd Sustainable Business Model 可 持 续 的 业 务 模 式 OUR VISION To be a constantly innovating global top-tier integrated transportation fuels provider. International Oil Markets 国 际 油 品 市 场 We procure internationally and deliver cargoes to customers globally. 我 们 在 全 球 范 围 内 采 购 货 物, 交 付 至 不 同 区 域 客 户 的 手 中 Procurement 采 购 Optimisation & Trading 优 化 与 贸 易 At CAO, we strive to integrate our supply and trading activities, leveraging on our increasing scale and market presence to enhance the profitability of the Group. CAO 致 力 于 供 应 与 贸 易 一 体 化, 利 用 不 断 扩 大 的 业 务 规 模 和 市 场 占 有 率, 加 强 集 团 的 盈 利 能 力 Secure Resources 锁 定 资 源 Optimise Logistics 优 化 物 流 Storage 储 罐 Enhancing Integrated Supply Chain through Oil-related Asset Investments 通 过 实 业 投 资 强 化 一 体 化 供 应 链 Xinyuan 新 源 公 司 OKYC 韩 国 丽 水 枢 纽 油 库 有 限 公 司

9 Annual Report 愿 景 成 为 富 有 创 新 精 神 的 全 球 一 流 运 输 燃 料 一 体 化 方 案 提 供 商 Cargo Supply 供 给 货 物 End Customers 终 端 用 户 Aviation Marketing 航 油 销 售 Airlines 航 空 公 司 Marketing 市 场 营 销 Bunkering 船 用 燃 料 油 Ship Owners 船 东 Other Transporation Fuels 其 他 运 输 燃 料 End Users 终 端 用 户 Pipelines 管 线 Create Demand 创 造 需 求 Airport Refuelling Facilities 机 场 加 注 设 施 TSN - PEKCL 管 输 公 司 SPIA 浦 东 航 油 CNAF HKR 中 国 航 油 香 港 供 油 有 限 公 司

10 8 China Aviation Oil (Singapore) Corporation Ltd Group Structure (as at March 2016) 集 团 结 构 图 ( 截 至 2016 年 3 月 ) BP Investments Asia Limited BP 投 资 亚 洲 有 限 公 司 China National Aviation Fuel Group Corporation 中 国 航 空 油 料 集 团 公 司 Public 公 众 20.17%* 51.31%* 28.52%* China Aviation Oil (Singapore) Corporation Ltd 中 国 航 油 ( 新 加 坡 ) 股 份 有 限 公 司 100% 100% 100%* 100% China Aviation Oil (Hong Kong) Company Limited 中 国 航 油 ( 香 港 ) 有 限 公 司 North American Fuel Corporation 北 美 航 油 有 限 公 司 China Aviation Oil (Europe) Limited 中 国 航 油 ( 欧 洲 ) 有 限 公 司 CAOT Pte. Ltd. CAOT 私 人 有 限 公 司 39% CNAF Hong Kong Refuelling Limited 中 国 航 油 香 港 供 油 有 限 公 司 33% 49% 39% 26% Shanghai Pudong International Airport Aviation Fuel Supply Co Ltd 上 海 浦 东 国 际 机 场 航 空 油 料 有 限 责 任 公 司 China National Aviation Fuel TSN-PEK Pipeline Transportation Corp Ltd 中 国 航 油 集 团 津 京 管 道 运 输 有 限 责 任 公 司 China Aviation Oil Xinyuan Petrochemicals Co., Ltd 中 国 航 油 集 团 新 源 石 化 有 限 公 司 Oilhub Korea Yeosu Co., Ltd 韩 国 丽 水 枢 纽 油 库 有 限 公 司 100% 100% Shanghai Liyuan Industrial Co., Ltd 上 海 澧 源 实 业 有 限 公 司 Maoming Xinyuan Petrochemicals Co., Ltd 茂 名 市 新 源 石 化 有 限 公 司 * Excluding treasury shares 不 包 括 库 存 股

11

12 10 China Aviation Oil (Singapore) Corporation Ltd Chairman s Statement Dear Shareholders, I am deeply honoured to be appointed Chairman and Director of the CAO Group with effect from 11 August 2015, following the retirement of Mr Sun Li as Chairman of CNAF. The cumulative efforts of CAO s Board of Directors, past and present, its management team and all staff of CAO, have honed CAO into the international corporation that it is today. Collectively, we have realised the internationalisation of CAO, building the Group s integrated value chain which today spans across the Asia Pacific, Europe and USA. With the support of its shareholders, Board of Directors and the management, CAO has also resolved major issues from the past, leading CAO to the forefront of development as a Singaporelisted company. Today, CAO supplies to more than 30 international airports outside mainland China and is the largest physical trader of jet fuel in Asia Pacific. In recent years, CAO has gained several corporate honours such as the Singapore International 100 ranking in 2014 and 2015, achieving No 3 ranking in Overseas Turnover Excellence; winning Securities Investors Association Singapore s ( SIAS ) Most Transparent Company award for six consecutive years and more recently in 2015, winning Best Investor Relations (Gold) at Singapore Corporate Awards. CAO has also been named as one of the most valuable companies in the world in the Forbes Global 2000 ranking for three consecutive years. These many achievements of CAO were the outcome of management s dedication, effective control and operational effectiveness as well as the hard work of all employees led by CEO Mr Meng Fanqiu. CAO s increasingly solid corporate standing further attests to the support its parent company CNAF and strategic partner BP had put in to hone management expertise and leadership to spearhead, optimise and strengthen the Group s strategy and core competencies. Today, CAO boasts a strong balance sheet, robust enterprise risk management processes, a strong management team and heightened corporate governance practices which set the foundation for its sustainable growth going forward. These key corporate strengths developed over the years have heightened the Group s resilience to overcome the challenges ahead as our industry goes through difficult times and are the very building blocks which will ensure the continued success of CAO even as the Group becomes more proactive in creating value for itself as well as its stakeholders, ready to seize any opportunities that may arise and invest prudently, to take CAO to the next level PERFORMANCE Despite 2015 being a tumultuous year for the oil industry as a whole, CAO s performance in 2015 was creditable as the Group navigated across the dramatic changes of the global oil market structure during the year, and took advantage of market trends. In 2015, the Group continued to progress on the back of its global expansion strategy and while revenues declined from a year ago as a result of the depressed oil prices, profitability grew 24.7% over The macroeconomic environment in 2015 was extremely challenging with increased turbulence in global oil markets causing the oil trading environment to be very difficult. The Group swiftly responded to the changing oil market dynamics by fine-tuning its strategy, adjusted its business structure and focused on its core jet fuel supply and trading business. Total revenue of the Group for the 12 months ended 31 December 2015 ( FY2015 ) was US$9.0 billion, a decrease of 47.4% from a year ago due to the depressed oil prices even as total supply and trading volumes for jet fuel and other oil products remained relatively stable at 20.2 million tonnes for the year. Net profit attributable to shareholders grew 24.7% from FY2014 to US$61.3 million. Earnings per share were 7.12 US cents for FY2015 with a return on equity of 10.7% compared to 5.72 US cents and a return on equity of 9.1% a year ago. DIVIDEND POLICY In November 2015, the Board approved the adoption of a dividend policy based on a growth-based dividend payout formula in keeping with its corporate objective to enhance returns to shareholders. With effect from financial year 2015, CAO will declare dividends comprising 30% of CAO s annual consolidated net profits attributable to shareholders (one-tier, tax exempt) for each financial year, rounded to the nearest Singapore cent as part of CAO s commitment to allow shareholders to participate in its growth and enhance shareholder value. Given the financial results achieved for FY2015, the Board of Directors has therefore recommended that shareholders receive a first and final (one-tier, tax exempt) dividend of S$0.03 per share, compared to FY2014 dividend of S$0.02 per share. OUTLOOK CAO s competitive advantage in the Chinese civil aviation market is deeply entrenched and bodes us well. While China s economic growth may be growing at a slower pace, its civil aviation industry is expected to

13 Annual Report LIN WANLI Chairman 林 万 里 董 事 长

14 12 China Aviation Oil (Singapore) Corporation Ltd Chairman s Statement continue its rapid growth momentum through to 2030, with total turnover projected to reach 170 billion tonnekilometres by 2020 according to industry sources. Air passenger throughput in the PRC reached 400 million in 2015, an increase of about 11% year-on-year whilst total air transportation turnover volume for the same period reached 77.7 billion tonne-kilometres, an increase of 13.7% over China is set to be the world s largest civil aviation market by the 2030s and this burgeoning demand for jet fuel in China coupled with the dominant position of CAO s parent company, CNAF, in the Chinese civil aviation market will ensure that CAO s jet fuel business remains a key component of our Group s growth trajectory. Apart from the organic growth of our business in China, the Group s global supply and trading network comprising CAOHK, NAFCO, CAOE and the Group s associate companies across China and South Korea further strengthens CAO s market positioning as a leading jet fuel supplier and trader globally, on top of being the sole importer of jet fuel into China. This international network is the platform for CAO s expanded growth. CAO has leveraged on its parent company s competitive strengths in China to expand its international business outside of mainland China through its internationalisation and diversification strategies. These efforts have yielded commendable results for to date, the proportion of revenue from outside mainland China contributes 47.5% of the Group s revenue compared to 20% in As the PRC embarks on its development strategy of One Belt, One Road, connectivity and cooperation among countries will see the development of infrastructure projects such as roads, railways, ports and airports across the Silk Road Economic Belt and the 21 st Century Maritime Silk Road which together spans across three continents in Eurasia. CAO is well positioned to capture the impending opportunities and maintain a leading position in Asia Pacific through these new markets. By leveraging the consolidated scale of its international supply and trading network, CAO will also be able to increase its supply locations and volumes through partnership with airlines which will be supported by the burgeoning growth of the aviation industry in these emerging markets. At the same time, as the sole importer of jet fuel to the PRC, CAO has an important role to fulfil for the world s second largest aviation market which today consumes some 23.6 million metric tonnes of jet fuel annually. Jet fuel consumption in the PRC is set to sustain its double-digit growth and hit 39 million tonnes by This strong growth in the PRC aviation market is further expected to continue over the next two decades and will continue to augment CAO s business. Chinese Oil storage facilities at CNAF CNAF 储 罐 设 施 passenger traffic has more than quadrupled over the last 10 years and by the 2030s, the Chinese market is set to be the world s largest in terms of both domestic and outbound passenger traffic. With presence in more international airports outside China today, the Group is poised to benefit from this impending growth as well. BUILT ON FIRM FOUNDATIONS Corporate Governance has been the cornerstone of CAO s foundation and as the Group continues to globalise its operations, becomes ever more critical in its strategic and investment decisions. Having implemented and put in place robust risk management systems and internal control processes incorporating the key principles of corporate governance across all its global platforms, the trying business climate this past year only validates the importance of robust risk management and corporate governance practices across the Group. As the realities of the world economy unfold, the Group will grow its business buttressed by the necessary financial resources to meet the challenges ahead and be strengthened in the process. Indeed, the Group

15 Annual Report Into-plane refuelling services at a PRC airport 在 中 国 机 场 的 航 油 加 注 服 务 is in good stead to continue its international business agenda in line with China s development strategy of One Belt, One Road, riding on its firm foundations of sound corporate governance, robust risk management and a long-term corporate strategy. These business strategies, together with our deeply ingrained values of fairness, integrity, innovation and transparency, are the foundation to realise our vision to be an innovative, global top-tier, integrated transportation fuels provider. ACKNOWLEDGEMENTS AND APPRECIATION Even as 2016 looks increasingly set to be a year of subdued demand and lacklustre prospects, I am confident that CAO, led by its strong management team and armed with its robust balance sheet and sound principles of corporate governance, will successfully navigate through these tumultuous times. Today, CAO has grown into a multi-national enterprise with a multitalented team less than 10 years after the Group s restructuring. Together with the support of CNAF, our parent company and majority shareholder, CAO management team is ready to bring CAO to the next level as a reputable international oil supplier and trader with an integrated value chain. As I take over the helm from Mr Sun Li, I will endeavour to continue his good works and seek even greater development and success for CAO, furthering the Group s globalisation strategy. It is my wish to see the staff and management of CAO implement the strategic plans of the Board, further improve management capabilities, effective risk management, and achieve sustainable growth. CAO is CNAF s platform for international growth which will be even more prevalent as CNAF embarks on China s development strategy of One Belt, One Road. I would also like to express my heartfelt and sincere thanks to Mr Sun Li, CAO Board of Directors and all CAO employees for their efforts and contributions over the years! As we march onward to shape CAO s future with the combined efforts of all at CAO, under the leadership of its Board of Directors, I am confident that CAO will achieve even greater success as a global leading transportation fuels supply and trading company, fulfilling its role as the international arm of CNAF and playing a significant part in the growth and development of CNAF as well. On behalf of the Board and management, I wish to express my appreciation to all shareholders, business partners, investors and other stakeholders for your continued support and confidence in CAO as well as to the government agencies in China and Singapore for their counsel and guidance. With your continued support, I am confident that CAO will transform into a truly international enterprise and realise its 2020 vision to become a constantly innovating global top-tier integrated transportation fuels provider. LIN WANLI Chairman

16 14 China Aviation Oil (Singapore) Corporation Ltd 董 事 长 致 辞 各 位 股 东, 2015 年 8 月 11 日 起, 我 接 替 孙 立 先 生, 担 任 CAO 集 团 董 事 长 和 董 事, 对 此 我 深 表 荣 幸 CAO 今 日 得 以 成 为 国 际 化 企 业 要 归 功 于 CAO 往 届 及 本 届 董 事 会 管 理 层 和 全 体 员 工 的 努 力 我 们 携 手 初 步 实 现 了 CAO 的 全 球 化 发 展, 努 力 打 造 覆 盖 亚 太 欧 洲 和 美 国 的 一 体 化 价 值 链 在 股 东 的 支 持 下,CAO 董 事 会 和 管 理 层 一 同 解 决 了 重 大 历 史 遗 留 问 题, 将 CAO 打 造 成 为 新 加 坡 领 先 的 上 市 企 业 如 今,CAO 供 应 中 国 大 陆 以 外 超 过 30 个 国 际 机 场, 是 亚 太 区 最 大 的 航 油 实 货 贸 易 商 近 些 年 来,CAO 获 得 了 多 个 荣 誉 奖 项, 如 2014 年 入 榜 新 加 坡 100 家 国 际 企 业,2015 年 即 成 为 该 榜 单 排 名 第 3 的 公 司 ; 连 续 六 年 获 得 新 加 坡 证 券 投 资 者 协 会 最 透 明 公 司 奖,2015 年 更 是 获 得 新 加 坡 企 业 奖 的 最 佳 投 资 者 关 系 金 奖, 并 连 续 3 年 跻 身 福 布 斯 上 市 公 司 2000 强 CAO 获 得 的 这 些 认 可 来 源 于 管 理 层 的 付 出 有 效 的 控 制 高 效 运 营, 以 及 在 首 席 执 行 官 孟 繁 秋 先 生 领 导 下 的 所 有 员 工 的 辛 勤 工 作 CAO 声 誉 的 提 高, 证 明 了 在 母 公 司 中 国 航 空 油 料 集 团 公 司 和 大 股 东 BP 给 予 的 支 持 下, 管 理 层 磨 砺 经 验 和 领 导 力, 带 领 员 工 优 化 强 化 CAO 的 战 略 和 核 心 竞 争 力 如 今 的 CAO 有 着 健 康 的 资 产 负 债 表 稳 健 的 企 业 风 险 管 理 框 架 经 验 丰 富 的 管 理 团 队 和 高 水 准 的 公 司 治 理 实 践, 这 些 都 为 未 来 的 可 持 续 发 展 打 下 良 好 基 础 这 些 年 打 造 的 核 心 优 势 使 得 公 司 可 以 更 灵 活 应 对 行 业 困 境, 保 持 行 业 领 先 地 位 集 团 也 积 极 为 自 身 和 相 关 各 方 创 造 价 值, 把 握 有 利 时 机, 进 行 明 智 投 资, 取 得 跨 越 式 发 展 2015 年 经 营 业 绩 虽 然 2015 年 油 品 行 业 不 甚 乐 观, 但 CAO 顺 利 应 对 全 球 油 品 市 场 结 构 的 重 大 变 化, 成 功 把 握 了 市 场 走 势, 财 务 业 绩 可 圈 可 点 2015 年,CAO 在 全 球 业 务 拓 展 战 略 的 指 导 下 继 续 发 展, 虽 然 由 于 油 价 走 弱, 收 入 同 比 有 所 降 低, 但 利 润 同 比 增 长 24.7% 2015 年 的 宏 观 经 济 环 境 挑 战 重 重, 油 品 市 场 波 动 增 加, 油 品 贸 易 尤 其 艰 难 面 对 油 品 市 场 的 变 化, 集 团 反 应 迅 速, 完 善 策 略, 进 行 业 务 结 构 调 整, 强 化 核 心 主 业 航 油 供 应 与 贸 易 业 务 截 止 2015 年 12 月 31 日 的 2015 财 年 ( 2015 财 年 ), 由 于 油 价 持 续 低 迷, 尽 管 航 油 和 其 他 油 品 供 应 与 贸 易 量 稳 定 保 持 在 2020 万 吨, 但 集 团 收 入 同 比 降 低 47.4% 至 90 亿 美 元 可 分 配 给 股 东 的 净 利 润 同 比 增 长 24.7% 至 6130 万 美 元 2015 财 年 每 股 盈 利 为 7.12 美 分, 净 资 产 回 报 率 为 10.7%,2014 财 年 每 股 盈 利 为 5.72 美 分, 净 资 产 回 报 率 为 9.1% 股 息 政 策 2015 年 11 月, 董 事 会 批 准 了 与 增 长 挂 钩 的 股 息 政 策, 提 高 股 东 回 报 从 2015 年 起,CAO 会 将 年 度 合 并 净 利 润 的 30% 作 为 股 息 派 发 ( 单 层 免 税, 四 舍 五 入 至 0.01 新 元 ), 让 股 东 参 与 CAO 的 成 长, 增 强 股 东 价 值 基 于 2015 财 年 的 业 绩, 董 事 会 提 议 向 股 东 发 放 每 股 0.03 新 元 股 息 (2014 年 股 息 为 每 股 0.02 新 元 ) CAO was awarded Most Transparent Company (Runner-up in Oil & Gas Category) at SIAS Investors Choice Award 2015 CAO 获 颁 2015 年 SIAS 投 资 者 选 择 奖 最 透 明 企 业 ( 油 气 组 别 第 二 名 )

17 Annual Report 为 世 界 最 大 的 国 内 及 国 际 客 运 市 场 CAO 在 中 国 以 外 有 更 多 的 全 球 机 场 供 应 点, 也 会 极 大 受 益 于 这 部 分 增 长 稳 中 求 进 Into-plane refuelling at a Chinese airport 在 中 国 机 场 加 注 航 油 展 望 CAO 在 中 国 民 航 市 场 的 竞 争 优 势 根 深 蒂 固, 为 CAO 的 发 展 带 来 有 利 条 件 虽 然 中 国 经 济 增 速 可 能 在 放 缓, 但 预 计 民 航 业 会 继 续 保 持 增 长 势 头 直 到 2030 年, 总 周 转 量 预 计 将 在 2020 年 达 到 1700 亿 吨 公 里 2015 年 中 国 客 运 吞 吐 量 达 到 4 亿 人 次, 同 比 增 加 约 11%; 航 空 运 输 周 转 量 达 到 777 亿 吨 公 里, 同 比 增 加 13.7% 中 国 预 计 会 在 2030 年 前 成 为 世 界 最 大 的 民 航 市 场, 中 国 对 航 油 的 旺 盛 需 求 以 及 CNAF (CAO 的 母 公 司 ) 在 中 国 民 航 市 场 的 主 导 性 地 位 决 定 了 CAO 的 核 心 发 展 板 块 是 航 油 业 务 除 了 在 中 国 的 自 然 增 长, 集 团 全 球 供 应 与 贸 易 网 络 ( 包 括 香 港 公 司 北 美 公 司 欧 洲 公 司 和 CAO 在 中 国 及 韩 国 的 联 营 公 司 ) 进 一 步 加 强 了 CAO 的 市 场 地 位, 即 领 先 的 全 球 航 油 供 应 与 贸 易 商, 中 国 独 家 航 油 进 口 商 ;CAO 依 托 全 球 网 络 拓 展 业 务, 利 用 在 中 国 的 竞 争 优 势 拓 展 中 国 以 外 的 全 球 业 务, 以 及 通 过 全 球 化 和 多 元 化 战 略, 寻 找 中 国 地 区 以 外 的 增 长 点 在 这 方 面, 公 司 已 经 取 得 了 喜 人 的 成 绩, 截 至 今 日 中 国 以 外 的 收 入 占 集 团 总 收 入 的 47.5%, 而 2010 年 这 一 数 字 仅 为 20% 随 着 中 国 政 府 一 带 一 路 发 展 战 略 的 制 定, 国 家 间 的 连 接 和 合 作 将 日 益 密 切, 尤 其 是 基 础 设 施 项 目, 如 道 路 铁 路 港 口 和 机 场 项 目 丝 绸 之 路 经 济 带 和 21 世 纪 海 上 丝 绸 之 路 覆 盖 欧 亚 非 大 陆 三 大 洲 CAO 有 能 力 把 握 机 遇, 通 过 开 拓 新 市 场, 保 持 在 亚 太 区 的 领 先 地 位 这 些 新 兴 市 场 民 航 业 发 展 蓬 勃,CAO 可 以 借 助 全 球 供 应 与 贸 易 网 络, 通 过 与 航 空 公 司 的 合 作, 增 加 供 应 点 和 供 应 量 同 时, 中 国 如 今 是 世 界 第 二 大 航 空 市 场, 航 油 消 耗 量 为 每 年 2360 万 吨, 作 为 中 国 唯 一 航 油 进 口 商,CAO 责 任 重 大 预 计 中 国 将 在 2020 年 前 保 持 双 位 数 增 速, 并 在 2020 年 达 到 3900 万 吨 未 来 20 年, 预 计 中 国 民 航 业 都 将 保 持 强 劲 增 长, 这 对 CAO 的 发 展 是 一 个 利 好 消 息 中 国 客 运 市 场 在 过 去 10 年 翻 了 四 倍 多, 中 国 将 在 2030 年 前 成 公 司 治 理 是 CAO 发 展 的 基 础, 随 着 集 团 业 务 全 球 化 发 展, 公 司 治 理 在 CAO 的 战 略 和 投 资 决 策 中 起 着 尤 为 重 要 的 作 用 公 司 制 定 实 施 了 稳 健 的 风 险 管 理 系 统 和 内 控 流 程, 在 各 区 域 的 运 作 平 台 上 秉 持 高 标 准 的 公 司 治 理, 去 年 颇 具 挑 战 的 商 业 环 境 更 证 明 了 公 司 治 理 和 风 险 管 理 的 重 要 性 随 着 全 球 经 济 的 持 续 发 展, 集 团 会 坚 持 稳 扎 稳 打, 储 备 足 够 资 本 应 对 挑 战 集 团 会 响 应 中 国 一 带 一 路 发 展 战 略, 继 续 打 造 全 球 业 务, 而 高 水 准 的 公 司 治 理 稳 健 的 风 险 管 理 和 严 格 的 公 司 战 略 将 会 是 进 一 步 发 展 的 基 础 和 保 障 这 些 可 持 续 的 发 展 战 略 是 公 司 发 展 的 支 柱, 将 与 公 司 公 平 诚 信 创 新 和 透 明 的 价 值 观 一 同, 继 续 支 持 我 们 实 现 愿 景, 即 成 为 具 有 创 新 精 神 的 全 球 一 流 的 运 输 燃 料 一 体 化 方 案 供 应 商 致 意 与 感 谢 虽 然 2016 年 的 油 品 需 求 和 行 业 前 景 不 甚 乐 观, 但 我 有 信 心, 在 优 秀 的 管 理 团 队 的 带 领 下, 凭 借 健 康 的 资 产 负 债 表 和 严 格 的 公 司 治 理,CAO 一 定 会 成 功 渡 过 难 关 重 组 完 成 十 年 后 的 CAO 已 经 成 长 为 拥 有 多 领 域 专 业 团 队 的 跨 国 企 业 在 母 公 司 及 大 股 东 CNAF 的 支 持 下, 新 加 坡 管 理 团 队 将 带 领 CAO 发 展 为 一 体 化 产 业 链 的 国 际 知 名 的 油 品 供 应 与 贸 易 商 从 孙 立 先 生 手 中 接 棒 后, 我 会 竭 尽 所 能, 为 CAO 带 来 更 大 的 发 展, 深 化 执 行 集 团 的 全 球 化 战 略 我 希 望 看 到 CAO 的 员 工 和 管 理 层 继 续 实 施 董 事 会 的 战 略 计 划, 加 强 管 理 能 力, 进 一 步 提 高 公 司 治 理, 获 得 更 大 的 发 展 CAO 是 CNAF 全 球 发 展 的 平 台, 随 着 CNAF 执 行 中 国 一 带 一 路 发 展 战 略,CAO 的 重 要 地 位 会 更 加 凸 显 我 衷 心 感 谢 孙 立 先 生 CAO 董 事 会 和 所 有 CAO 员 工 这 些 年 来 的 努 力 和 贡 献! 我 相 信 在 董 事 会 的 领 导 下, 我 们 会 齐 心 协 力, 创 造 更 好 的 成 绩,CAO 将 成 为 全 球 领 先 的 运 输 燃 料 供 应 与 贸 易 公 司, 发 挥 CNAF 海 外 发 展 平 台 的 作 用, 为 CNAF 的 发 展 做 出 显 著 贡 献 我 代 表 董 事 会 和 管 理 层, 感 谢 所 有 股 东 商 业 伙 伴 投 资 者 和 其 他 相 关 方 的 持 续 支 持 和 对 CAO 的 信 心, 感 谢 中 新 两 国 政 府 机 构 的 指 导 在 各 方 的 支 持 下, 我 相 信 CAO 会 成 为 一 家 真 正 的 国 际 化 企 业, 实 现 2020 年 愿 景, 成 为 具 有 创 新 精 神 的 全 球 一 流 运 输 燃 料 一 体 化 方 案 提 供 商 林 万 里 董 事 长

18 16 China Aviation Oil (Singapore) Corporation Ltd Board of Directors 董 事 会

19 Annual Report SEATED FROM LEFT 前 排 左 至 右 Wang Kai Yuen 王 家 園 Lin Wanli 林 万 里 Meng Fanqiu 孟 繁 秋 STANDING FROM LEFT 后 排 左 至 右 Luo Qun 罗 群 Felipe Arbelaez Li Runsheng 李 润 生 Bella Young 楊 必 麗 Zhao Shousen 赵 寿 森 Ang Swee Tian 汪 瑞 典

20 18 China Aviation Oil (Singapore) Corporation Ltd Board of Directors 董 事 会 LIN WANLI, 55 Non-Executive and Non-Independent Chairman Date of first appointment as a director: 11 August 2015 Date of last re-election as a director: N.A. Length of service as director: 4 months (as at 31 December 2015) Board Committee(s) served on: N.A. Academic and Professional Qualification(s): Bachelor of Arts in Political Science and Economics, Shandong University, Jinan Master of Business Administration, Tsinghua University, Beijing Present Directorships: (as at 31 December 2015) Listed Companies: Nil Other Principal Directorships: China National Aviation Fuel Group Corporation (Director) Major Appointments (other than directorships): Nil Past Directorships held over the preceding 3 years (from 1 January 2013 to 31 December 2015): Former Chairman of China Railway Materials Company Limited Former Director of China CNR Corporation Limited Others: Former Deputy Chairman of the China Railway Tunnel Group Co, Ltd Former General Manager of China Railway Materials Group Corporation 林 万 里,55 岁 非 执 行 非 独 立 董 事 长 首 次 当 选 董 事 日 期 : 2015 年 8 月 11 日 上 次 董 事 轮 选 日 期 : 不 适 用 供 职 董 事 年 限 : 4 个 月 ( 截 至 2015 年 12 月 31 日 ) 供 职 董 事 委 员 会 : 无 学 术 和 专 业 资 历 : 山 东 大 学, 政 治 经 济 学 专 业, 经 济 学 士 清 华 大 学, 经 济 管 理 学 院, 工 商 管 理 硕 士 现 任 董 事 席 位 : ( 截 至 2015 年 12 月 31 日 ) 上 市 公 司 : 无 其 他 主 要 董 事 席 位 : 中 国 航 空 油 料 集 团 公 司 ( 董 事 ) 主 要 任 职 ( 除 董 事 职 位 外 ): 无 过 去 三 年 曾 任 董 事 席 位 (2013 年 1 月 1 日 至 2015 年 12 月 31 日 ): 曾 任 中 国 铁 路 物 资 股 份 有 限 公 司 董 事 长 曾 任 中 国 北 车 股 份 有 限 公 司 董 事 其 他 : 曾 任 中 铁 隧 道 集 团 有 限 公 司 副 董 事 长 曾 任 中 国 铁 路 物 资 总 公 司 总 经 理

21 Annual Report WANG KAI YUEN, 68 Deputy Chairman and Lead Independent Director Date of first appointment as a director: 28 April 2008 Date of last re-election as a director: 24 April 2014 Length of service as director: 7 years 8 months (as at 31 December 2015) Board Committee(s) served on: Remuneration Committee (Chairman) Audit Committee (Member) Nominating Committee (Member) Academic and Professional Qualification(s): Bachelor of Engineering in Electrical & Electronics - First Class Honours, National University of Singapore, Singapore Master of Science in Electrical Engineering, Stanford University, USA Master of Science in Industrial Engineering, Stanford University, USA Philosophy of Doctor in Engineering Systems Stanford University, USA Present Directorships: (as at 31 December 2015) Listed Companies: A-Sonic Aerospace Ltd (Director) ComfortDelGro Corporation Ltd (Director) COSCO Corporation (Singapore) Limited (Director) Emas Offshore Ltd (Director) Ezion Holdings Ltd (Director) HLH Group Ltd (Chairman) Matex International Ltd (Director) Other Principal Directorships: Nil Major Appointments (other than directorships): Nil Past Directorships held over the preceding 3 years (from 1 January 2013 to 31 December 2015): Asian Micro Holdings Ltd Xpress Holdings Ltd SuperBowl Holdings Ltd Others: Conferred the Friends of Labour Award in 1988 Former Chairman of Feedback Unit, Government of Singapore Former Member of Parliament, Singapore Parliament 王 家 園,68 岁 副 董 事 长, 首 席 独 立 董 事 首 次 当 选 董 事 日 期 : 2008 年 4 月 28 日 上 次 董 事 轮 选 日 期 : 2014 年 4 月 24 日 供 职 董 事 年 限 : 7 年 零 8 个 月 ( 截 至 2015 年 12 月 31 日 ) 供 职 董 事 委 员 会 : 薪 酬 委 员 会 ( 主 席 ) 审 计 委 员 会 ( 成 员 ) 提 名 委 员 会 ( 成 员 ) 学 术 和 专 业 资 历 : 新 加 坡 国 立 大 学, 工 程 系 一 级 荣 誉 学 位 ( 电 器 与 电 机 工 程 ) 美 国 斯 坦 福 大 学 电 机 工 程 硕 士 学 位 美 国 斯 坦 福 大 学 工 业 工 程 硕 士 学 位 美 国 斯 坦 福 大 学 工 程 学 博 士 学 位 现 任 董 事 席 位 : ( 截 至 2015 年 12 月 31 日 ) 上 市 公 司 : A-Sonic Aerospace 有 限 公 司 ( 董 事 ) 康 福 德 高 企 业 有 限 公 司 ( 董 事 ) 中 远 投 资 ( 新 加 坡 ) 有 限 公 司 ( 董 事 ) Emas Offshore 有 限 公 司 ( 董 事 ) 毅 之 安 控 股 有 限 公 司 ( 董 事 ) 蓬 莱 发 集 团 ( 董 事 长 ) 万 得 国 际 有 限 公 司 ( 董 事 ) 其 他 主 要 董 事 席 位 : 无 主 要 任 职 ( 除 董 事 职 位 外 ): 无 过 去 三 年 曾 任 董 事 席 位 (2013 年 1 月 1 日 至 2015 年 12 月 31 日 ): 亚 威 控 股 有 限 公 司 Xpress 控 股 有 限 公 司 SuperBowl 控 股 有 限 公 司 其 他 : 1988 年 获 颁 劳 工 之 友 奖 前 新 加 坡 政 府 民 意 处 理 组 主 席 前 新 加 坡 国 会 议 员

22 20 China Aviation Oil (Singapore) Corporation Ltd Board of Directors 董 事 会 MENG FANQIU, 48 Chief Executive Officer/ Executive Director Date of first appointment as a director: 28 March 2006 Date of last re-election as a director: 25 April 2013 Length of service as director: 9 years 9 months (as at 31 December 2015) Board Committee(s) served on: Nil Academic and Professional Qualification(s): Bachelor of Law (International Economic Law), China University of Political Science and Law, Beijing Master of Business Law, Renmin University of China, Beijing APAC Executive Master of Business Administration, National University of Singapore, Singapore Qualified Legal Attorney and General Legal Counsel, PRC Present Directorships: (as at 31 December 2015) Listed Companies: Nil Other Principal Directorships: China Aviation Oil (Hong Kong) Company Limited (Chairman/Director) North American Fuel Corporation (Chairman/Director) Shanghai Pudong International Airport Aviation Fuel Supply Corporation Ltd (Deputy Chairman) China Aviation Oil Xinyuan Petrochemicals Co., Ltd (Deputy Chairman) China National Aviation Fuel TSN-PEK Pipeline Transportation Corporation Ltd (Director) Oilhub Korea Yeosu Co., Ltd (Chairman/Director) CAOT Pte. Ltd. (Director) China Aviation Oil (Europe) Limited (Director) Investor Relations Professionals Association (Singapore) Limited (Director) Major Appointments (other than directorships): President of China Enterprises Association (Singapore) Vice Chairman of Singapore Business Federation China Business Group Past Directorships held over the preceding 3 years (from 1 January 2013 to 31 December 2015): Nil Others: Former Official Of Civil Aviation Administration of China ( CAAC ) Conferred the Elite Civil Servant award by CAAC Former Division Director of the Planning and Development Division of China National Aviation Fuel Group Corporation Former Member of Corporate Governance Assessment Committee which was constituted during the restructuring of CAO 孟 繁 秋,48 岁 首 席 执 行 官 / 执 行 董 事 首 次 当 选 董 事 日 期 : 2006 年 3 月 28 日 上 次 董 事 轮 选 日 期 : 2013 年 4 月 25 日 供 职 董 事 年 限 : 9 年 零 9 个 月 ( 截 至 2015 年 12 月 31 日 ) 供 职 董 事 委 员 会 : 无 学 术 和 专 业 资 历 : 中 国 政 法 大 学 国 际 经 济 法 专 业 法 律 学 士 学 位 中 国 人 民 大 学 民 商 法 硕 士 学 位 新 加 坡 国 立 大 学 商 学 院 亚 太 高 层 企 业 主 管 硕 士 学 位 中 华 人 民 共 和 国 律 师 资 格 和 中 华 人 民 共 和 国 企 业 法 律 顾 问 资 格 现 任 董 事 席 位 : ( 截 至 2015 年 12 月 31 日 ) 上 市 公 司 : 无 其 他 主 要 董 事 席 位 : 中 国 航 油 ( 香 港 ) 有 限 公 司 ( 董 事 长 / 董 事 ) 北 美 航 油 有 限 公 司 ( 董 事 长 / 董 事 ) 上 海 浦 东 国 际 机 场 航 空 油 料 有 限 责 任 公 司 ( 副 董 事 长 ) 中 国 航 油 集 团 新 源 石 化 有 限 公 司 ( 副 董 事 长 ) 中 国 航 油 集 团 津 京 管 道 运 输 有 限 责 任 公 司 ( 董 事 ) 韩 国 丽 水 枢 纽 油 库 有 限 公 司 ( 董 事 长 / 董 事 ) CAOT 有 限 公 司 ( 董 事 ) 中 国 航 油 ( 欧 洲 ) 有 限 公 司 ( 董 事 ) 投 资 者 关 系 专 业 协 会 ( 新 加 坡 )( 董 事 ) 主 要 任 职 ( 除 董 事 职 位 外 ): 中 资 企 业 ( 新 加 坡 ) 协 会 会 长 新 加 坡 工 商 联 合 总 会 中 国 工 商 组 副 主 席 过 去 三 年 曾 任 董 事 席 位 (2013 年 1 月 1 日 至 2015 年 12 月 31 日 ): 无 其 他 : 曾 任 职 于 中 国 民 用 航 空 总 局 被 评 为 民 航 总 局 优 秀 公 务 员 中 国 航 空 油 料 集 团 公 司 前 规 划 发 展 部 总 经 理 CAO 重 组 期 间 公 司 治 理 评 估 委 员 会 前 委 员

23 Annual Report ZHAO SHOUSEN, 52 Non-Executive Director and Non-Independent Director Date of first appointment as a director: 28 March 2006 Date of last re-election as a director: 25 April 2013 Length of service as director: 9 years 9 months (as at 31 December 2015) Board Committee(s) served on: Audit Committee (Vice Chairman) Risk Management Committee (Member) Academic and Professional Qualification(s): Bachelor of Management in Financial Accounting, Shandong Economic Institute, Shandong Philosophy of Doctor in Industrial Economics, Beijing Jiaotong University, Beijing Present Directorships: (as at 31 December 2015) Listed Companies: Nil Other Principal Directorships: China National Aviation Fuel Supply Corporation Ltd (Director) China National Aviation Fuel Group Finance Company Ltd (Chairman) Major Appointments (other than directorships): Chief Accountant of China National Aviation Fuel Group Corporation Past Directorships held over the preceding 3 years (from 1 January 2013 to 31 December 2015): Nil Others: Former Director of the Department of Financial Assets of Shengli Petroleum Administration Former Director, Vice President and Chief Accountant of Sinopec Shengli Oil Field Co Ltd Entitled to Special Government Allowance from the State Council of the PRC 赵 寿 森,52 岁 非 执 行 非 独 立 董 事 首 次 当 选 董 事 日 期 : 2006 年 3 月 28 日 上 次 董 事 轮 选 日 期 : 2013 年 4 月 25 日 供 职 董 事 年 限 : 9 年 零 9 个 月 ( 截 至 2015 年 12 月 31 日 ) 供 职 董 事 委 员 会 : 审 计 委 员 会 ( 副 主 席 ) 风 险 管 理 委 员 会 ( 成 员 ) 学 术 和 专 业 资 历 : 山 东 财 经 学 院 财 会 专 业 管 理 学 士 学 位 北 京 交 通 大 学 产 业 经 济 学 博 士 学 位 现 任 董 事 席 位 : ( 截 至 2015 年 12 月 31 日 ) 上 市 公 司 : 无 其 他 主 要 董 事 席 位 : 中 国 航 空 油 料 有 限 责 任 公 司 ( 董 事 ) 中 国 航 油 集 团 财 务 有 限 公 司 ( 董 事 长 ) 主 要 任 职 ( 除 董 事 职 位 外 ): 中 国 航 空 油 料 集 团 公 司 总 会 计 师 过 去 三 年 曾 任 董 事 席 位 (2013 年 1 月 1 日 至 2015 年 12 月 31 日 ): 无 其 他 : 胜 利 石 油 管 理 局 前 财 务 资 产 部 主 任 中 国 石 化 胜 利 油 田 有 限 公 司 前 董 事 副 总 经 理 总 会 计 师 享 受 中 国 国 务 院 政 府 特 殊 津 贴

24 22 China Aviation Oil (Singapore) Corporation Ltd Board of Directors 董 事 会 LI RUNSHENG, 63 Non-Executive and Independent Director Date of first appointment as a director: 24 April 2014 Date of last re-election as a director: 22 April 2015 Length of service as director: 1 year 8 months (as at 31 December 2015) Board Committee(s) served on: Nominating Committee (Chairman) Audit Committee (Member) Remuneration Committee (Member) Academic and Professional Qualification(s): Master of Administrative Management, Macau University of Science and Technology Present Directorships: (as at 31 December 2015) Listed Companies: Nil Other Principal Directorships: Nil Major Appointments (other than directorships): Vice Chairman of China Petroleum and Chemical Industry Association Past Directorships held over the preceding 3 years (from 1 January 2013 to 31 December 2015): Nil Others: Member of Standing Committee of National Committee of China Energy and Chemical Trade Union Member of National Technical Committee of Brand Value and Value Assessment Standardisation Distinguished Professor of China University of Petroleum, Beijing Chairman of China Controlled Chemicals Association Former Assistant to President of China National Petroleum Corporation Former Vice Chairman and Executive Member of China Petroleum Enterprise Management Association Former Director of PetroChina Marketing Company Limited Former Vice President of PetroChina Company Limited, Refining & Marketing Branch 李 润 生,63 岁 非 执 行 独 立 董 事 首 次 当 选 董 事 日 期 : 2014 年 4 月 24 日 上 次 董 事 轮 选 日 期 : 2015 年 4 月 22 日 供 职 董 事 年 限 : 1 年 零 8 个 月 ( 截 至 2015 年 12 月 31 日 ) 供 职 董 事 委 员 会 : 提 名 委 员 会 ( 主 席 ) 审 计 委 员 会 ( 成 员 ) 薪 酬 委 员 会 ( 成 员 ) 学 术 和 专 业 资 历 : 澳 门 科 技 大 学 行 政 管 理 硕 士 现 任 董 事 席 位 : ( 截 至 2015 年 12 月 31 日 ) 上 市 公 司 : 无 其 他 主 要 董 事 席 位 : 无 主 要 任 职 ( 除 董 事 职 位 外 ): 中 国 石 油 和 化 学 工 业 联 合 会 副 会 长 过 去 三 年 曾 任 董 事 席 位 (2013 年 1 月 1 日 至 2015 年 12 月 31 日 ): 无 其 他 : 中 国 能 源 化 学 工 会 全 国 委 员 会 常 委 全 国 品 牌 价 值 及 价 值 测 算 标 准 化 技 术 委 员 会 委 员 中 国 石 油 大 学 ( 北 京 ) 特 聘 教 授 中 国 监 控 化 学 品 协 会 理 事 长 前 中 国 石 油 天 然 气 集 团 公 司 总 经 理 助 理 前 中 国 石 油 企 业 管 理 协 会 副 理 事 长 常 务 理 事 前 中 石 油 销 售 有 限 责 任 公 司 董 事 前 中 国 石 油 天 然 气 股 份 有 限 公 司 炼 油 与 销 售 分 公 司 副 总 经 理

25 Annual Report FELIPE ARBELAEZ, 46 Non-Executive and Non-Independent Director Date of first appointment as a director: 30 July 2015 Date of last re-election as a director: N.A. Length of service as director: 5 months (as at 31 December 2015) Board Committee(s) served on: Risk Management Committee (Chairman) Audit Committee (Member) Academic and Professional Qualification(s): Bachelor in Mechanical Engineering, University of Illinois, United States/ Universidad de los Andes, Colombia Master of Science in Mechanical Engineering, University of Colorado, United States Masters in Finance, Universidad de los Andes, Colombia Present Directorships: (as at 31 December 2015) Listed Companies: Nil Other Principal Directorships: BP Gas Marketing Limited (Director) BP Ghana Limited (Director) Guangdong Dapeng LNG Company Ltd (Vice Chairman) Major Appointments (other than directorships): Nil Past Directorships held over the preceding 3 years (from 1 January 2013 to 31 December 2015): BP Global West Africa Ltd, Nigeria (Director) Nigermed Petroleum S.A., Panama (Director) Others: Former Head of Crude Trading for Europe, Russia & Africa, BP Plc Former Head of Marketing & Origination for Europe, Russia & Africa, BP Plc Former Chief Commercial Officer of Integrated Supply & Trading, BP Plc 傅 安 赫,46 岁 非 执 行 非 独 立 董 事 首 次 当 选 董 事 日 期 : 2015 年 7 月 30 日 上 次 董 事 轮 选 日 期 : 不 适 用 供 职 董 事 年 限 : 5 个 月 ( 截 至 2015 年 12 月 31 日 ) 供 职 董 事 委 员 会 : 风 险 管 理 委 员 会 ( 主 席 ) 审 计 委 员 会 ( 成 员 ) 学 术 和 专 业 资 历 : 美 国 伊 利 诺 伊 大 学 / 哥 伦 比 亚 安 第 斯 大 学, 机 械 工 程 学 学 士 美 国 科 罗 拉 多 大 学, 机 械 工 程 学 硕 士 哥 伦 比 亚 安 第 斯 大 学, 金 融 学 硕 士 现 任 董 事 席 位 : ( 截 至 2015 年 12 月 31 日 ) 上 市 公 司 : 无 其 他 主 要 董 事 席 位 : BP Gas Marketing Limited ( 董 事 ) BP Ghana Limited ( 董 事 ) 广 东 大 鹏 液 化 天 然 气 有 限 公 司 ( 副 主 席 ) 主 要 任 职 ( 除 董 事 职 位 外 ): 无 过 去 三 年 曾 任 董 事 席 位 (2013 年 1 月 1 日 至 2015 年 12 月 31 日 ): BP Global West Africa Ltd ( 尼 日 利 亚 )( 董 事 ) Nigermed Petroleum S.A. ( 巴 拿 马 )( 董 事 ) 其 他 : 曾 任 英 国 石 油 公 司 欧 洲 俄 罗 斯 和 非 洲 原 油 贸 易 主 管 曾 任 英 国 石 油 公 司 欧 洲 俄 罗 斯 和 非 洲 营 销 与 开 发 主 管 曾 任 英 国 石 油 公 司 综 合 供 应 与 贸 易 首 席 商 务 官

26 24 China Aviation Oil (Singapore) Corporation Ltd Board of Directors 董 事 会 BELLA YOUNG, 51 Non-Executive and Non-Independent Director Date of first appointment as a director: 22 April 2015 Date of last re-election as a director: N.A. Length of service as director: 8 months (as at 31 December 2015) Board Committee(s) served on: Nominating Committee (Member) Remuneration Committee (Member) Academic And Professional Qualification(s): Bachelor of Science, Engineering, University of Hong Kong, Hong Kong Master of Business Administration, Oklahoma City University, USA Present Directorships: (as at 31 December 2015) Listed Companies: Nil Other Principal Directorships: BP Hong Kong Limited (Director) J & A Petrochemical Sdn. Bhd. (Director) Shine Top International Investment Limited (Director) Shenzhen Cheng Yuan Aviation Oil Company Limited (Director) South China Bluesky Aviation Oil Company Limited (Director) Major Appointments (other than directorships): General Manager of Air BP Asia Past Directorships held over the preceding 3 years (from 1 January 2013 to 31 December 2015): Nil Others: Former Trader (Middle Distillates) of BP Singapore Pte Ltd Former Lubricants Manager of BP Hong Kong Ltd, South China Former Business Advisor of BP Hong Kong Ltd, Air BP China Former Strategy Planning & Performance Manager of BP China (Holdings) Ltd, China LPG Former Supply & Logistics Manager of BP Hong Kong Ltd, Air BP Asia Pacific 楊 必 麗,51 岁 非 执 行 非 独 立 董 事 首 次 当 选 董 事 日 期 : 2015 年 4 月 22 日 上 次 董 事 轮 选 日 期 : 不 适 用 供 职 董 事 年 限 : 8 个 月 ( 截 至 2015 年 12 月 31 日 ) 供 职 董 事 委 员 会 : 提 名 委 员 会 ( 成 员 ) 薪 酬 委 员 会 ( 成 员 ) 学 术 和 专 业 资 历 : 香 港 大 学 理 学 学 士 ( 工 程 ) 学 位 俄 克 拉 荷 马 市 大 学 工 商 管 理 学 硕 士 学 位 现 任 董 事 席 位 : ( 截 至 2015 年 12 月 31 日 ) 上 市 公 司 : 无 其 他 主 要 董 事 席 位 : BP 香 港 有 限 公 司 ( 董 事 ) J & A Petrochemical Sdn. Bhd.( 董 事 ) Shine Top International Investment Limited ( 董 事 ) 深 圳 承 远 航 空 油 料 有 限 公 司 ( 董 事 ) 华 南 蓝 天 航 空 油 料 有 限 公 司 ( 董 事 ) 主 要 任 职 ( 除 董 事 职 位 外 ): Air BP 亚 洲 总 经 理 过 去 三 年 曾 任 董 事 席 位 (2013 年 1 月 1 日 至 2015 年 12 月 31 日 ): 无 其 他 : 曾 任 BP 新 加 坡 私 人 有 限 公 司 中 馏 分 贸 易 员 曾 任 BP 香 港 有 限 公 司 华 南 地 区 润 滑 油 经 理 曾 任 BP 香 港 有 限 公 司 Air BP 中 国 前 业 务 顾 问 曾 任 BP 中 国 控 股 有 限 公 司 ( 广 州 ) 战 略 规 划 与 业 绩 经 理 ( 中 国 液 化 石 油 气 ) 曾 任 BP 香 港 有 限 公 司 Air BP( 亚 太 ) 供 应 与 物 流 经 理

27 Annual Report ANG SWEE TIAN, 67 Non-Executive and Independent Director Date of first appointment as a director: 14 November 2008 Date of last re-election as a director: 24 April 2014 Length of service as director: 7 years 1 month (as at 31 December 2015) Board Committee(s) served on: Audit Committee (Chairman) Nominating Committee (Member) Remuneration Committee (Member) Risk Management Committee (Member) Academic and Professional Qualification(s): Bachelor of Accountancy (First Class Honours), Nanyang University of Singapore, Singapore Master of Business Administration (Distinction), Northwestern University, USA Present Directorships: (as at 31 December 2015) Listed Companies: COSCO Corporation Singapore Limited (Independent Director) Other Principal Directorships: ICE Futures Singapore Pte Ltd (Non-Executive Chairman) Tuas Power Ltd (Non-Executive Director) Major Appointments (other than directorships): Nil Past Directorships held over the preceding 3 years (from 1 January 2013 to 31 December 2015): Nil Others: Honouree of the Futures Industry Association s Futures Hall of Fame (First Inductee from an Asian Exchange) Former President of Singapore Exchange Ltd 汪 瑞 典,67 岁 非 执 行 独 立 董 事 首 次 当 选 董 事 日 期 : 2008 年 11 月 14 日 上 次 董 事 轮 选 日 期 : 2014 年 4 月 24 日 供 职 董 事 年 限 : 7 年 零 1 个 月 ( 截 至 2015 年 12 月 31 日 ) 供 职 董 事 委 员 会 : 审 计 委 员 会 ( 主 席 ) 提 名 委 员 会 ( 成 员 ) 薪 酬 委 员 会 ( 成 员 ) 风 险 管 理 委 员 会 ( 成 员 ) 学 术 和 专 业 资 历 : 新 加 坡 南 洋 大 学 会 计 学 学 士 ( 一 级 荣 誉 学 位 ) 美 国 西 北 大 学 工 商 管 理 硕 士 学 位 ( 成 绩 优 异 ) 现 任 董 事 席 位 : ( 截 至 2015 年 12 月 31 日 ) 上 市 公 司 : 中 远 投 资 新 加 坡 有 限 公 司 ( 独 立 董 事 ) 其 他 主 要 董 事 席 位 : 洲 际 交 易 所 新 加 坡 期 货 私 人 有 限 公 司 ( 非 执 行 董 事 长 ) 大 士 能 源 有 限 公 司 ( 非 执 行 董 事 ) 主 要 任 职 ( 除 董 事 职 位 外 ): 无 过 去 三 年 曾 任 董 事 席 位 (2013 年 1 月 1 日 至 2015 年 12 月 31 日 ): 无 其 他 : 美 国 期 货 协 会 期 货 名 人 堂 首 位 来 自 亚 洲 交 易 所 的 业 者 新 加 坡 交 易 所 前 总 裁

28 26 China Aviation Oil (Singapore) Corporation Ltd Board of Directors 董 事 会 LUO QUN, 53 Non-Executive and Non-Independent Director Date of first appointment as a director: 26 February 2010 Date of last re-election as a director: 22 April 2015 Length of service as director: 5 years 10 months (as at 31 December 2015) Board Committee(s) served on: Nominating Committee (Vice Chairman) Remuneration Committee (Vice Chairman) Academic and Professional Qualification(s): Executive Master of Business Administration, National University of Singapore, Singapore Doctor of Philosophy in Management, South China University of Technology, Guangdong Certified Senior Professional Manager and Certified Senior Risk Manager Qualified Senior Engineer (Professor Level), China Present Directorships: (as at 31 December 2015) Listed Companies: Nil Other Principal Directorships: Nil Major Appointments (other than directorships): Vice President of China National Aviation Fuel Group Corporation Past Directorships held over the preceding 3 years (from 1 January 2013 to 31 December 2015): Nil Others: Former Assistant to the President of China National Aviation Fuel Group Corporation Former President of China National Aviation Fuel Logistics Co., Ltd Former Project Leader for the construction of new jet fuel supply facilities at Guangzhou Baiyun International Airport Former Executive Director of China National Aviation South China Bluesky Corporation Former Chairman of China Aviation Oil (Hong Kong) Company Limited Former Chairman of North American Fuel Corporation 罗 群,53 岁 非 执 行 非 独 立 董 事 首 次 当 选 董 事 日 期 : 2010 年 2 月 26 日 上 次 董 事 轮 选 日 期 : 2015 年 4 月 22 日 供 职 董 事 年 限 : 5 年 零 10 个 月 ( 截 至 2015 年 12 月 31 日 ) 供 职 董 事 委 员 会 : 提 名 委 员 会 ( 副 主 席 ) 薪 酬 委 员 会 ( 副 主 席 ) 学 术 和 专 业 资 历 : 新 加 坡 国 立 大 学 高 层 管 理 人 员 工 商 管 理 硕 士 学 位 中 国 华 南 理 工 大 学 管 理 学 博 士 学 位 注 册 高 级 职 业 经 理 人 和 高 级 风 险 管 理 师 中 国 教 授 级 高 级 工 程 师 现 任 董 事 席 位 : ( 截 至 2015 年 12 月 31 日 ) 上 市 公 司 : 无 其 他 主 要 董 事 席 位 : 无 主 要 任 职 ( 除 董 事 职 位 外 ): 中 国 航 空 油 料 集 团 公 司 副 总 经 理 过 去 三 年 曾 任 董 事 席 位 (2013 年 1 月 1 日 至 2015 年 12 月 31 日 ): 无 其 他 : 中 国 航 空 油 料 集 团 公 司 前 总 经 理 助 理 中 国 航 油 集 团 物 流 有 限 公 司 前 总 经 理 广 州 新 白 云 国 际 机 场 迁 建 供 油 工 程 指 挥 部 前 指 挥 长 华 南 蓝 天 航 空 油 料 有 限 公 司 前 执 行 董 事 中 国 航 油 ( 香 港 ) 有 限 公 司 前 董 事 长 北 美 航 油 有 限 公 司 前 董 事 长

29 Annual Report Corporate Information (as at March 2016) DIRECTORS Lin Wanli (Chairman / Non-Independent, Non-Executive Director) Wang Kai Yuen (Deputy Chairman, Lead Independent Director) Meng Fanqiu (Chief Executive Officer /Executive Director) Ang Swee Tian (Independent Director) Bella Young (Non-Independent, Non-Executive Director) Felipe Arbelaez (Non-Independent, Non-Executive Director) Li Runsheng (Independent Director) Luo Qun (Non-Independent, Non-Executive Director) Zhao Shousen (Non-Independent, Non-Executive Director) AUDIT COMMITTEE Ang Swee Tian (Chairman) Zhao Shousen (Vice Chairman) Wang Kai Yuen Li Runsheng Felipe Arbelaez REMUNERATION COMMITTEE Wang Kai Yuen (Chairman) Luo Qun (Vice Chairman) Li Runsheng Bella Young Ang Swee Tian NOMINATING COMMITTEE Li Runsheng (Chairman) Luo Qun (Vice Chairman) Wang Kai Yuen Bella Young Ang Swee Tian RISK MANAGEMENT COMMITTEE Felipe Arbelaez (Chairman) Zhao Shousen Ang Swee Tian COMPANY SECRETARY Doreen Nah AUDITORS KPMG LLP Public Accountants and Chartered Accountants (Appointed on 28 April 2006) Partner in charge: Ang Fung Fung (Since financial year 2011) SHARE REGISTRAR AND SHARE TRANSFER OFFICE Boardroom Corporate & Advisory Services Pte. Ltd. 50 Raffles Place #32-01 Singapore Land Tower Singapore PRINCIPAL BANKERS ABN AMRO Bank, N.V. Agricultural Bank of China ANZ Bank Bank of China Limited Bank of Communications Co., Ltd China Construction Bank, Singapore Branch Crédit Agricole CIB, Singapore Branch DBS Bank Ltd Industrial and Commercial Bank of China, Singapore Branch ING Bank N.V., Singapore Branch JP Morgan OCBC Bank Société Générale, Singapore Branch The Hongkong and Shanghai Banking Corporation Limited United Overseas Bank Limited Westpac Banking Corporation, Singapore Branch REGISTERED OFFICE 8 Temasek Boulevard #31-02 Suntec Tower Three Singapore Tel: (65) Fax: (65) Website: 公 司 信 息 ( 截 至 2016 年 3 月 ) 董 事 林 万 里 ( 董 事 长 / 非 独 立 非 执 行 董 事 ) 王 家 園 ( 副 董 事 长 / 首 席 独 立 董 事 ) 孟 繁 秋 ( 首 席 执 行 官 / 执 行 董 事 ) 汪 瑞 典 ( 独 立 董 事 ) 楊 必 麗 ( 非 独 立 非 执 行 董 事 ) Felipe Arbelaez ( 非 独 立 非 执 行 董 事 ) 李 润 生 ( 独 立 董 事 ) 罗 群 ( 非 独 立 非 执 行 董 事 ) 赵 寿 森 ( 非 独 立 非 执 行 董 事 ) 审 计 委 员 会 汪 瑞 典 ( 主 席 ) 赵 寿 森 ( 副 主 席 ) 王 家 園 李 润 生 Felipe Arbelaez 薪 酬 委 员 会 王 家 園 ( 主 席 ) 罗 群 ( 副 主 席 ) 李 润 生 楊 必 麗 汪 瑞 典 提 名 委 员 会 李 润 生 ( 主 席 ) 罗 群 ( 副 主 席 ) 王 家 園 楊 必 麗 汪 瑞 典 风 险 管 理 委 员 会 Felipe Arbelaez ( 主 席 ) 赵 寿 森 汪 瑞 典 公 司 秘 书 蓝 肖 蝶 外 部 审 计 师 KPMG LLP Public Accountants and Chartered Accountants ( 受 聘 于 2006 年 4 月 28 日 ) 负 责 合 伙 人 : 洪 芳 芳 ( 从 2011 财 年 起 ) 股 票 登 记 处 和 转 让 处 Boardroom Corporate & Advisory Services Pte. Ltd. 50 Raffles Place #32-01 Singapore Land Tower Singapore 主 要 银 行 ABN AMRO Bank, N.V. Agricultural Bank of China ANZ Bank Bank of China Limited Bank of Communications Co., Ltd China Construction Bank, Singapore Branch Crédit Agricole CIB, Singapore Branch DBS Bank Ltd Industrial and Commercial Bank of China, Singapore Branch ING Bank N.V., Singapore Branch JP Morgan OCBC Bank Société Générale, Singapore Branch The Hongkong and Shanghai Banking Corporation Limited United Overseas Bank Limited Westpac Banking Corporation, Singapore Branch 注 册 办 公 室 淡 马 锡 林 荫 道 8 号 新 达 城 第 3 大 厦 31 楼 2 号 新 加 坡 邮 区 电 话 :(65) 传 真 :(65) 网 址 :

30

31

32 30 China Aviation Oil (Singapore) Corporation Ltd Chief Executive Officer s Strategic Report A Message from Meng Fanqiu Dear Shareholders, In 2015, the Company faced unprecedented challenges as a result of increased uncertainty over a recovery in the global economy. China s slower rate of growth had a significant impact on the macroeconomic environment, further exacerbating the oversupply situation in global oil markets as demand in the world s largest consumer market slowed. Coupled with geopolitical uncertainties, regional wars, armed conflicts and terrorism as well as other macroeconomic factors, this led to increased volatility in global oil markets and oil prices fell sharply to hit its lowest since 2004 during the year. GROWTH Faced with a difficult external environment and the collapse in oil prices reflecting the weak state of demand in the world economy, the Group responded swiftly to the changing market dynamics and fine-tuned its business strategies, leveraging on its core competencies in jet fuel supply and trading as well as its global supply and trading network. To mitigate the difficult operating environment, CAO adjusted its business plans and adopted a cautious trading strategy as well as suspended its petrochemical business even as the Group continued to work at developing structural advantages in its fuel oil business. With the combined teamwork and perseverance of all employees, CAO achieved commendable operating results and FY2015 net profit grew 24.7% to US$61.3 million, reflecting the Group s single-minded focus to excel despite the times. Due to the low oil prices, total revenue of the Group for FY2015 was US$9.0 billion, a decrease of 47.4% from a year ago even as total supply and trading volumes for jet fuel and other oil products remained relatively stable FY2015 Net Profit Return on Equity US$61.3m 10.7% at 20.2 million tonnes for the year. Earnings per share were 7.12 US cents for FY2015 with a return on equity of 10.7% compared to 5.72 US cents and a return on equity of 9.1% a year ago. Despite the challenges in 2015, the Group continued to grow and expand its global supply and trading network as well as integrated value chain. Validating the improved efficacy and operational effectiveness of CAO s integrated global supply chain, CAO together with its subsidiaries NAFCO and CAOE collectively ran independent supply shipments from Asia to North America, successfully paving a smooth physical supply channel across the continents. This was a historic breakthrough for CAO s integrated business model; validating the Group s integrated value chain which today spans Asia, the United States and Europe. STRENGTHENED Indeed, CAO s globalisation strategy made historic breakthroughs in 2015, as seen in the Group s maiden independent cargoes from Asia to North America; the commencement of our operations in Hong Kong as Hong Kong International Airport s ( HKIA ) third licensed refueller as well as the Group s progress in avgas and aviation marketing. Supplying to 38 international airports outside mainland China today, our aviation marketing business volumes has increased 32% with an enlarged customer base which includes reputable international airlines such as Emirates and Lufthansa in addition to the three major Chinese airlines. CAO is on track in the establishment of its brand name internationally as a specialised jet fuel company. We have also significantly rebuilt the reputation of CAO to be a Company of sound corporate standing and repute amongst listed companies in Singapore. In terms of accolades, 2015 saw the Group being ranked as one of the most valuable companies in the world in the Forbes Global 2000 for the third consecutive year. In July 2015, CAO was awarded Best Investor Relations (Gold) at the Singapore Corporate Awards 2015, the only Chinese state-owned enterprise to have won the award since the commencement of the award 10 years ago. Also, CAO ranked 34 th in the 100 Asian Corporate Governance Excellence Award, making CAO the topranking Chinese company listed on the Singapore Exchange in 2015 and in October 2015, CAO was awarded the Most Transparent Company by SIAS for the sixth consecutive year.

33 Annual Report MENG FANQIU Chief Executive Officer/ Executive Director 孟 繁 秋 首 席 执 行 官 / 执 行 董 事

34 32 China Aviation Oil (Singapore) Corporation Ltd Chief Executive Officer s Strategic Report A Message from Meng Fanqiu RESILIENCE Over the years, as CAO s good name continues to ascend, the Group has made significant progress in corporate standing which further attests to the support its parent company CNAF and strategic partner BP had put in to hone management expertise and leadership to spearhead, optimise and strengthen the Group s strategy and core competencies. Today, CAO boasts a strong balance sheet, robust enterprise risk management processes, a strong management team and heightened corporate governance practices which sets the foundation for its sustainable growth going forward. These key corporate strengths developed over the years have heightened the Group s resilience to overcome the challenges ahead as our industry goes through difficult times and are the very building blocks which will ensure the continued success of CAO even as the Group becomes more proactive in creating value for itself as well as its stakeholders, ready to seize any opportunities that may arise and invest prudently, to take CAO to the next level. With the ongoing macroeconomic uncertainty, 2016 looks set to be a difficult year as global economies continue to be saddled with downside risks such as an oversupply of oil, depressed oil prices, volatilities in financial markets and geopolitical uncertainties. We therefore expect the oil trading environment to continue to be challenging in the year ahead; for which our efforts to shore up our resilience these past years will bode us well as we continue to seize growth opportunities for sustainable development. Opportunities Amid the Headwinds Whilst the global economy remains uncertain, the civil aviation industry bears huge potential for growth and development. China s economy will maintain growth rates of 6.5% to 7% and China s civil aviation industry is set to continue to maintain its double-digit growth rates. Regional imbalance in the oil markets will continue to create trade opportunities for CAO and structural changes in the oil industry will provide merger and acquisition opportunities. One Belt, One Road China s development strategy of One Belt, One Road has brought CAO new opportunities for development, which will also be supported by the burgeoning growth of the aviation industry in the resultant emerging markets. As a Singapore-listed entity with deeply entrenched Chinese state-owned enterprise parentage, CAO is poised to be at the forefront of China s One Belt, One Road development strategy. In line with its globalisation strategy, the Group will enter into new airports along the One Belt, One Road itineraries and continue to increase its supply locations and business volumes whilst seizing opportunities to invest in assets synergistic to its jet fuel supply and trading business. The Group is therefore set to capture the impending opportunities in the global arena and maintain a leading position through penetrating new markets. CAO ranked 3 rd in 2015 Singapore International 100 Ranking in Overseas Sales/Turnover Excellence category CAO 跻 身 2015 新 加 坡 国 际 100 强 ( 企 业 海 外 销 售 额 / 营 业 额 ), 名 列 第 三

35 Annual Report CAO was awarded Best Investor Relations (Gold) at Singapore Corporate Awards 2015 CAO 获 颁 2015 年 新 加 坡 企 业 大 奖 的 最 佳 投 资 者 关 系 金 奖 APPRECIATION Indeed, 2016 is set to be a key development milestone for CAO. Notwithstanding the difficult operating environment, with the lower oil prices, under the ambit of CAO s 2020 strategy, the Group will further fine-tune and adjust its strategic plans in line with market dynamics to strengthen its strategic initiatives as the sole importer of jet fuel into China. We see opportunities to further realise values through the Group s integrated global supply chain. The Group will continue to focus on building a global jet fuel supply and trading network so as to expand and grow its jet fuel supply and trading business globally, including expanding its aviation marketing business into more airports outside mainland China. With prudent risk management practices and controls, the Group will also continue to pursue its diversification strategies in other oil products, particularly in building structural advantages for its fuel oil business in line with market trends. The Group will focus on pursuing its long-term strategy to ensure a steady and sustainable growth trajectory and procure the stable development of its businesses going forward while actively seeking opportunities to expand its investments in synergetic and strategic oilrelated assets, with synergetic businesses to grow exponentially by way of mergers and acquisitions even as we continue to work single-mindedly toward the fulfillment of the Group s vision, mission and strategic objectives to be a constantly innovating global top-tier integrated transportation fuels provider. On behalf of the management team and all CAO employees, I wish to thank our parent company, CNAF, and major shareholder BP, for their continuous support. I would also like to thank all our shareholders for their understanding and support. I would also like to express my gratitude to our sister company, China National Aviation Fuel Corporation Ltd, our suppliers, trading counterparties, aviation clients, ship owners and other business partners for their support. We look forward to more mutually beneficial and deeper cooperation in the future. A sincere thank you to our associated companies - SPIA, TSN-PEKCL, Xinyuan and OKYC. I would also like to thank all employees at CAO and its subsidiaries as well as CNAF HKR. CAO would not have overcome the numerous challenges we faced nor rebuilt itself if not for your commitment and perseverance through the years. Lastly, my appreciation to all other stakeholders for their support. We look forward to your continued support in the future. I am excited over our prospects and firmly believe that with the continued support of our shareholders under the stirling leadership of our Board of Directors, if we all work together with persistence and resilience amid challenging times, we are poised to seize opportunities and achieve robust development and together bring CAO to a new level of growth! MENG FANQIU Chief Executive Officer/Executive Director

36 34 China Aviation Oil (Singapore) Corporation Ltd 首 席 执 行 官 战 略 报 告 孟 繁 秋 致 辞 尊 敬 的 各 位 股 东, 2015 年, 全 球 经 济 复 苏 不 确 定 性 加 剧, 公 司 面 临 前 所 未 有 的 挑 战 作 为 全 球 最 大 的 消 费 市 场, 中 国 经 济 放 缓 对 全 球 经 济 产 生 重 大 影 响, 油 品 供 应 过 剩 的 情 况 日 益 严 重 伴 随 地 缘 政 治 的 不 确 定 性 区 域 战 争 武 装 冲 突 和 恐 怖 主 义 以 及 其 他 宏 观 经 济 因 素, 全 球 油 品 市 场 波 动 增 加, 油 价 也 在 2015 年 狂 跌 至 2004 年 以 来 的 最 低 点 发 展 稳 中 求 进 面 对 恶 劣 的 外 部 环 境 狂 跌 的 油 价 和 疲 软 的 全 球 需 求, 集 团 反 应 迅 速, 完 善 业 务 战 略, 确 定 了 以 航 油 供 应 和 贸 易 业 务 为 核 心 优 势, 继 续 打 造 全 球 供 应 与 贸 易 网 络 为 了 应 对 艰 难 的 运 营 环 境,CAO 调 整 了 业 务 计 划, 采 取 了 谨 慎 的 贸 易 战 略, 暂 停 化 工 品 业 务, 同 时 继 续 打 造 燃 料 油 业 务 的 结 构 性 优 势 在 全 体 员 工 的 共 同 努 力 下,CAO 在 2015 年 迎 难 而 上, 取 得 了 不 俗 的 成 绩, 净 利 润 增 长 24.7% 至 6130 万 美 元 由 于 油 价 低 迷,2015 年 集 团 收 入 同 比 下 滑 47.4% 至 90 亿 美 元, 但 航 油 和 其 他 油 品 供 应 与 贸 易 总 量 保 持 在 相 对 稳 定 的 2020 万 吨 2015 年 每 股 盈 利 是 7.12 美 分, 净 资 产 收 益 率 为 10.7% 2014 年 每 股 盈 利 是 5.72 美 分, 净 资 产 收 益 率 为 9.1% 尽 管 2015 年 遇 到 种 种 挑 战, 集 团 继 续 拓 展 全 球 供 应 与 贸 易 网 络 和 一 体 化 供 应 链 CAO 与 北 美 子 公 司 和 欧 洲 子 公 司 一 起, 将 亚 洲 货 物 自 主 运 作 运 往 北 美 销 售, 证 明 了 全 球 一 体 化 供 应 链 的 有 效 性 和 运 营 效 率 这 对 CAO 的 全 球 业 务 有 重 大 意 义, 覆 盖 亚 洲 美 国 和 欧 洲 的 一 体 化 价 值 链 彰 显 成 效 声 誉 显 著 提 高 CAO 的 全 球 化 战 略 在 2015 年 取 得 了 历 史 性 的 突 破 除 了 首 次 打 通 亚 洲 到 北 美 的 货 物 运 输 渠 道, 我 们 也 拿 到 香 港 国 际 机 场 第 三 张 加 注 牌 照, 并 开 始 运 营 我 们 在 中 国 海 外 供 油 的 机 场 已 经 达 到 38 个, 业 务 量 同 比 增 加 32% 阿 联 酋 航 空 汉 莎 航 空 等 世 界 知 名 航 空 公 司 都 成 为 我 们 的 航 空 客 户 CAO 作 为 专 业 航 油 公 司 的 海 外 品 牌 已 经 逐 渐 确 立 CAO 的 公 司 形 象 也 得 到 显 著 改 善, 成 为 一 家 有 着 良 好 声 誉 的 新 加 坡 上 市 公 司 2015 年 集 团 连 续 第 三 年 位 列 福 布 斯 2000 强 公 司 榜 单, 代 表 CAO 被 列 为 世 界 最 有 价 值 公 司 之 一 2015 年 7 月,CAO 获 得 新 加 坡 企 业 大 奖 最 佳 投 资 者 关 系 金 奖, 也 是 该 奖 项 设 立 十 年 以 来 获 得 该 奖 项 的 唯 一 一 家 中 国 国 企 除 此 之 外,CAO 在 亚 洲 公 司 治 理 卓 越 奖 中 排 名 第 34, 也 是 2015 年 新 交 所 上 市 公 CNAF s into-plane refuelling services at a PRC airport CNAF 在 中 国 机 场 的 航 油 加 注 服 务

37 Annual Report 财 年 净 利 润 净 资 产 收 益 率 司 中 排 名 第 一 的 中 国 公 司 2015 年 10 月,CAO 连 续 第 六 年 获 得 新 加 坡 证 券 投 资 者 协 会 颁 发 的 最 透 明 公 司 奖 机 敏 应 对 环 境 这 些 年,CAO 的 声 誉 不 断 加 强, 证 明 了 在 母 公 司 CNAF 和 战 略 伙 伴 BP 的 支 持 下, 管 理 层 磨 砺 经 验 和 领 导 力, 带 领 员 工 优 化 强 化 CAO 集 团 的 战 略 和 核 心 竞 争 力 如 今 的 CAO 有 着 健 康 的 资 产 负 债 表 稳 健 的 企 业 风 险 管 理 框 架 经 验 丰 富 的 管 理 团 队 和 高 水 准 的 公 司 治 理 实 践, 这 些 都 为 未 来 的 可 持 续 发 展 打 下 良 好 基 础 几 年 来 打 造 的 核 心 优 势 使 得 公 司 可 以 更 灵 活 应 对 行 业 困 境, 保 持 行 业 领 先 地 位 集 团 也 积 极 为 自 身 和 相 关 各 方 创 造 价 值, 把 握 有 利 时 机, 进 行 明 智 投 资, 进 入 下 一 阶 段 的 发 展 2016 年, 全 球 宏 观 经 济 的 不 确 定 性 犹 存, 下 行 风 险 包 括 油 品 供 应 过 剩 油 价 低 迷 金 融 市 场 波 动 地 缘 政 治 的 不 确 定 性 我 们 预 计 油 品 贸 易 环 境 在 2016 年 依 然 充 满 挑 战 经 过 几 年 的 发 展,CAO 已 经 有 能 力 机 敏 应 对 环 境, 抓 住 机 遇, 持 续 发 展 机 遇 与 挑 战 共 存 6130 万 美 元 10.7% 虽 然 全 球 经 济 依 然 充 满 变 数, 但 民 航 业 充 满 了 巨 大 发 展 潜 力 中 国 经 济 还 会 继 续 保 持 6.5% 至 7% 的 增 长 速 度, 中 国 的 民 航 业 也 将 保 持 两 位 数 的 增 长 油 品 市 场 区 域 间 的 不 平 衡 会 为 CAO 带 来 贸 易 机 会, 油 品 市 场 的 结 构 性 变 化 也 会 带 来 并 购 机 遇 一 带 一 路 一 带 一 路 战 略 为 CAO 发 展 带 来 了 新 机 遇, 新 兴 经 济 体 民 航 业 的 蓬 勃 发 展 也 势 必 会 带 动 CAO 的 发 展 作 为 有 国 企 背 景 的 新 加 坡 上 市 公 司,CAO 处 在 执 行 中 国 一 带 一 路 战 略 的 最 前 沿 集 团 将 结 合 实 施 全 球 化 发 展 战 略, 开 拓 一 带 一 路 国 家 机 场 供 应 点 和 增 加 供 应 量, 并 投 资 与 航 油 供 油 与 贸 易 具 有 协 同 性 的 资 产 以 此 把 握 全 球 发 展 机 遇, 通 过 进 入 新 市 场 保 持 领 先 地 位 2016 年 对 CAO 的 发 展 将 是 关 键 性 的 一 年 尽 管 运 营 环 境 困 难, 油 价 低 迷, 作 为 中 国 唯 一 航 油 进 口 商, 在 2020 年 战 略 的 指 导 下, 集 团 会 继 续 根 据 市 场 变 化 适 时 调 整 完 善 战 略 规 划, 加 强 业 务 战 略 全 球 一 体 化 供 应 链 可 以 帮 助 CAO 把 握 机 会, 创 造 价 值 集 团 会 继 续 打 造 全 球 航 油 供 应 与 贸 易 网 络, 拓 展 航 油 供 应 与 贸 易 业 务, 包 括 在 中 国 大 陆 以 外 更 多 机 场 拓 展 航 空 市 场 营 销 业 务 在 稳 健 的 风 险 管 理 实 践 和 控 制 下, 集 团 会 继 续 执 行 其 他 油 品 的 多 元 化 战 略, 尤 其 是 顺 应 市 场 趋 势, 为 燃 料 油 业 务 打 造 结 构 性 优 势 集 团 会 专 注 于 长 期 战 略, 确 保 稳 定 可 持 续 的 增 长 CAO 也 会 积 极 寻 找 机 会 投 资 有 协 同 性 的 战 略 油 品 资 产 或 业 务 板 块, 以 并 购 的 方 式, 实 现 跨 越 式 发 展, 推 动 实 现 公 司 的 愿 景 使 命 和 战 略 目 标, 成 为 全 球 一 流 的 运 输 燃 料 一 体 化 方 案 提 供 商 致 谢 我 谨 代 表 管 理 层 和 全 体 员 工, 感 谢 母 公 司 CNAF 和 大 股 东 BP 长 期 以 来 的 支 持, 也 诚 挚 感 谢 所 有 股 东 的 理 解 和 信 任 感 谢 兄 弟 单 位 中 国 航 空 油 料 有 限 责 任 公 司 供 应 商 贸 易 伙 伴 航 空 客 户 船 东, 以 及 其 他 商 业 伙 伴 的 支 持, 期 待 着 我 们 在 未 来 开 展 更 深 入 的 互 惠 合 作 感 谢 浦 东 航 油 管 输 公 司 新 源 公 司 和 OKYC 的 贡 献 感 谢 CAO 和 子 公 司 以 及 香 港 加 注 公 司 的 所 有 员 工, 如 果 没 有 你 们 的 付 出 和 坚 持,CAO 无 法 成 功 应 对 各 种 挑 战, 取 得 今 天 的 成 绩 最 后, 感 谢 所 有 关 心 和 支 持 CAO 的 各 界 朋 友, 也 希 望 可 以 继 续 得 到 你 们 的 支 持 我 对 公 司 的 前 景 充 满 信 心 我 相 信 在 股 东 的 持 续 支 持 和 董 事 会 的 卓 越 领 导 下, 我 们 会 齐 心 协 力, 知 难 而 进, 稳 中 求 进, 机 敏 应 对, 把 握 发 展 机 遇, 使 CAO 再 上 一 个 新 台 阶! 孟 繁 秋 首 席 执 行 官 / 执 行 董 事

38 36 China Aviation Oil (Singapore) Corporation Ltd Chief Executive Officer s Strategic Report Strategic Risks Review CAO recognises that effective risk management is key to the Group s continued growth and success as the sole importer of jet fuel to the civil aviation industry of China and the largest physical jet fuel trader in the Asia Pacific region. We have a risk management model designed to assist the Group in achieving its strategic objectives infusing risk recognition, evaluation and treatment into decision-making, thereby enhancing shareholder value through riskadjusted business decisions. At CAO, we have embedded strategic risk management into our critical decisionmaking processes and management decisions with regards to business strategy, investments and operations, noting that strategic risks may be near or long-term in nature and in some cases, be reflective of CAO s material sustainability issues. The following tables set out the key strategic risks over the long-term and near-term, details mitigation plans for CAO s sustainability development and how the respective risks link to our corporate strategy. STRATEGIC RISKS - HOW WE MANAGE LONG-TERM RISKS Risk Context Mitigation Link to strategy Strategic Growth Core CAO s vision is to be a competitive advantage in jet fuel supply and trading constantly innovating Exclusive importer of jet fuel to China Jet fuel supply and trading remains our dominant business. As the sole importer of jet fuel to the civil aviation industry of China, the Group is susceptible to changing demand and supply dynamics in China. CAO s exclusive import rights into China provides the Group competitive advantages, loss of it through market liberalisation or regulatory changes could materially impact CAO s market share and financial performance. CAO is building jet fuel supply and trading network globally to diversify its geographic base and extend its global presence and value chain with synergistic businesses such as aviation marketing. CAO has also diversified into other oil products and while the bottomline contribution of other oil products may currently be limited and volatile, total supply and trading volume of the Group reached new highs with its diversification strategy. The Group continues to build structural advantages for its businesses by building an integrated value chain. CAO has increased its portfolio strengths through both geographic and product diversification. Extending its jet fuel trading activities and international aviation marketing business beyond China through its global supply and trading network, revenues from ex-china markets have increased from 20% in 2010 to 47.5% in CAO will further develop and optimise its trading structure for new markets. global top-tier integrated transportation fuels provider, and its 2020 strategy toward sustainable growth is based on the following objectives: - A global leader in international aviation oil supply and trading, a strong competitor in global supply and trading of other oil products, with a focus on transportation fuels. - An important player in international aviation fuel services - A niche market player in future clean transport fuels. These are underpinned by strategic imperatives of establishing a global aviation fuel supply and trading network, developing structural advantages for other oil products and clean energy, as well as asset investments to create enddemand, optimise logistics and secure resources.

39 Annual Report Risk Context Mitigation Link to strategy Human Resources Management expertise and trading capabilities may need further enhancement to manage increasingly international operations Operational A major safety, health or environmental ( SHE ) incident or liability Supply disruption To develop trading capabilities to meet our growth ambitions as an international company, CAO needs to recruit and retain qualified traders and mid/back office support personnel as well as seasoned managers to originate and execute major projects. As a global oil products supplier and trader, our facilities and their respective operations are subject to various risks including fires, explosions, leaks and other industry-related incidents. We remain committed to safe operations with zero harm to people and the environment being a responsible and accountable corporate citizen. Our aviation fuel delivery to end-receivers in China and various overseas airports is subject to supply continuity risks (safety, quality, on-time delivery). The development of management and trading capabilities within CAO is an integral part of our human resources strategy. CAO s learning strategy balances standardised curriculum-based learning with onthe-job application to achieve a culture of life-long learning. We also attract and retain talents by offering short-term and long-term incentive packages and personalised career development plans. We have strict operations manual and performance targets, and adhere to global and local industrial SHE standards wherever our business is conducted. We regularly update and train our staff on key SHE requirements and carry out internal and external audits to ensure compliance. We have strict performance targets to ensure security of supply: - We strategically deploy storage sites and time charters close to our demand centres to enhance supply continuity. - We proactively maintain close working relationships with our end users and customers to better cope with any of their short-notice requirement changes. - We have contingency back-up plans in the event of any supply emergencies. With our global trading network, we continue to build a diverse supplier base to mitigate any shortfall in any single supplier. One of CAO s corporate missions: - Create a people-oriented corporate culture of Fairness, Integrity, Innovation and Transparency where our people can grow and develop together with the Company One of CAO s corporate missions: - Operate in a safe, reliable, efficient and environmentally sound environment, maintaining high SHE standards

40 38 China Aviation Oil (Singapore) Corporation Ltd Chief Executive Officer s Strategic Report Strategic Risks Review Risk Context Mitigation Link to strategy Regulatory Noncompliance with applicable laws, regulations and standards Authorities globally are intensifying efforts to enforce compliance with laws, and are focused on anti-competitive behavior in particular. Various jurisdictions have specialised legislation aimed at combating corruption and companies found guilty of contraventions face fines and damage to their reputations. Tax laws are also becoming increasingly complex, as are sanctions against certain jurisdictions. We have centralised risk management and governance structure with systems and processes in place to ensure compliance with legal and regulatory matters wherever we operate. We also set up legal and compliance as two independent departments. We also focus on identifying changes in the regulatory landscape that pose implications for the Group, ensuring that we are prepared to respond to these changes. Compliance is an integral part of our corporate strategy. CAO will consistently uphold high levels of corporate governance and undertake strategic initiatives to further enhance compliance and governance across its businesses. Financial CAO s business sustainability and strategy has been developed to mitigate macroeconomic risks As the Group continues to globalise its operations and investments across multiple jurisdictions, it faces risk of failure to comply with local, national and regional laws and regulations China s economic slowdown and domestic refining capacity may have an impact on aviation fuel import requirements, resulting in reduced imports of jet fuel into China for the Group. Our aviation marketing and airport supply to airlines as well as other oil products trading are sensitive to global economic performance. Oil price fluctuation has implications on the profitability of our main associates and the development of clean energy in the short-term. CAO has taken various measures to comply with sanctions legislation. CAO focuses on expanding its global supply and trading network to capture more trading opportunities from global oil trade flows. Structural shift in global oil markets present opportunities which CAO is poised to seize via its international operations even as it looks to asset investments to enhance the Group s structural advantages. We focus on providing high quality integrated fuel services to our airline customers and help associate companies develop core competencies to better respond to oil price volatility. We have developed plans for clean energy to gain a first movers advantage to grow our business in the long-term. As part of developing CAO s long-term strategy, we review long-term macroeconomic and supply and demand dynamics on an ongoing basis, as well as the competitive landscape likely to influence our markets in the future, to ensure that our business strategies take them into account. Globalisation, integration, and diversification are business strategies paramount to CAO s overarching strategy which is reviewed and fine-tuned on an ongoing basis according to market dynamics. Our diversification strategy has resulted in a diversified product base, a diversified customer base, a diversified supply base as well as geographic diversification which generates multiple sources of income.

41 Annual Report STRATEGIC RISKS - HOW WE MANAGE NEAR-TERM RISKS CAO enhanced its near-term risk management process in FY2015, which seeks to address matters of immediate concern likely to impact the Group s common objectives, strategy and growth targets during the year. In identifying these near-term issues, we ensure that pertinent implications of policy and regulatory changes as well as socioeconomic and reputational drivers are properly understood. CAO seeks to take proactive steps to limit the possibility that a particular issue becomes a long-term risk or material sustainability issue for the Group. Top issues impacting our business CAO s response to the changes in the fuel landscape New/clean energy will become increasingly relevant in the long run. CAO s longterm strategy therefore covers future clean transportation fuels - Long-term: A niche market player in future clean transportation fuels - Short/Medium-term: Develop plan and trial operations for specific clean transportation fuels. Heavy reliance on aviation fuel - Long-term: A strong competitor in global supply and trading of other oil products, with a focus on transport. Maintain our global leading position in aviation fuel. - Short/Medium-term: Trading and Business Development teams exploring and building structural advantages for non-jet fuel products. Develop other aviation related services to better meet our aviation customers needs. - Product diversification strategy has been implemented. Today, CAO has abilities to trade and participate in other oil products such as fuel oil and avgas. CAO trading bench CAO 贸 易 团 队

42 40 China Aviation Oil (Singapore) Corporation Ltd 首 席 执 行 官 战 略 报 告 战 略 风 险 回 顾 作 为 中 国 独 家 航 油 供 应 商 和 亚 太 地 区 最 大 航 油 实 货 供 应 商,CAO 认 为 有 效 的 风 险 管 理 是 集 团 持 续 发 展 和 成 功 的 关 键 我 们 的 风 险 管 理 系 统 可 以 协 助 公 司 在 进 行 决 策 时, 识 别 评 估 风 险, 进 而 规 避 风 险, 实 现 战 略 目 标, 提 高 股 东 价 值 我 们 在 进 行 有 关 业 务 战 略 投 资 和 运 作 的 决 策 中, 实 施 战 略 风 险 管 理, 因 为 战 略 风 险 可 能 是 短 期 或 长 期 风 险, 某 些 时 候 反 映 出 CAO 的 重 大 可 持 续 性 问 题 下 表 列 出 了 CAO 在 追 求 可 持 续 发 展 过 程 中 所 面 对 的 长 期 与 短 期 战 略 风 险 应 对 措 施 以 及 它 们 与 公 司 战 略 的 关 系 战 略 风 险 我 们 如 何 管 理 长 期 风 险 战 略 发 展 风 险 说 明 应 对 措 施 和 战 略 的 联 系 航 油 供 应 与 贸 易 的 核 心 竞 争 力 中 国 独 家 航 油 供 应 商 航 油 供 应 与 贸 易 业 务 仍 占 主 导 地 位 作 为 中 国 独 家 航 油 进 口 商, 集 团 受 到 中 国 供 需 关 系 变 化 的 影 响 中 国 的 独 家 进 口 权 为 CAO 提 供 了 竞 争 优 势, 如 果 国 内 市 场 开 放 或 政 策 改 变 导 致 CAO 丧 失 中 国 独 家 进 口 权,CAO 的 市 场 份 额 以 及 盈 利 能 力 将 受 到 严 重 影 响 CAO 打 造 航 油 供 应 与 贸 易 的 全 球 业 务 网 络, 在 全 球 多 个 地 区 发 展 业 务, 增 强 国 际 影 响 力, 并 延 伸 供 应 链, 如 开 展 航 空 市 场 营 销 业 务, 实 现 协 同 价 值, 同 时 开 展 其 他 油 品 业 务 虽 然 现 在 其 他 油 品 的 利 润 贡 献 可 能 有 限 且 不 稳 定, 集 团 的 供 应 与 贸 易 总 量 在 多 元 化 战 略 的 指 导 下 达 到 新 高 集 团 将 继 续 打 造 一 体 化 价 值 链 和 结 构 性 优 势 CAO 已 经 通 过 地 理 拓 展 和 产 品 多 元 化 战 略 增 强 了 业 务 能 力 在 中 国 以 外 地 区, 借 助 全 球 网 络, 开 展 航 油 贸 易 业 务 和 航 油 营 销 业 务, 中 国 以 外 地 区 贡 献 的 收 入 比 例 从 2010 年 的 20% 增 至 2015 年 的 47.5% 我 们 将 进 一 步 优 化 新 市 场 的 贸 易 结 构 和 国 际 贸 易 网 络 CAO 的 2020 年 战 略 确 定 公 司 的 愿 景 是 : - 成 为 有 创 新 精 神 的 全 球 一 流 的 运 输 燃 料 一 体 化 方 案 提 供 商 战 略 目 标 包 括 以 下 几 个 方 面 : - 全 球 领 先 的 国 际 航 油 供 应 和 贸 易 商, 全 球 知 名 的 其 他 油 品 供 应 与 贸 易 商, 专 注 于 运 输 燃 料 - 重 要 的 国 际 机 场 供 油 服 务 商 - 具 有 独 特 优 势 的 未 来 清 洁 运 输 燃 料 的 市 场 参 与 者 为 了 实 现 公 司 愿 景 和 达 成 上 述 目 标, 需 要 建 立 全 球 航 油 供 应 与 贸 易 网 络 打 造 其 他 油 品 与 清 洁 能 源 的 结 构 性 优 势, 通 过 实 业 投 资 创 造 需 求 优 化 物 流 保 障 资 源 人 力 资 源 需 要 进 一 步 提 升 管 理 与 贸 易 能 力, 管 理 日 渐 全 球 化 的 运 作 为 了 成 长 为 一 家 全 球 性 企 业, 需 要 增 强 贸 易 能 力, 招 聘 并 留 住 有 能 力 的 贸 易 员 中 / 后 台 员 工 和 经 验 丰 富 的 经 理 来 发 起 和 执 行 重 大 项 目 CAO 管 理 与 贸 易 能 力 的 发 展 是 人 力 资 源 战 略 的 重 要 部 分 CAO 的 持 续 学 习 战 略 包 括 标 准 课 程 项 目 和 在 职 培 训 我 们 还 通 过 短 期 和 长 期 激 励 措 施 和 个 性 化 职 业 发 展 规 划 来 吸 引 和 留 住 员 工 CAO 的 企 业 使 命 之 一 是 以 人 为 本, 培 育 以 公 平 诚 信 创 新 透 明 为 核 心 的 企 业 文 化, 使 员 工 与 公 司 共 同 发 展

43 Annual Report 风 险 说 明 应 对 措 施 和 战 略 的 联 系 运 作 重 大 的 安 全 健 康 或 环 境 ( SHE ) 事 故 或 责 任 供 应 中 断 作 为 全 球 油 品 供 应 与 贸 易 商, 我 们 的 设 施 与 相 应 运 作 可 能 会 引 起 火 灾 爆 炸 泄 露 和 其 他 事 故 我 们 致 力 于 安 全 的 运 作, 不 对 人 和 环 境 造 成 任 何 损 害, 成 为 负 责 任 的 企 业 公 民 向 中 国 用 户 和 海 外 机 场 的 航 油 供 应 可 能 会 面 临 供 应 中 断 风 险 ( 安 全 质 量 船 期 ) 我 们 有 严 格 的 运 作 手 册 和 业 绩 目 标, 在 开 展 业 务 的 各 地 坚 守 国 际 与 本 地 的 行 业 SHE 标 准 我 们 定 期 向 员 工 通 报 关 键 的 SHE 要 求 和 更 新, 通 过 内 审 和 外 审 确 保 合 规 我 们 为 供 应 安 全 设 置 了 严 格 的 绩 效 目 标 我 们 在 需 求 中 心 附 近 有 储 罐 资 产, 期 租 油 船, 确 保 供 应 我 们 与 用 户 保 持 密 切 的 关 系, 更 好 处 理 需 求 的 临 时 变 化 我 们 也 有 应 急 计 划 应 对 供 应 危 机 公 司 使 命 之 一 是 确 保 运 营 环 境 安 全 可 靠 高 效 环 保, 坚 持 SHE 高 标 准 法 律 法 规 违 反 适 用 法 律 法 规 与 标 准 的 风 险 全 球 各 地 在 加 强 法 律 管 制, 尤 其 是 反 竞 争 行 为 不 同 地 区 有 打 击 腐 败 的 专 门 立 法, 违 法 企 业 将 面 临 罚 款 和 声 誉 危 机 不 同 地 区 的 税 务 法 律 和 制 裁 也 更 加 复 杂 在 全 球 贸 易 网 络 的 支 持 下, 我 们 会 与 多 个 供 应 商 保 持 合 作 关 系, 规 避 单 个 供 应 商 的 潜 在 风 险 我 们 具 备 集 中 的 风 险 管 理 和 治 理 框 架, 分 别 建 立 了 法 律 和 合 规 部 门 其 中 的 系 统 和 流 程 可 以 确 保 公 司 在 各 个 业 务 地 区 遵 守 法 律 和 法 规 我 们 还 注 重 识 别 对 集 团 产 生 影 响 的 法 规 变 化 并 合 理 应 对 合 法 合 规 是 战 略 的 重 要 内 容 之 一 公 司 始 终 秉 承 高 标 准 的 公 司 治 理, 采 取 战 略 措 施 进 一 步 加 强 合 规 和 治 理 财 务 业 绩 CAO 已 经 制 定 了 业 务 持 续 和 发 展 战 略, 应 对 宏 观 经 济 风 险 随 着 业 务 与 投 资 活 动 的 全 球 化, 面 临 更 多 当 地 法 律 国 家 法 律 和 地 区 法 律 法 规 的 合 规 风 险 中 国 经 济 放 缓 和 国 内 产 能 可 能 会 影 响 航 油 进 口 需 求, 减 少 集 团 向 中 国 进 口 航 油 的 机 会 我 们 的 航 油 营 销 机 场 供 应 其 他 油 品 贸 易 受 全 球 经 济 的 影 响 油 价 波 动 影 响 联 营 公 司 的 盈 利 和 清 洁 能 源 在 短 期 的 发 展 CAO 已 经 采 取 多 种 措 施 确 保 遵 守 制 裁 法 律 CAO 专 注 于 打 造 全 球 供 应 与 贸 易 链, 从 全 球 贸 易 流 中 把 握 贸 易 机 会 全 球 油 品 市 场 的 结 构 变 化 给 CAO 带 来 了 机 遇,CAO 也 将 通 过 资 产 投 资 加 强 结 构 性 优 势 我 们 致 力 于 向 航 空 公 司 客 户 提 供 高 质 量 的 一 体 化 服 务, 帮 助 联 营 公 司 打 造 核 心 竞 争 力, 更 好 应 对 油 价 波 动 我 们 已 经 制 定 了 清 洁 能 源 的 发 展 计 划, 为 业 务 的 长 期 发 展 提 前 做 好 准 备 在 多 元 化 战 略 的 指 导 下,CAO 已 经 实 现 了 产 品 多 元 化 客 户 多 元 化 供 应 多 元 化 和 地 理 多 元 化, 带 来 多 元 化 收 入 来 源 作 为 CAO 长 期 战 略 的 一 部 分, 我 们 会 持 续 回 顾 未 来 可 能 会 影 响 我 们 的 因 素, 确 保 我 们 的 战 略 考 虑 了 长 期 宏 观 经 济 供 需 关 系 竞 争 格 局 全 球 化 一 体 化 和 多 元 化 战 略 是 CAO 整 体 战 略 至 关 重 要 的 一 部 分, 我 们 会 根 据 市 场 情 况 持 续 回 顾 与 完 善

44 42 China Aviation Oil (Singapore) Corporation Ltd 首 席 执 行 官 战 略 报 告 战 略 风 险 回 顾 战 略 风 险 我 们 如 何 管 理 短 期 风 险 2015 年,CAO 强 化 了 短 期 风 险 管 理 流 程, 以 此 应 对 可 能 会 影 响 集 团 一 般 目 标 战 略 与 增 长 目 标 的 短 期 问 题 在 此 过 程 中, 我 们 确 保 正 确 理 解 了 政 策 法 规 的 变 化 社 会 经 济 以 及 声 誉 情 况 CAO 将 努 力 避 免 某 个 问 题 成 为 长 期 风 险, 对 集 团 的 可 持 续 发 展 产 生 严 重 影 响 影 响 业 务 的 主 要 问 题 CAO 应 对 油 品 格 局 变 化 的 能 力 长 期 来 看, 新 能 源 / 清 洁 能 源 的 重 要 性 会 不 断 增 加 CAO 的 长 期 战 略 包 括 未 来 清 洁 运 输 能 源 - 长 期 : 成 为 具 有 独 特 优 势 的 未 来 清 洁 运 输 燃 料 供 应 与 贸 易 商 - 中 短 期 : 制 定 特 定 清 洁 运 输 燃 料 的 发 展 计 划 和 试 行 方 式 CAO 对 航 油 的 严 重 依 赖 - 长 期 : 全 球 其 他 油 品 ( 专 注 运 输 燃 料 ) 供 应 与 贸 易 的 强 有 力 竞 争 者 保 持 航 油 的 全 球 领 先 地 位 - 中 短 期 : 贸 易 与 业 务 发 展 团 队 为 非 航 油 产 品 打 造 结 构 性 优 势 发 展 其 他 航 油 相 关 服 务, 更 好 满 足 客 户 需 求 CAO 应 对 油 品 市 场 波 动 和 艰 难 的 贸 易 环 境 的 能 力 - 实 施 了 产 品 多 元 化 战 略 如 今 CAO 有 能 力 进 行 其 他 油 品 贸 易 ( 如 燃 料 油 和 航 汽 ) - 继 续 优 化 现 有 结 构, 创 造 需 求 中 心, 通 过 航 空 市 场 营 销 和 资 产 投 资, 在 动 荡 的 贸 易 环 境 中 优 化 航 煤 与 其 他 油 品 的 贸 易 结 构 - 寻 找 有 稳 定 回 报 的 资 产 投 资 机 会, 进 一 步 拓 展 收 入 来 源 - 加 强 CAO 全 球 化 和 一 体 化 价 值 链, 开 展 新 业 务, 进 入 新 市 场 Jet fuel discharging from vessel at port 港 口 卸 油

45 Annual Report Chief Executive Officer s Strategic Report Audit and Internal Control Internal controls provide assurance that business processes operate effectively and efficiently and help to manage corresponding business and strategic risks. At CAO, an overarching internal controls assurance framework has been established to guide operations at CAO and its subsidiaries, promoting the following key areas to oversee the effective design and operations of internal controls, management assurance and internal audit. MANAGEMENT ASSURANCE An integrated organisational model is adopted whereby the Board determines the overall strategic direction of the Group while the CEO is responsible for implementing the Group s strategy which is collectively supported by the employees. Detailed reports on operations are submitted to the Board and Board committees on a regular basis for evaluation and assessment to highlight key performance results and trends that may affect the operations of the Group as well as enforce corporate governance practices to ensure compliance and protect the interests of minority shareholders. Clear job descriptions focusing on qualifications and capabilities of staff have been established to better ensure that roles are filled by appropriate staff with the right skill sets. Reporting lines for functional departments have also been designed to require strong and ongoing check and balances such as independent risk management and internal audit functions. A comprehensive set of Standard Operating Procedures ( SOPs ) has also been established to ensure governance of all business activities and processes within the organisation. As key management tools used to promote quality through consistent implementation of a process or procedure within the organisation, SOPs are periodically reviewed by auditors for compliance with organisational and regulatory requirements where appropriate. The Group recognises the potential strategic, operational, financial and reputational risks associated with business interruptions and the importance of maintaining viable capability to continue the company s business processes with minimum impact in the event of an emergency. A Business Continuity Policy ( BCP ) has been adopted to define the principles and framework necessary to ensure effective emergency response, resumption and recovery of business functions and processing resources in a timely manner coupled with well-defined communication channels among key management and staff to address emergency response during any business interruption event. The BCP exercise is conducted at a disaster recovery site on an annual basis with any significant shortcomings identified, communicated and improved upon in subsequent exercises. Quarterly written assurances on the proper functioning of respective operating processes are provided by management including highlights of any significant deficiencies, for immediate attention. INTERNAL AUDIT Reporting directly to the CEO, the Head of Audit and Internal Control ( AIC ) may also report directly to the Audit Committee for important matters. Assisted by a team of qualified professionals from an international auditing firm, the AIC Head adopts a risk-based approach in formulating the audit plan that aligns its activities to the key risks across the Group s business. This plan is annually reviewed and approved by the Audit Committee. The AIC department assists the Audit Committee and the Board by conducting periodic evaluations on the Group s internal controls, financial and accounting matters, compliance and business policies and procedures to ensure that internal controls are adequate to meet the Group s requirements and are consistent with the best corporate governance practices. It also reviews interested person transactions for compliance on a quarterly basis and prepares audit reports and recommendations for improvement following each audit and ensures that appropriate measures are then taken to implement such recommendations. Status reports on management s action plans are presented to the Audit Committee regularly to track for timely implementation and audit closure. CAO commissions a biennial review by an independent external reviewer using the Committee of Sponsoring Organisations ( COSO ) framework to assess the proper functioning of the overall internal control system. Serving as a reference, the review focuses on the key elements of the internal control system such as risk management processes, board practices and accounting and reporting systems. CAO s ongoing conformance to the COSO internal control framework further strengthens CAO s internal control objectives for its globalised operations.

46 44 China Aviation Oil (Singapore) Corporation Ltd 首 席 执 行 官 战 略 报 告 审 计 与 内 部 控 制 内 部 控 制 可 以 确 保 业 务 流 程 高 效 及 有 效 运 作, 帮 助 管 理 相 应 的 业 务 和 战 略 风 险 CAO 制 定 了 内 部 控 制 框 架, 指 导 CAO 与 各 子 公 司 的 运 营, 重 点 关 注 以 下 几 个 关 键 领 域, 监 督 内 部 控 制 的 有 效 设 计 与 运 营 管 理 保 障 和 内 部 审 计 管 理 保 障 CAO 采 纳 了 一 体 化 的 业 务 模 式, 董 事 会 确 定 集 团 整 体 战 略 方 向,CEO 带 领 全 体 员 工 实 施 集 团 战 略 董 事 会 和 董 事 委 员 会 将 定 期 审 阅 和 评 估 经 营 报 告, 其 中 包 括 主 要 经 营 业 绩 影 响 公 司 运 营 的 趋 势 和 公 司 治 理 情 况, 确 保 合 规, 避 免 损 害 小 股 东 利 益 职 位 描 述 对 员 工 的 资 历 和 能 力 做 出 清 楚 要 求, 确 保 员 工 发 挥 所 长, 各 尽 其 用 我 们 也 会 持 续 检 查 不 同 部 门 的 汇 报 途 径, 如 风 险 管 理 部 和 内 部 审 计 部 CAO 建 立 了 一 系 列 标 准 操 作 流 程 ( SOPs ), 指 导 公 司 内 所 有 的 业 务 活 动 与 流 程 SOPs 是 重 要 的 管 理 工 具, 在 集 团 内 部 实 施 一 致 的 流 程 或 程 序 可 以 帮 助 提 高 业 务 质 量 审 计 师 会 定 期 回 顾 SOPs, 确 保 符 合 公 司 规 定 和 相 关 法 规 集 团 认 识 到 业 务 中 断 会 带 来 潜 在 的 战 略 运 作 财 务 和 声 誉 风 险, 也 了 解 公 司 在 紧 急 情 况 下 保 持 稳 定 运 作 的 重 要 性 公 司 制 定 了 业 务 持 续 计 划 ( BCP ), 确 定 了 原 则 和 框 架, 确 保 有 效 应 对 紧 急 情 况, 及 时 恢 复 业 务 运 转, 及 时 利 用 资 源, 同 时 保 证 管 理 层 和 员 工 的 有 效 沟 通, 尽 量 减 少 紧 急 情 况 对 业 务 流 程 的 干 扰 CAO 每 年 在 设 有 临 时 备 份 的 应 急 地 点 进 行 业 务 持 续 计 划 演 习, 总 结 与 通 报 显 著 缺 陷, 在 下 一 次 演 习 中 进 行 改 善 每 季 度, 管 理 层 还 会 为 操 作 流 程 的 有 效 运 行 提 供 书 面 确 认, 包 括 通 报 明 显 的 缺 陷, 立 即 引 起 重 视 内 部 审 计 审 计 与 内 部 控 制 部 ( AIC ) 主 管 直 接 向 CEO 汇 报, 如 有 重 要 事 项, 也 可 以 直 接 汇 报 审 计 委 员 会 在 国 际 审 计 公 司 经 验 丰 富 的 团 队 的 协 助 下,AIC 主 管 会 基 于 集 团 业 务 风 险, 制 定 内 审 方 案, 每 年 由 审 计 委 员 会 审 阅 批 准 AIC 部 门 协 助 审 计 委 员 会 和 董 事 会, 定 期 审 查 公 司 的 内 控 财 务 和 会 计 事 宜 合 规 业 务 政 策 与 流 程, 确 保 现 有 的 政 策 满 足 公 司 需 求, 符 合 业 内 最 佳 的 公 司 治 理 实 践 AIC 部 门 还 会 每 季 度 审 查 关 联 交 易 是 否 符 合 合 规, 制 定 审 计 报 告 和 改 进 建 议, 确 保 改 进 建 议 得 到 实 施, 实 施 进 度 也 会 定 期 呈 交 给 审 计 委 员 会, 检 查 完 成 进 度 半 年 度 内 控 系 统 全 面 回 顾 CAO 聘 请 独 立 外 部 顾 问, 参 照 全 美 反 舞 弊 性 财 务 报 告 委 员 会 发 起 组 织 ( COSO ) 框 架, 对 整 体 内 控 系 统 的 运 行 有 效 性 进 行 半 年 回 顾 回 顾 重 点 为 风 险 管 理 流 程 董 事 会 流 程 和 会 计 报 告 系 统 此 举 将 进 一 步 强 化 CAO 全 球 业 务 的 内 部 控 制 TSN-PEKCL Pipeline s control room operations 天 津 管 输 公 司 监 控 室 运 作

47 Annual Report Chief Executive Officer s Strategic Report Operations Review MIDDLE DISTILLATES JET FUEL & GAS OIL In 2015, oil prices fell to eleven-year lows and Brent oil price declined to a low of US$36 per barrel during the year. Oil market fundamentals continued to be in oversupply, even as the global economy became increasingly volatile and uncertain with the slowdown in emerging economies and China s slower rate of growth raising concerns of a global economic slowdown. During the year, strong gasoline demand supported its cracking margin and this, together with increased refining capacity from the East and the Arabian Gulf led to a fundamentally oversupplied middle distillates market. The middle distillates team focused on building global trading activities, leveraging on CAO s jet fuel demand in Los Angeles and successfully delivered sizeable physical jet fuel cargoes from Asia to Los Angeles. For a first time, CAO also exported jet fuel from China to Los Angeles, seizing market opportunities as China transformed itself from an oil import country to an oil export country. Leveraging on its global supply and trading network, the middle distillates team actively developed and captured demands in overseas markets in line with China s development as an oil export nation and successfully exported Chinese jet fuel cargoes to the Philippines. With the increased business opportunities, the middle distillates team achieved good trading profit through efficient storage and logistics optimisation as well as through executing effective hedging strategies. With the poor economic outlook ahead and expectations that jet fuel and gasoil markets will continue to be in oversupply, the middle distillates team will focus on enlarging and strengthening its global trading network through consolidating & optimising resources and aggressively developing & penetrating new demand markets. AVIATION MARKETING In 2015, transportation operators notably the commercial airline industry saw a marked improvement in their financial results driven by lower operating cost as jet fuel prices slumped to its lowest in 11 years. Despite the slowing global economy due in part by China s slower rate of growth, global air traffic remained robust by historical standards. With the low oil price auguring well for the commercial airline industry, commercial airline fleet is forecast to increase by over 900 aircraft to 28,000 aircraft by 2016 according to industry sources. This bodes well for CAO s aviation marketing business which in 2015, continued to extend its international presence and penetrated strategic markets covering the major regions of Asia Pacific, USA, Europe and the Middle East. By leveraging on its core competencies in jet fuel supply and trading, CAO Group increased the volume of jet fuel supplied to airlines at international airports by 32% and expanded the supply network from 34 to 38 international airports outside mainland China. During the year, CAO continued to strengthen its participation in the US airport fuel storage consortia and enhanced its supply capability in the US markets, supplying to both Chinese and international airlines. Volumes supplied to non-chinese carriers doubled even as CAO maintained its leading position as the largest overseas supplier by volume to the three large Chinese carriers namely Air China, China Eastern Airlines and China Southern Airlines. This validates CAO s international branding as a professional jet fuel supplier in overseas markets. CAO s aviation marketing arm will continue to expand its presence to new markets in line with its overarching 2020 strategy, focusing on critical supply chain and inventory management as well as seek collaboration with strategic partners to expand its supply network to become an important, reliable and long-term fuel supplier to the airline industry. AVGAS In 2015, CAO s avgas business grew rapidly and expanded to India, Indonesia, Saudi Arabia and China. Total avgas supply volume in 2015 increased substantially compared to Apart from fulfilling its role as a key supplier to China, CAO s avgas team will continue to develop & enter new demand markets by leveraging on its integrated global value chain. FUEL OIL In 2015, fuel oil supply and demand were imbalanced with overall supply surpassing demand for most parts of the year. Supported by the low oil prices however, Singapore bunker sales volume increased 6.5% to 45.2 million metric tonnes and CAO s fuel oil team seized the resulting market opportunities. By focusing on physical cargo and bunker ex-wharf trading around its storage, the fuel oil bench achieved its highest trading volume and profits in the Group s history. The fuel oil team will remain active in cargo and bunker trading and adopt flexible trading strategy to enhance the bench s profitability going forward.

48 46 China Aviation Oil (Singapore) Corporation Ltd Chief Executive Officer s Strategic Report Operations Review ASSOCIATED COMPANIES Shanghai Pudong International Airport Aviation Fuel Supply Company ( SPIA ) SPIA owns and operates all the refuelling facilities at Pudong Airport, including the hydrant system, dispenser fleet, refuelling stations, airport tank farm, storage terminal with total capacity of 140,000 m 3 and a 42- km dedicated jet pipeline connecting Pudong Airport to Waigaoqiao terminal. As the exclusive supplier of jet fuel at PRC s second largest airport Shanghai Pudong International Airport ( Pudong Airport ), SPIA provides jet fuel distribution and refuelling service to about 127 Chinese and foreign airlines operating at Pudong Airport. CAO owns a 33% stake in SPIA. The other two shareholders of SPIA are Shanghai International Airport Co., Ltd (40%) and Sinopec Assets Management Co. Ltd (27%). In 2015, SPIA continued to maintain high safety standards with zero accident, zero injury and zero pollution. Despite the challenging operating environment with sustained decline in oil prices, SPIA successfully maintained stable performance with its total refuelling volume increasing 8.6% over 2014 to 3.8 million tonnes. SPIA remains an important profit contributor to the CAO Group contributing US$38.9 million to CAO s share of profit from associates. SPIA is set to see further growth in refuelling volumes in view of expected tourism increase in Shanghai with the official opening of Shanghai Disneyland Park in June China National Aviation Fuel TSN-PEK Pipeline Transportation Corporation Ltd ( TSN-PEKCL ) Connecting Tianjin Nanjiang terminal with Beijing Capital International Airport and Tianjin Binhai International Airport, TSN-PEKCL s key asset is a 185-km long pipeline transporting the majority of jet fuel requirements of Beijing Capital International Airport and Tianjin Binhai International Airport ( the Pipeline ). The Pipeline is the longest multi-oil product pipeline with the biggest diameter and highest transfer volume in the PRC Civil Aviation industry. CNAF Logistics and CAO hold 51% and 49% equity stakes in TSN-PEKCL respectively. Jet fuel transportation volume of TSN-PEKCL achieved a record 2.8 million tonnes in 2015, an increase of 10% compared to This increase was mainly driven by higher air traffic turnover at Beijing Capital International Airport. As a result, the Group s share of profits from TSN-PEKCL increased 35.4% to US$2.2 million for FY2015. In terms of operational safety, TSN-PEKCL s facilities operated well and achieved the excellent record of zero error and zero pollution in The jet fuel transportation business for TSN-PEKCL is expected to be promising as jet fuel transportation volumes to Beijing Capital International Airport and Tianjin Binhai International Airport are set to further increase. Handling of oil storage tank valves 开 储 油 罐 阀 门

49 Annual Report Into-plane refuelling operations at Pudong Airport 浦 东 机 场 的 飞 机 加 注 服 务 China Aviation Oil Xinyuan Petrochemicals Co., Ltd ( Xinyuan ) Xinyuan is mainly engaged in the storage and trading of jet fuel and other oil products. Xinyuan owns a storage tank of 75,000 m 3 near Shuidong harbour located in the city of Maoming, Guangdong Province, PRC. Shenzhen Juzhengyuan Petrochemicals Co., Ltd, CAO and CNAF hold 60%, 39% and 1% equity stakes in Xinyuan respectively. Despite the challenges in the oil industry, Xinyuan expanded its business as well as explored new revenue growth opportunities in The Group s share of profits from Xinyuan in 2015 was US$0.7 million even as its Shuidong storage continued to achieve high safety standards by fully conducting comprehensive safety management measures on a regular basis. Oilhub Korea Yeosu Co., Ltd ( OKYC ) Oilhub Korea Yeosu Co., Ltd is CAO s joint investment with six other companies to develop and operate a storage capacity of 1.3 million m 3 for crude oil and oil products. CAO is the second largest shareholder (26%) of OKYC after Korea National Oil Corporation, which holds 29% of the total issued shares of OKYC. The remaining issued share capital is held by conglomerates such as Samsung C&T Corporation and LG International Corp. OKYC s operations maintained high safety standards in 2015 with zero accidents. Favourable market structure has enabled OKYC to successfully achieve high utilisation rate for the year with reputable oil companies and oil majors as its storage customers, accomplishing a profit for the first time since its commercial operation. CAO Group s share of profit from OKYC in 2015 was US$1.4 million. CNAF Hong Kong Refuelling Limited ( CNAF HKR ) CNAF HKR, a Hong Kong joint-venture company under CAO s wholly owned subsidiary, CAOHK, provides intoplane fuelling services at Hong Kong International Airport at Chek Lap Kok ( HKIA ). Shareholders of CNAF HKR include CAOHK, Shenzhen Cheng Yuan Aviation Oil Company, China United Petroleum (Holding) Company Limited and Cheer Luck Investment Limited. CAOHK holds 39% of the total issued shares of CNAF HKR, while the other three companies hold equity stakes of 37%, 14% and 10% respectively. CNAF HKR is the third licensed refueller to provide intoplane fuelling services at HKIA. With a site area of around 3,000 m 2, the refuelling station includes an administration office, scheduling office and a maintenance workshop fully equipped with dispensers and refuellers. CNAF HKR commenced operations on 1 August 2015.

50 48 China Aviation Oil (Singapore) Corporation Ltd 首 席 执 行 官 战 略 报 告 经 营 概 况 中 馏 分 航 油 和 柴 油 2015 年 油 价 跌 至 11 年 新 低, 布 伦 特 价 格 跌 至 36 美 元 每 桶 油 品 市 场 依 然 供 应 过 剩, 全 球 经 济 日 益 动 荡, 中 国 等 新 兴 经 济 体 放 缓 引 发 全 球 经 济 衰 退 的 恐 慌 2015 年, 汽 油 需 求 强 劲 支 撑 利 润 走 高, 东 部 国 家 与 海 湾 地 区 产 能 增 加, 造 成 中 馏 分 市 场 供 大 于 求 中 馏 分 团 队 借 助 洛 杉 矶 的 航 油 需 求, 进 行 全 球 贸 易, 成 功 将 航 油 从 亚 洲 运 至 洛 杉 矶, 还 首 次 将 中 国 航 油 出 口 至 洛 杉 矶, 把 握 中 国 从 油 品 进 口 国 向 油 品 出 口 国 的 转 变 中 出 现 的 市 场 机 遇 通 过 全 球 供 应 和 贸 易 网 络, 中 馏 分 团 队 牢 牢 把 握 海 外 市 场 需 求, 成 功 将 航 油 出 口 至 菲 律 宾 随 着 业 务 机 会 的 增 加, 中 馏 分 团 队 通 过 有 效 的 储 存 和 物 流 优 化, 执 行 套 保 策 略, 取 得 较 高 的 贸 易 利 润 经 济 前 景 不 甚 乐 观, 预 计 航 油 和 柴 油 市 场 将 继 续 保 持 供 应 过 剩 的 局 面, 中 馏 分 团 队 会 继 续 专 注 拓 展 全 球 贸 易 网 络, 整 合 优 化 资 源, 积 极 进 入 新 市 场 航 空 市 场 营 销 2015 年, 运 输 业 尤 其 是 商 业 航 空 业 绩 明 显 改 善, 这 主 要 归 功 于 航 油 价 格 降 幅 超 50%, 创 11 年 最 低, 而 航 油 费 用 占 航 空 公 司 运 营 成 本 的 很 大 一 部 分 尽 管 中 国 经 济 放 缓 带 动 全 球 经 济 增 长 放 缓, 国 际 航 空 运 输 的 表 现 仍 高 于 历 史 水 平 油 价 下 跌 对 商 业 航 空 明 显 利 好, 根 据 行 业 机 构 预 测, 商 业 航 空 在 2016 年 增 加 900 架 飞 机, 使 行 业 运 营 的 飞 机 数 达 到 28,000 架 这 也 印 证 了 CAO 航 空 市 场 营 销 业 务 在 2015 年 的 发 展 继 续 拓 展 国 际 市 场, 深 入 在 战 略 市 场 的 渗 透 核 心 战 略 市 场 包 括 美 国 欧 洲 亚 太 和 中 东 的 重 要 地 区 CAO 集 团 通 过 其 在 航 油 供 应 与 贸 易 领 域 的 优 势,2015 年 对 航 空 公 司 在 中 国 大 陆 以 外 的 国 际 机 场 供 应 量 增 加 32%, 将 中 国 大 陆 以 外 的 国 际 供 应 网 络 从 34 个 机 场 拓 展 至 38 个 机 场 2015 年,CAO 也 继 续 巩 固 了 在 美 国 机 场 的 业 务, 提 升 了 在 美 国 市 场 对 中 国 和 国 际 航 空 公 司 的 供 应 能 力 对 外 航 的 供 应 量 翻 番 的 同 时,CAO 仍 保 持 中 国 三 大 航 空 公 司 ( 国 航 东 航 南 航 ) 在 海 外 领 先 供 应 商 的 地 位 这 些 成 绩 进 一 步 加 强 了 CAO 在 海 外 市 场 专 业 航 油 供 应 商 的 品 牌 形 象 CAO 航 空 市 场 营 销 业 务 将 继 续 按 照 2020 战 略, 推 动 新 市 场 拓 展, 发 展 的 重 点 是 核 心 供 应 链 和 库 存 管 理, 与 战 略 伙 伴 合 作 扩 展 供 应 网 络, 成 为 航 空 业 长 期 可 靠 的 航 油 供 应 商 航 汽 2015 年,CAO 航 汽 业 务 快 速 发 展, 覆 盖 印 度 印 尼 沙 特 阿 拉 伯 和 中 国 2015 年 航 汽 供 应 量 同 比 激 增 除 了 供 应 中 国, 航 汽 团 队 会 继 续 利 用 一 体 化 全 球 价 值 链 进 入 新 市 场 燃 料 油 2015 年 大 多 数 时 候 燃 料 油 市 场 供 大 于 求 在 低 油 价 的 支 撑 下, 新 加 坡 船 用 燃 料 油 业 务 量 增 加 6.5% 至 4520 万 吨, 燃 料 油 团 队 把 握 市 场 机 会, 利 用 储 罐, 通 过 码 头 交 货 模 式 进 行 实 货 贸 易, 实 现 了 集 团 历 史 上 最 高 的 贸 易 量 和 利 润 燃 料 油 团 队 会 继 续 积 极 发 展 实 货 和 船 用 燃 料 油 贸 易, 采 取 灵 活 贸 易 战 略, 加 强 燃 料 油 板 块 的 盈 利 能 力 联 营 公 司 上 海 浦 东 国 际 机 场 航 空 油 料 有 限 责 任 公 司 ( 浦 东 航 油 ) 浦 东 航 油 拥 有 并 经 营 浦 东 机 场 全 部 加 油 设 施, 包 括 全 套 机 坪 管 网 管 线 加 油 车 队 和 罐 式 加 油 车 队 航 空 加 油 站 机 场 内 油 库 总 库 容 量 达 14 万 立 方 米 的 码 头 油 库 以 及 连 接 浦 东 机 场 与 外 高 桥 码 头 的 42 公 里 专 用 航 油 管 线 作 为 中 国 第 二 大 机 场 上 海 浦 东 国 际 机 场 ( 浦 东 机 场 ) 的 唯 一 航 油 供 应 商, 浦 东 航 油 向 在 浦 东 机 场 运 营 的 约 127 家 中 国 及 其 他 国 家 的 航 空 公 司 提 供 销 售 和 加 注 航 油 服 务 CAO 拥 有 浦 东 航 油 33% 的 股 份 浦 东 航 油 的 另 外 两 位 股 东 分 别 是 上 海 国 际 机 场 股 份 有 限 公 司 ( 持 股 40%) 和 中 石 化 资 产 管 理 有 限 公 司 ( 持 股 27%) 2015 年, 浦 东 公 司 继 续 保 持 零 事 故 零 伤 害 零 污 染 的 安 全 生 产 态 势, 在 油 价 持 续 下 跌 的 不 利 经 营 环 境 下, 浦 东 航 油 在 2015 年 维 持 了 稳 定 的 经 营 业 绩, 总 加 注 量 相 比 2014 年 增 加 8.6%, 达 到 约 380 万 吨 浦 东 航 油 仍 然 是 CAO 集 团 主 要 利 润 来 源 之 一,2015 年 贡 献 了 3890 万 美 元 并 账 利 润 上 海 迪 士 尼 乐 园 2016 年 6 月 正 式 开 园, 这 将 带 动 旅 游 业 发 展, 浦 东 公 司 的 加 注 量 也 将 取 得 进 一 步 增 长 中 国 航 油 集 团 津 京 管 道 运 输 有 限 责 任 公 司 ( 管 输 公 司 ) 管 输 公 司 的 主 要 资 产 是 全 长 185 公 里 的 管 道 ( 津 京 管 道 ), 连 接 天 津 南 疆 码 头 和 北 京 首 都 国 际 机 场 及 天 津 滨 海 国 际 机 场, 并 通 过 该 管 道 向 北 京 首 都 国 际 机 场 和 天 津 滨 海 国 际 机 场 提 供 航 油 输 送 服 务 津 京 管 道 是 中 国 民 航 市 场 中 最 长 管 径 最 大 和 输 油 量 最 高 的 多 油 品 输 送 管 道 中 国 航 油 集 团 物 流 有 限 公 司 和 CAO 是 管 输 公 司 两 大 股 东, 分 别 持 股 51% 和 49%

51 Annual Report OKYC storage facilites OKYC 的 储 罐 设 施 2015 年, 在 北 京 首 都 机 场 周 转 量 增 长 的 带 动 下, 管 输 公 司 的 航 油 运 输 量 同 比 增 加 10% 至 280 万 吨, 创 历 史 新 高 2015 年 来 自 管 输 公 司 的 并 帐 利 润 达 220 万 美 元, 比 2014 年 增 长 35.4% 安 全 运 营 方 面, 管 输 公 司 的 设 备 运 行 良 好, 实 现 了 零 失 误 零 差 错 零 污 染 北 京 天 津 两 大 机 场 的 运 输 量 预 计 将 进 一 步 增 长, 管 输 公 司 的 运 营 前 景 较 为 乐 观 中 国 航 油 集 团 新 源 石 化 有 限 公 司 ( 新 源 公 司 ) 新 源 公 司 主 要 从 事 航 油 和 其 他 油 品 的 储 存 和 贸 易 业 务 新 源 公 司 拥 有 位 于 中 国 广 东 省 茂 名 市 的 库 容 为 7.5 万 立 方 米 的 水 东 油 库 新 源 公 司 的 股 东 分 别 为 深 圳 巨 正 源 石 化 有 限 公 司 CAO 和 中 国 航 空 油 料 集 团 公 司, 分 别 持 股 60% 39% 1% 2015 年, 面 对 不 利 的 贸 易 经 营 环 境, 新 源 公 司 不 断 开 拓 新 业 务, 寻 找 新 的 利 润 增 长 点,2015 年 来 自 新 源 公 司 的 并 账 利 润 达 到 70 万 美 元, 水 东 油 库 保 持 安 全 运 营, 圆 满 完 成 了 安 全 管 理 任 务 韩 国 丽 水 枢 纽 油 库 有 限 公 司 ( OKYC ) OKYC 的 第 二 大 股 东 ( 持 股 26%), 仅 次 于 韩 国 国 家 石 油 公 司 ( 持 股 29%) OKYC 的 其 余 发 行 股 本 由 三 星 C&T 股 份 有 限 公 司 及 LG 国 际 集 团 公 司 等 大 型 企 业 持 有 2015 年 OKYC 没 有 发 生 任 何 安 全 和 运 营 事 故 有 利 的 市 场 结 构, 使 OKYC 的 储 罐 租 用 率 达 到 较 高 水 平, 客 户 包 括 声 誉 良 好 的 油 企 和 石 油 巨 头, 也 实 现 了 投 入 运 营 以 来 的 首 次 盈 利,2015 年 向 CAO 贡 献 利 润 140 万 美 元 中 国 航 油 香 港 供 油 有 限 公 司 ( CNAF HKR ) CNAF HKR 是 CAO 全 资 子 公 司 CAOHK 旗 下 的 合 资 公 司, 在 香 港 赤 腊 角 国 际 机 场 ( 简 称 香 港 国 际 机 场 ) 提 供 航 油 加 注 服 务 CNAF HKR 的 股 东 包 括 CAOHK, 深 圳 承 远 航 空 油 料 有 限 公 司, 中 国 联 合 石 油 集 团 有 限 公 司 和 展 裕 投 资 有 限 公 司 CAOHK 持 有 CNAF HKR 全 部 已 发 行 股 票 的 39%, 其 余 三 家 公 司 分 别 持 有 37%,14% 和 10% 的 股 份 CNAF HKR 是 在 香 港 国 际 机 场 提 供 加 注 服 务 的 第 三 家 获 批 航 油 加 注 服 务 商 加 油 站 占 地 面 积 约 3,000 平 方 米, 包 括 行 政 办 公 室, 调 度 室, 维 修 车 间 等, 并 配 有 管 线 加 油 车 和 罐 式 加 油 车 CNAF HKR 已 经 于 2015 年 8 月 1 日 投 入 运 营 韩 国 丽 水 枢 纽 油 库 有 限 公 司 拥 有 130 万 方 原 油 和 成 品 油 油 库, 由 CAO 与 另 外 6 家 公 司 合 资 建 立 和 运 营 CAO 是

52 50 China Aviation Oil (Singapore) Corporation Ltd Chief Executive Officer s Strategic Report Financial Review EARNINGS REVIEW China Aviation Oil ( CAO ) Group net profit rose 24.7% year-on-year to US$61.3 million for the financial year ended 31 December 2015 ( FY2015 ), compared to US$49.2 million for year ended 31 December 2014 ( FY2014 ). Revenue for the Group decreased 47.4% to US$9.0 billion compared to US$17.1 billion a year ago, which was mainly attributable to lower oil prices as well as product mix. Total supply and trading volume was 20.2 million tonnes, almost the same as FY2014 s 20.4 million tonnes. Revenue from middle distillates declined 48.0% from a year ago to US$7.0 billion, mainly due to the drastic drop in oil prices even as jet fuel accounted for 71.4% of the Group s total revenue in FY2015. Volume of jet fuel supply and trading was 11.9 million tonnes for FY2015, a reduction of 1.6% compared to 12.1 million tonnes for FY2014. Revenue from other oil products declined 44.8% from a year ago to $2.0 billion, due principally to the decline in oil prices even as the trading volume of other oil products remained unchanged at 8.3 million tonnes for FY2015. China remained the Group s largest market, accounting for 52.5% of the Group s revenue in FY2015. Accordingly and in line with the Group s strategy in building a global supply and trading network, 47.5% of the Group s revenue in FY2015 was derived from outside China, compared to 49.0% in FY2014. CAO Group gross profit rose 29.4% to US$35.4 million for FY2015, compared to US$27.4 million for FY2014 mainly due to higher trading profits derived from jet fuel trading. Gross profit from the trading in fuel oil and other oil products improved but was partially offset by losses incurred in petrochemicals trading. In view of the weak demand in China, the Group suspended petrochemical trading in September 2015 to focus more on its jet fuel core businesses. Total expenses decreased 32.9% to US$13.9 million for FY2015, compared to US$20.7 million for FY2014, mainly due to lower finance cost relating to bank charges and interest expense, lower professional fees and the recovery of monies due from MF Global amounting to US$3.10 million. Share of profits from associates and joint venture decreased 2.1% to US$42.3 million for FY2015 compared to US$43.2 million for FY2014, primarily due to lower contribution from SPIA. Profit contribution from SPIA decreased 7.1% to US$38.9 million for FY2015, compared to US$41.9 million for FY2014 mainly due to lower jet fuel prices despite higher refuelling volumes. OKYC saw a turnaround in FY2015, contributing share of profit of US$1.4 million in FY2015 compared to share of loss of US$1.7 million in FY2014. The profit generated from its oil storage leasing activity was partially offset by the Marked-to-Market ( MTM ) loss of its Cross Currency interest rate Swap ( CRS ) contracts. The Group s share of loss for OKYC of US$1.7 million in FY2014 was due mainly to lower storage leasing income and MTM loss from its CRS contracts. OKYC entered into CRS contracts to hedge against future revenue in US Dollar. In accordance with the International Financial Reporting Standards, MTM gains or losses have to be recorded in the Income Statement. Share of profit from TSN-PEKCL was US$2.2 million for FY2015 compared to US$1.7 million for FY2014, an increase of 35.4%. Share of profit from Xinyuan decreased by US$0.9 million to US$0.7 million, as there was a reversal of impairment provision on its oil storage properties in FY2014. The share of loss from CNAF-HKR was US$0.8 million for FY2015 compared to US$0.2 million for FY2014, mainly due to the pre-operating expenses incurred since its incorporation on 10 September The construction of the facility was completed and it commenced operations in August The Group s earnings per share was 7.12 US cents for FY2015 compared to 5.72 US cents for FY2014. ASSETS The Group continued to maintain a robust balance sheet with zero gearing as at 31 December Total assets amounted to US$845.5 million, compared to US$1.4 billion a year ago due mainly to lower accounts receivables as a result of the slump in oil prices.

53 Annual Report The Group s liquidity and debt servicing ability remained strong. As at 31 December 2015, the Group s total trade and banking facilities amounted to US$3.2 billion and US$170.5 million in cash and cash equivalents, compared to US$94.3 million as at 31 December As at 31 December 2015, the Group s current ratio and quick ratio were 2.29 and 2.06 respectively (31 December 2014: 1.33 and 1.30 respectively), reflecting the Group s strong liquidity and robust financial health. BORROWINGS There were no borrowings as at 31 December 2015 and 31 December The Group s net assets stood at US$592.6 million or US cents per share as at 31 December 2015, compared to US$553.5 million or US cents per share as at 31 December The higher net asset value per share was attributable to the earnings generated in FY2015. The Group continues to monitor its overall liquidity position to support its growing business expansion. Currently, the principal sources of cash flows are from its supply and trading business operations and dividends received from its associates. The Group continues to maintain a healthy bank balance as it exercised stringent credit management and focused on credit control and collections as well as working capital management, while proactively seeking synergetic and strategic asset investment opportunities to diversify its income streams. ECONOMIC VALUE ADDED Economic Value Added ( EVA ) profit for FY2015 was US$22.9 million, increased by 52.7% or US$7.9 million from US$15.0 million for FY2014. Accounting net profits rose 24.7% year-on-year to US$61.3 million for FY2015, compared to US$49.2 million for FY2014. The rate of increase in economic profit surpassed the 24.7% year-on-year increase in accounting net profits. This is testament that the Group has created value beyond and above all financial obligations, including a capital charge. During the year, the Group has produced returns above the capital charge by reducing capital employed in the business and by improving returns through reducing expenses and cost of capital. Handling of tank valves at CNAF storage facilities CNAF 储 罐 设 施 的 储 油 罐 阀 门 运 作

54 52 China Aviation Oil (Singapore) Corporation Ltd Chief Executive Officer s Strategic Report Financial Review 5-Year Financial Summary Income Statement 损 益 表 (US$'000) Revenue 营 业 额 9,011,978 14,807,984 15,571,869 17,061,031 8,987,487 Gross Profit 毛 利 39,966 42,750 52,491 27,397 35,444 Associated Companies 联 营 公 司 40,232 43,187 46,476 43,194 42,296 Net Profit Attributable to Equity Holders of the Company (PATMI) 可 向 股 东 分 配 净 利 润 63,401 66,189 70,216 49,160 61,281 Balance Sheet 资 产 负 债 表 (US$'000) Total Assets 总 资 产 1,194,261 1,650,339 1,574,890 1,378, ,517 Total Equity 股 东 权 益 401, , , , ,641 Cash And Cash Equivalent 现 金 及 现 金 等 价 物 88,065 81,144 56,299 94, ,505 Financial Ratios 财 务 比 率 Earnings Per Share (US$ Cents)* 每 股 收 益 ( 美 分 )* Net Assets Per Share (US$ Cents) 每 股 净 资 产 ( 美 分 ) Return On Equity 净 资 产 回 报 率 # 17.0% 15.4% 14.3% 9.1% 10.7% Return On Assets 资 产 回 报 率 # 5.9% 4.7% 4.5% 3.5% 5.7% Debt Equity Ratio 股 本 带 息 负 债 率 7.5% 0.4% 5.5% 0.0% 0.0% * The diluted earnings per shares are adjusted for transactions that adjust the number of shares without a corresponding changes in resources. The effects of the bonus shares, issued on 10 March 2014, which is before the financial statements are authorised for issue, have been included in the diluted earnings per share calculation for the years ended 31 December 2011 to 稀 释 每 股 收 益 依 照 影 响 股 份 数 量 而 不 影 响 相 应 金 额 的 交 易 进 行 调 整 于 2014 年 3 月 10 日 在 财 务 报 表 批 准 公 布 前 发 行 的 股 票 股 利 的 影 响 已 被 考 虑 在 2011 年 至 2015 年 的 每 股 收 益 计 算 中 # Average shareholders equity or average total assets used in calculations. 计 算 时 取 股 东 权 益 或 总 资 产 的 平 均 值 Total Equity 股 东 权 益 401, , , , ,641 Total Cash and Cash Equivalent 现 金 及 现 金 等 价 物 88,065 81,144 56,299 94, ,505 US$ 000 US$

55 Annual Report 首 席 执 行 官 战 略 报 告 财 务 业 绩 盈 利 分 析 截 止 2015 年 12 月 31 日 的 2015 财 年 ( 2015 财 年 ) CAO 净 利 润 同 比 增 加 24.7% 至 6130 万 美 元, 截 止 2014 年 12 月 31 日 的 2014 年 ( 2014 财 年 ) 净 利 润 为 4920 万 美 元 2015 年 集 团 收 入 减 少 47.4% 至 90 亿 美 元,2014 年 为 171 亿 美 元 主 要 是 由 于 较 低 的 油 价, 以 及 业 务 结 构 的 变 化 供 应 与 贸 易 总 量 为 2020 万 吨, 与 2014 年 的 2040 万 吨 基 本 一 致 2015 年 集 团 中 馏 分 收 入 同 比 降 低 48% 至 70 亿 美 元, 主 要 由 于 油 价 的 大 幅 降 低,2015 年 航 油 对 集 团 总 收 入 的 贡 献 为 71.4% 2015 年 航 油 供 应 与 贸 易 量 为 1190 万 吨, 相 比 2014 年 的 1210 万 吨 降 低 1.6% 2015 年 集 团 其 他 油 品 收 入 同 比 降 低 44.8% 至 20 亿 美 元, 主 要 由 于 油 价 下 跌, 其 他 油 品 贸 易 量 稳 定 在 830 万 吨 中 国 依 然 是 集 团 最 大 的 市 场,2015 年 占 集 团 总 收 入 52.5% 秉 承 集 团 打 造 全 球 供 应 与 贸 易 网 络 的 战 略, 集 团 47.5% 的 收 入 来 自 中 国 以 外 地 区,2014 年 这 一 数 字 为 49% 2015 财 年 CAO 集 团 毛 利 为 3540 万 美 元, 较 上 年 同 期 的 2740 万 美 元 增 加 29.4%, 主 要 是 由 于 航 油 贸 易 盈 利 较 高 所 致 燃 料 油 和 其 他 油 品 毛 利 有 所 改 善, 但 还 是 被 化 工 品 的 贸 易 亏 损 部 分 抵 消 由 于 中 国 经 济 放 缓 拖 累 中 国 需 求, 以 及 不 断 增 加 的 利 率 风 险, 集 团 在 2015 年 9 月 暂 停 了 化 工 品 贸 易, 更 加 专 注 航 油 核 心 业 务 2015 年 累 计 费 用 总 额 为 1390 万 美 元, 较 2014 年 的 2070 万 美 元 减 少 32.9% 主 要 是 因 为 银 行 费 用 和 利 息 费 用 的 降 低 使 得 财 务 费 用 减 少 专 业 服 务 费 降 低, 以 及 收 回 MF Global 坏 账 310 万 美 元 来 自 联 营 公 司 的 投 资 收 益 较 上 年 同 期 的 4320 万 美 元 减 少 2.1% 至 4230 万 美 元, 主 要 是 来 自 浦 东 航 油 投 资 收 益 降 低 所 致 浦 东 航 油 投 资 收 益 为 3890 万 美 元, 相 比 2014 年 的 4190 万 美 元 减 少 7.1%, 主 要 由 于 航 油 价 格 下 跌, 虽 然 加 油 量 有 所 增 加 2015 年 OKYC 扭 亏 为 盈, 贡 献 利 润 140 万 美 元,2014 年 亏 损 170 万 美 元 OKYC 储 罐 租 赁 业 务 的 盈 利 部 分 被 外 币 掉 期 合 约 盯 市 损 失 抵 消 OKYC 2014 年 170 万 美 元 的 投 资 亏 损 主 要 是 由 于 储 罐 租 赁 业 务 收 入 较 低, 以 及 外 币 掉 期 合 约 的 盯 市 损 失 OKYC 签 订 外 币 掉 期 合 约 主 要 是 为 了 对 冲 未 来 的 美 元 收 入 按 照 国 际 财 务 报 告 准 则, 盯 市 损 失 必 须 记 录 在 损 益 表 中 2015 年 来 自 香 港 加 注 公 司 的 投 资 亏 损 为 80 万 美 元,2014 年 投 资 亏 损 为 20 万 美 元, 主 要 由 于 2013 年 9 月 10 日 公 司 成 立 以 来 的 运 营 前 期 费 用 投 入 设 施 已 经 建 设 完 毕 并 于 2015 年 8 月 投 产 2015 年 集 团 每 股 盈 利 为 7.12 美 分,2014 年 为 5.72 美 分 资 产 状 况 集 团 资 产 负 债 表 健 康, 截 止 2015 年 12 月 31 日 零 负 债 总 资 产 达 亿 美 元,2014 年 为 14 亿 美 元, 主 要 由 于 油 价 下 跌, 应 收 账 款 降 低 集 团 流 动 性 和 偿 债 能 力 稳 健 截 止 2015 年 12 月 31 日, 集 团 总 授 信 额 度 达 32 亿 美 元, 现 金 和 现 金 等 价 物 总 额 亿 美 元,2014 年 12 月 31 日 为 9430 万 美 元 截 止 2015 年 12 月 31 日, 集 团 流 动 比 率 和 速 动 比 率 分 别 为 2.29 和 2.06 (2014 年 12 月 31 日 分 别 为 1.33 和 1.30), 反 映 了 集 团 较 强 的 流 动 性 和 健 康 的 财 务 状 况 借 贷 截 止 2015 年 12 月 31 日 集 团 无 贷 款, 与 2014 年 12 月 31 日 一 致 截 止 2015 年 12 月 31 日 集 团 净 资 产 为 亿 美 元, 即 68.9 美 分 每 股 截 止 2014 年 12 月 31 日, 净 资 产 为 亿 美 元, 即 美 分 每 股 每 股 净 资 产 值 的 提 高 是 由 于 2015 年 盈 利 的 增 加 集 团 继 续 控 制 整 体 流 动 性, 支 持 业 务 拓 展 目 前 现 金 主 要 来 源 是 供 应 与 贸 易 业 务 产 生 的 自 有 现 金, 以 及 联 营 公 司 的 分 红 集 团 银 行 存 款 水 平 良 好, 实 施 严 格 的 信 用 管 理, 专 注 信 用 控 制 应 收 账 款 回 收 和 流 动 资 金 管 理, 同 时 积 极 寻 找 有 协 同 性 的 战 略 资 产 投 资 机 会, 拓 展 收 入 来 源 经 济 附 加 值 2015 年 经 济 附 加 值 为 2290 万 美 元, 相 比 2014 年 的 1500 万 美 元 增 加 52.7%, 即 790 万 美 元 2015 年 净 利 润 同 比 增 长 24.7% 至 6130 万 美 元,2014 年 为 4920 万 美 元 经 济 附 加 值 的 增 长 超 过 了 净 利 润 24.7% 的 增 长, 这 证 明 集 团 创 造 的 价 值 远 远 超 过 财 务 成 本 ( 包 括 资 本 成 本 ) 本 年 度, 集 团 减 少 了 业 务 所 需 资 本, 并 通 过 减 少 费 用 和 资 本 成 本 提 高 了 回 报 2015 年 来 自 天 津 管 输 的 投 资 收 益 累 计 为 220 万 美 元, 相 比 2014 年 的 170 万 美 元 增 长 35.4% 2015 年 新 源 的 投 资 收 益 累 计 为 70 万 美 元, 较 上 年 减 少 90 万 美 元, 主 要 是 2014 年 冲 回 以 前 年 度 计 提 的 储 罐 减 值 准 备

56 54 China Aviation Oil (Singapore) Corporation Ltd Chief Executive Officer s Strategic Report Investor Relations Committed to high corporate governance and transparency standards, maintaining active, open and fair communication with our stakeholders is a top priority for CAO. Particularly in a challenging 2015 marked by depressed oil prices and turbulence in global equity markets, the Group continued to step up its investor relations efforts to foster a sustained communication flow in order to provide the investment community with accurate, fair and timely information about CAO s business operations and performance. These sustained efforts in investor relations underscore the Group s commitment to create long-term value for its stakeholders. ENGAGING INVESTORS PROACTIVELY 2015 was a volatile year for global stock markets, with the investing community unsettled by the oil price slump and macroeconomic uncertainty due mainly to the weaker growth in China, the world s largest consumer market. This was further exacerbated by geopolitical tensions and impending interest rate hikes which severely affected market sentiments throughout the year. Against this backdrop, CAO s Senior Management and Investor Relations team heightened engagement with the investor community, proactively communicating with existing and potential institutional investors, financial analysts, the media as well as retail shareholders on various communication platforms. In 2015, CAO held close to 200 investor meetings and conference calls with institutional investors and undertook several non-deal roadshows in Singapore, Malaysia and Hong Kong, presenting CAO to shareholders and potential investors across various asset classes through one-on-one and group meetings, conference calls and forums. At these meetings, Senior Management engaged investors, keeping them abreast of the Company s strategic direction, mounting operational competitiveness and realigned business portfolio. To further engage its retail shareholders, Senior Management undertook to present the Group s FY2014 business performance to some 152 attending retail shareholders at its 2015 Annual General Meeting, providing them insights into the Group s business, with a lively question-and-answer session where the Board of Directors and Senior Management addressed each and every investor query and concern. We believe the proactive outreach deepens relationships with longterm shareholders, promotes greater transparency with a better understanding and appreciation of the Group s value proposition; the capital market responded positively to the active engagement with improved liquidity of CAO shares, sustaining CAO share price to close at S$0.80, an increase of 19.4% in the first half of In the second half of 2015, the equity markets became increasingly negative, primarily due to the low oil prices and the sudden devaluation of the renminbi currency by the Chinese central bank to support the sluggish Chinese economy. CAO share price likewise was on a volatile swing, reflecting the general trend of the stock markets. Still, CAO intensified its engagement with the investment community and convened its Corporate Access Day in September where Senior Management shared with shareholders, analysts and investors on the The Global Stratosphere of Aviation Marketing, explaining the aviation marketing segment s significance for the Group and outlining our strategic value chain and synergistic assets investments strategy. Alongside our interaction with the global investor community, we also heightened our outreach efforts with the international investing and financial community through international media engagements, as a means to engage both retail as well as institutional investors. In 2015, CAO s share of voice increased to over 100 media articles. ENHANCING COMMUNICATION As the Group s investor base broadened to include global fund managers, CAO adopted new media platforms to enhance communication, particularly through the use of the internet to extend its reach to global investors. Led by its conviction to maintain high standards of corporate transparency and fair disclosure, the Investor Relations team also augmented the use of various multimedia tools during the year to reach out to the investor community globally through webcasts, videos and conference calls. With the proliferation of mobile devices, a mobile compatible corporate website was developed to enhance the Group s investor communication. Designed as an easy-to-use tool, the use of this digital platform further reinforced CAO s global investor outreach strategy, supporting our efforts to provide useful information to investors in a timely manner. As part of CAO s investor communication initiatives, the Group has undertaken since FY2014 to enhance its corporate reporting format, incorporating elements of the International Integrated Reporting Framework into its annual reports to further strengthen and promote transparency of the Group s business performance,

57 Annual Report INVESTOR RELATIONS CALENDAR 投 资 者 关 系 活 动 时 间 表 FEBRUARY 年 2 月 FY2014 Results Briefing to Media & Analysts 2014 年 媒 体 与 分 析 师 全 年 业 绩 发 布 会 APRIL 年 4 月 21 st Annual General Meeting CEO s FY2014 Results Presentation to Shareholders 21 次 常 年 股 东 大 会 CEO 向 股 东 介 绍 2014 年 业 绩 JULY 年 7 月 1H 2015 Results Briefing to Media & Analysts 2015 年 上 半 年 媒 体 与 分 析 师 业 绩 发 布 会 SEPTEMBER 年 9 月 Corporate Access Day 年 投 资 者 接 待 日 FEBRUARY 年 2 月 FY2015 Results Presentation to Media & Analysts 2015 年 媒 体 与 分 析 师 全 年 业 绩 发 布 会 MARCH 年 3 月 Non-deal Fixed Income Roadshow with Haitong Securities, Hong Kong 海 通 证 券 固 定 收 益 基 金 公 司 非 交 易 性 路 演, 香 港 MAY 年 5 月 Macquarie s Tiffin Lunch Presentation, Singapore 麦 格 理 证 券 午 餐 推 介 会, 新 加 坡 Non-deal Equity Roadshow with Maybank Kim Eng, Singapore 马 来 亚 银 行 金 英 证 券 非 交 易 性 路 演, 新 加 坡 Non-deal Equity Roadshow with CIMB, Singapore 联 昌 国 际 银 行 非 交 易 性 路 演, 新 加 坡 AUGUST 年 8 月 Non-deal Equity Roadshow with Macquarie, Hong Kong 麦 格 理 证 券 非 交 易 性 路 演, 香 港 Non-deal Equity Roadshow with Maybank Kim Eng, Kuala Lumpur 马 来 亚 银 行 金 英 证 券 非 交 易 性 路 演, 吉 隆 坡 JANUARY 年 1 月 COO s Trading Forum with sell-side analysts COO 与 卖 方 分 析 师 举 行 贸 易 交 谈 会 providing deeper insights into CAO s business model and strategy as well as the risks and opportunities it faces in the constantly changing external environment. All disclosures submitted to the Singapore Exchange are made available in the Investor Relations section of the Group s corporate website, Investors can find comprehensive information about CAO including news releases, annual reports, presentations from our Corporate Access Days, webcasts of financial results briefings and stock exchange announcements. The website also allows web users to sign up for alerts to stay up-to-date on the latest corporate developments. CAO actively seeks investors feedback to continuously improve its investor relations efforts. The Investor Relations team may be reached at [email protected] for shareholders enquiries or suggestions. ACCOLADES In 2015, the Group s proactive investor relations approach and commitment to corporate transparency was again recognised by the investment community. CAO was named runner-up for the Most Transparent Company in the oil and gas category at the SIAS Investors Choice awards for the sixth consecutive year. The Group s investor relations efforts were further recognised by the investment community with the award of Best Investor Relations (Gold) amongst listed companies with market capitalisation of S$300 million to S$1 billion at the Singapore Corporate Awards DELIVERING VALUE CAO stood by its commitment to reward shareholders in a year of turbulence and challenges. CAO share price while volatile during the year, proved resilient and resumed an upward trajectory to close at S$0.71 on 31 December 2015 with an overall increase of 6% yearon-year, outperforming the Straits Times Index s 14.3% decline in the same period. Reflecting the increased interest in CAO, average daily trades in CAO shares increased 33% year-on-year. In response to feedback from minority shareholders and to afford shareholders a more direct participation in the Group s earnings growth, the Board of Directors has approved the adoption of a dividend policy based on a growth-based dividend payout formula. Commencing from FY2015, CAO intends to declare dividends comprising 30% of CAO s annual consolidated net profits attributable to shareholders (one-tier, tax exempt) for each financial year. The Company has proposed a first and final (one-tier, tax exempt) dividend of S$0.03 per share for FY2015.

58 56 China Aviation Oil (Singapore) Corporation Ltd Chief Executive Officer s Strategic Report Investor Relations The proposed dividend of S$0.03 per share for FY2015 represents a 50% increase from a fixed final dividend payout of S$0.02 per share for the preceding financial year. As the Group continues to strengthen the resilience of its business portfolio and fully leverage on its core capabilities to pursue opportunities and accretive investments that add scale to its core businesses, investor relations takes on a strategic function, helmed by Senior Management, to facilitate investor engagement at a heightened level, as CAO moves forward into its next phase of growth and drive the strategic transformation of the Group for healthy growth to create sustainable long-term value for our shareholders CAO SHARE PRICE MOVEMENT & TRADING VOLUME Dec 2014 Jan Feb Mar Apr May Jun Jul Aug Sep 2015 Oct Nov Dec 0.321M 0.119M SHARE PRICE INFORMATION 股 价 信 息 Share Price (S$) 股 价 ( 新 元 ) As at last trading day of the year 截 至 当 年 的 最 后 一 个 交 易 日 High 最 高 价 Low 最 低 价 Average 平 均 Source: Bloomberg & SGX Website CORPORATE CALENDAR 公 司 事 务 时 间 表 2016 Announcement of 4Q 2015 and 2015 full-year financial results 公 告 2015 年 全 年 业 绩 25 February Dispatch of Summary Reports to shareholders 向 股 东 派 发 年 报 概 要 On or about 24 March 22 nd Annual General Meeting 第 22 届 常 年 股 东 大 会 20 April Proposed First and Final Dividend for FY 年 首 次 及 年 终 股 息 Books closure date 关 账 日 4 May Payment date 付 款 日 17 May Announcement of 1Q 2016 results 2016 年 第 一 季 度 业 绩 公 告 April Announcement of 2Q 2016 results 2016 年 第 二 季 度 业 绩 公 告 July Announcement of 3Q 2016 results 2016 年 第 三 季 度 业 绩 公 告 November 2017 Announcement of 4Q 2016 and 2016 full-year financial results 公 告 2016 年 全 年 业 绩 February

59 Annual Report 首 席 执 行 官 战 略 报 告 投 资 者 关 系 保 持 高 标 准 的 公 司 治 理 和 透 明 度, 与 股 东 保 持 积 极 开 放 和 公 平 的 沟 通 对 CAO 来 说 至 关 重 要 2015 年 油 价 疲 软, 全 球 股 市 动 荡, 集 团 继 续 通 过 投 资 者 关 系 活 动, 确 保 沟 通 渠 道 顺 畅, 为 投 资 者 提 供 有 关 CAO 业 务 和 业 绩 的 准 确 公 允 和 及 时 的 信 息, 这 些 都 体 现 了 集 团 为 股 东 创 造 长 期 价 值 的 承 诺 积 极 接 洽 投 资 者 2015 年 对 全 球 股 市 来 说 是 动 荡 的 一 年, 油 价 下 跌 和 中 国 ( 全 球 最 大 消 费 市 场 ) 增 长 放 缓 带 来 的 宏 观 经 济 不 确 定 性 困 扰 投 资 者, 地 缘 政 治 紧 张 局 势 和 加 息 压 力 更 是 严 重 影 响 了 市 场 情 绪 在 这 种 情 况 下,CAO 的 高 级 管 理 层 和 投 资 者 关 系 团 队 增 强 了 投 资 界 的 沟 通, 积 极 与 现 有 和 潜 在 机 构 投 资 者 财 务 分 析 员 媒 体 和 散 户 通 过 各 个 沟 通 平 台 接 洽 2015 年,CAO 与 将 近 200 个 投 资 者 和 机 构 投 资 者 进 行 会 议 或 电 话 会 议, 也 参 加 了 新 加 坡 马 来 西 亚 和 香 港 的 数 个 非 交 易 型 路 演, 向 各 个 类 型 的 股 东 和 潜 在 投 资 者 推 介 CAO, 会 议 形 式 包 括 一 对 一 面 谈 多 人 会 议 电 话 会 议 和 研 讨 会 在 这 些 会 议 上, 高 级 管 理 层 向 投 资 者 介 绍 公 司 的 战 略 方 向, 包 括 增 加 运 营 竞 争 力, 重 新 规 划 业 务 结 构 为 了 进 一 步 接 洽 散 户 投 资 者, 高 级 管 理 层 在 2015 年 常 年 股 东 大 会 上 向 152 名 散 户 股 东 介 绍 2014 年 的 财 务 业 绩 和 集 团 业 务 董 事 会 和 高 管 也 在 问 答 环 节 解 答 每 个 投 资 者 的 问 题 和 顾 虑 我 们 相 信 积 极 主 动 的 沟 通 会 深 化 与 长 期 股 东 的 关 系, 使 他 们 更 好 了 解 集 团 的 价 值 定 位 资 本 市 场 对 这 些 努 力 反 映 热 烈,CAO 股 票 流 动 性 得 到 提 升, 股 价 在 2015 年 上 半 年 高 达 0.8 新 元, 增 加 19.4% 2015 年 下 半 年, 股 市 情 绪 更 加 消 极, 主 要 由 于 低 油 价 和 中 国 央 行 为 了 刺 激 疲 软 的 中 国 经 济, 使 人 民 币 突 然 贬 值 CAO 股 价 也 随 之 波 动, 反 映 了 股 市 的 大 趋 势 在 这 种 情 况 下,CAO 加 强 与 投 资 者 的 沟 通, 在 9 月 召 开 了 投 资 者 接 待 日, 高 管 与 股 东 分 析 师 和 投 资 者 进 行 了 题 为 把 握 全 球 发 展 机 遇, 释 放 航 空 营 销 潜 能 的 分 享, 解 释 了 航 空 市 场 营 销 板 块 对 集 团 的 重 要 性 我 们 的 战 略 价 值 链 和 协 同 性 资 产 投 资 战 略 通 过 与 全 球 投 资 者 的 互 动 和 与 媒 体 的 接 洽, 我 们 加 强 了 与 全 球 投 资 和 金 融 领 域 的 沟 通 2015 年, 报 道 CAO 的 媒 体 文 章 超 过 100 篇, 曝 光 力 度 显 著 加 强 加 强 沟 通 随 着 移 动 设 备 的 普 及, 我 们 改 进 了 公 司 网 站, 使 之 与 移 动 设 备 端 兼 容, 以 改 善 与 投 资 者 的 沟 通 这 个 数 字 化 平 台 便 于 操 作, 为 投 资 者 及 时 提 供 有 用 信 息, 加 强 了 CAO 的 全 球 投 资 者 沟 通 为 了 更 好 与 投 资 者 沟 通, 集 团 从 2014 年 起 就 完 善 公 司 报 告 模 式, 在 年 报 中 加 入 全 球 综 合 性 报 告 框 架 元 素, 加 强 和 推 广 业 绩 透 明 度, 使 投 资 者 们 了 解 CAO 在 多 变 的 外 部 环 境 中 的 业 务 模 式 战 略 风 险 与 机 遇 公 司 向 新 交 所 网 站 披 露 的 全 部 信 息 已 经 上 载 至 CAO 官 网 的 投 资 者 关 系 部 分 投 资 者 可 以 从 官 网 获 得 新 闻 稿 年 报 投 资 者 接 待 日 介 绍 材 料 业 绩 发 布 会 网 络 广 播 新 交 所 公 告 投 资 者 还 可 以 通 过 网 站 定 制 CAO 信 息, 跟 进 最 新 进 展 CAO 欢 迎 投 资 者 就 改 善 投 资 者 关 系 工 作 所 做 的 反 馈 CAO 的 IR 团 队 邮 件 地 址 为 [email protected] 得 奖 情 况 2015 年, 集 团 IR 团 队 的 积 极 工 作 和 对 信 息 透 明 的 坚 持 得 到 了 投 资 界 的 肯 定 CAO 连 续 第 六 年 获 得 新 加 坡 证 券 投 资 者 协 会 颁 发 的 投 资 者 选 择 奖 的 最 透 明 公 司 奖 集 团 还 获 得 了 2015 年 新 加 坡 企 业 大 奖 的 最 佳 投 资 者 关 系 金 奖 (3 亿 新 元 至 10 亿 新 元 市 值 区 间 ) 创 造 价 值 在 动 荡 和 充 满 挑 战 的 外 部 环 境 中,CAO 坚 持 履 行 对 股 东 的 承 诺 虽 然 CAO 股 价 波 动, 但 整 体 表 现 稳 健 且 呈 上 升 趋 势,2015 年 12 月 31 日 收 0.71 新 元, 同 比 增 加 6%, 表 现 好 于 海 峡 时 报 指 数 在 同 时 段 14.3% 的 跌 幅 CAO 股 票 的 每 日 平 均 交 易 量 同 比 增 加 33%, 反 映 投 资 者 对 CAO 兴 趣 的 增 加 为 了 回 应 小 股 东 的 要 求, 使 股 东 更 加 直 接 地 分 享 集 团 的 盈 利 增 长, 集 团 董 事 会 已 经 批 准 了 与 业 绩 增 长 挂 钩 的 股 息 政 策 从 2015 财 年 开 始,CAO 计 划 每 年 将 可 分 配 给 股 东 的 年 度 合 并 净 利 润 的 30% 用 于 股 息 发 放 ( 单 层 免 税 ) 2015 财 年, 公 司 提 议 每 股 0.03 新 元 的 股 息 发 放 ( 单 层 免 税 ) 相 比 2014 财 年 每 股 0.02 新 元 的 股 息 政 策, 增 幅 高 达 50% 随 着 集 团 继 续 打 造 业 务, 充 分 利 用 核 心 竞 争 力, 寻 找 可 以 壮 大 核 心 业 务 的 投 资 机 会 在 高 级 管 理 层 的 带 领 下, 投 资 者 关 系 工 作 从 战 略 角 度 在 各 个 方 面 展 开, 帮 助 CAO 进 入 下 一 阶 段 的 发 展 随 着 集 团 开 始 吸 引 全 球 基 金 经 理,CAO 开 始 在 新 的 媒 体 平 台 上, 尤 其 是 通 过 网 络 加 强 与 全 球 投 资 者 的 沟 通 通 过 保 持 高 标 准 的 信 息 透 明 和 公 平 披 露, 投 资 者 关 系 团 队 使 用 多 个 多 媒 体 平 台, 包 括 网 络 广 播 视 频 和 电 话 会 议, 吸 引 全 球 范 围 内 的 投 资 者

60 58 China Aviation Oil (Singapore) Corporation Ltd Senior Management SEATED FROM LEFT 前 排 左 至 右 Wang Chunyan 王 春 焱, Meng Fanqiu 孟 繁 秋 STANDING FROM LEFT 后 排 左 至 右 Tee Kah Gay 郑 佳 毅, Wang Zhaopeng 王 兆 鹏, Teo Lang Lang Jean 张 嫏 嫏, Zhang Xingbo 张 兴 波

61 Annual Report MENG FANQIU Chief Executive Officer / Executive Director As the Chief Executive Officer ( CEO ), Mr Meng Fanqiu is responsible for the effective management and operations of the entire business of the Group. He is overall in charge of developing and implementing the strategic directions of the business to enhance the competitiveness and profitability of the Group. He provides leadership and directions to the various business functions to achieve performance targets, ensures overall business growth and provides supervision and leadership in the business performance of the Group. Please refer to profile of Mr Meng under Board of Directors section for more information. WANG CHUNYAN Chief Financial Officer As the Chief Financial Officer, Mr Wang Chunyan directs and manages the Group s overall financial plans and accounting practices. He is responsible for the treasury, accounting, budget, tax and audit functions of the Group and also assists the CEO to oversee the IT and risk management functions. He is also a Director of China Aviation Oil (Hong Kong) Company Ltd, CNAF Hong Kong Refuelling Limited and CAOT Pte Ltd. Mr Wang has more than 20 years of experience in China s petroleum industry. Prior to joining CAO, Mr Wang was the Deputy Head of Financial Assets Division at Shengli Petroleum Administrative Bureau, a subsidiary of Sinopec Group. Mr Wang began his career with Hekou Oil Production Plant, a subsidiary of Shengli Petroleum Administrative Bureau in He held several senior positions within the Financial Assets Division of Shengli Petroleum Administrative Bureau before his appointment as Deputy Head of Financial Assets Division in May Mr Wang is a qualified Senior International Finance Manager and Senior Accountant. He holds a Bachelor s Degree in Economics majoring in Accountancy from Changchun Taxation College, China. TEO LANG LANG JEAN Chief Operating Officer As the Chief Operating Officer, Ms Jean Teo is responsible for managing the trading, aviation marketing and operations functions of the Group. She is involved in the development and execution of trading strategies and performance targets for all trading businesses of the Group, and the product portfolio currently includes jet fuel, gasoil, fuel oil and avgas, as well as having oversight of the Group s aviation marketing business. Her responsibilities also include assisting the CEO to identify investment projects and new businesses in line with CAO s growth strategy. Ms Teo is also a Director of North American Fuel Corporation. Ms Teo has more than 15 years of experience in the oil trading industry. Prior to joining CAO, she was a senior trader of distillates products at Cargill International Pte Ltd. Ms Teo began her career with BP Singapore Pte. Ltd ( BPS ), where she held various positions from July 1997 to September 2010, including a secondment to CAO as Head of Trading from January 2008 to August Earlier on in her career at BPS, Ms Teo was a Lead Trader of Light Distillates. Ms Teo holds a Master of Business Administration (Finance) from Manchester Business School, United Kingdom and a Bachelor of Engineering, Chemical (Honours) from National University of Singapore. She is a Fellow member of the Singapore Institute of Arbitrators, and received the Graduate Certificate in International Arbitration from the National University of Singapore in WANG ZHAOPENG President, CAOHK As President of China Aviation Oil (Hong Kong) Corporation Limited ( CAOHK ), Mr Wang Zhaopeng directs and manages the day-to-day business operations in Hong Kong and also oversees the joint venture operations of CNAF Hong Kong Refuelling Limited. His responsibilities include executing the Group s business strategies and corporate plans, leading the financial and reporting functions, as well as overseeing the risk management across all functions at CAOHK. In addition, he is also in charge of developing and ensuring consistent implementation of the Group s human resource policies and procedures. He is also responsible for advising the Group CEO in all aspects of business operations, including business development and investment opportunities in support of the Group s strategic objectives related to its global portfolio of business and activities. Mr Wang is also the Chairman of CNAF Hong Kong Refuelling Limited. Mr Wang has over 29 years of experience in the petroleum and chemical industry in China covering all facets of business operations, including engineering, sales and

62 60 China Aviation Oil (Singapore) Corporation Ltd Senior Management marketing and project planning and management. Prior to joining CNAF in 2008 and his subsequent appointment to CAOHK, Mr Wang was the General Manager of Petrochemical Products Trading Department at China Petroleum Technology & Development Corporation from 2001 to Mr Wang began his career with Urumqi Petrochemical Complex, a subsidiary of China National Petroleum Corporation ( CNPC ) (formerly known as Sinopec Urumqi Petrochemical Group Company) in 1984 as the Section Head of Mechanical and Power Management Department. He was subsequently promoted to various managerial positions within the CNPC group before his appointment as the General Manager of International Business Company of Urumqi Petrochemical Refinery Plant (a joint venture of CNPC Urumqi Petrochemical Complex and Sinopec) in Mr Wang Zhaopeng graduated with a Bachelor of Science in Mechanical Engineering from China University of Petroleum, and holds the professional qualification of Senior Engineer (professor level). ZHANG XINGBO President, NAFCO As President of North American Fuel Corporation ( NAFCO ), Mr Zhang Xingbo directs and manages the day-to-day business operations of the Group s activities in North America including its business strategies and corporate plans. He is also responsible for NAFCO s financial and reporting functions, and oversees the risk management function across all operations at NAFCO. He is also in charge of developing and ensuring consistent implementation of the Group s human resource policies and procedures. His responsibilities also include advising the Group CEO on all aspects of business operations, which encompasses development and investment opportunities, with a focus on growing the Group s aviation marketing business in North America, in support of the Group s strategic objectives related to its global portfolio of business and activities. Mr Zhang has over 20 years of experience in the oil industry, having accumulated extensive experience in China National Aviation Fuel Group Corporation s ( CNAF ) procurement, trading and international business divisions in Asia Pacific and Europe. From 2011 to 2014, he was the Deputy General Manager of International Business at CNAF, where he was in charge of its overseas subsidiaries and the aviation business outside China. Prior to this role, he worked as Vice President at China Aviation Oil (Hong Kong) Company Ltd for more than 3 years, focusing on the expansion of the aviation marketing business. He was seconded to CAO as Deputy General Manager between June 2007 to June 2008, where he assisted in the management and operations of CAO. Mr Zhang started his career with China Aviation Oil Supply Corporation (the predecessor of CNAF) in 1993 where he was responsible for logistics coordination and procurement operations, specialising in the procurement of jet fuel imports to meet the needs of China s civil aviation industry. Mr Zhang holds a Bachelor and a Postgraduate degree in Arts (English major) from Lanzhou University. He is also an Associate Professor of Translation. TEE KAH GAY General Manager, CAOE As the General Manager of China Aviation Oil (Europe) Limited ( CAOE ), Mr Tee Kah Gay is responsible for the day-to-day business operations, which includes executing the Group s business strategies and corporate plans, managing the financial and reporting functions, as well as overseeing risk management across all functions at CAOE. He is also in charge of developing and ensuring consistent implementation of the Group s human resource policies and procedures. His responsibilities also include growing and expanding CAOE s business activities, in line with the Group s strategic objectives relating to its global portfolio of business and activities. Mr Tee has over 15 years of experience in the commodity trading and financial sector. From 2008 to 2013, he successively served as a Project Analyst and then Deputy Head of Risk Management which includes assisting in overseeing the risk management function for CAO Group in Singapore. Before joining CAO, he was with BP Singapore Pte. Ltd ( BPS ), and was primarily responsible for performance reporting and analysis for a portfolio of products. His other duties included coordinating and preparing gross margin and cost variance analysis reports, spearheading the development and implementation of cost management reporting tools as well as administrating a performance management system for the financial control and accounting unit. Prior to this, he had held positions with Glencore Singapore Pte Ltd and Deloitte and Touche, where he specialised in the areas of financial accounting and audit. Mr Tee holds a Bachelor of Accountancy (2nd Upper Class Honours) degree with a minor in Information Technology from Nanyang Technological University of Singapore. He is also a certified Energy Risk Professional from the Global Association of Risk Professionals as well as a member of the Institute of Singapore Chartered Accountants.

63 Annual Report 高 级 管 理 层 孟 繁 秋 首 席 执 行 官 / 执 行 董 事 作 为 首 席 执 行 官, 孟 繁 秋 先 生 负 责 有 效 管 理 和 运 营 CAO 集 团 的 整 体 业 务 他 负 责 制 定 和 实 施 公 司 的 发 展 战 略, 提 升 本 集 团 的 竞 争 力 和 盈 利 能 力 他 也 负 责 领 导 和 指 导 各 业 务 部 门, 使 其 达 到 预 期 目 标, 确 保 整 体 业 务 增 长, 并 监 督 和 负 责 审 核 业 绩 公 告 关 于 孟 先 生 更 详 细 的 介 绍, 请 参 阅 董 事 会 部 分 王 春 焱 财 务 总 监 作 为 财 务 总 监, 王 春 焱 先 生 负 责 领 导 和 管 理 CAO 集 团 整 体 财 务 规 划 与 会 计 事 务 他 监 管 CAO 集 团 的 资 金 运 作 会 计 核 算 预 算 税 收 和 审 计 事 宜, 并 协 助 首 席 执 行 官 监 管 公 司 的 IT 和 风 险 管 理 工 作 他 也 是 中 国 航 油 ( 香 港 ) 股 份 有 限 公 司 中 国 航 油 香 港 供 油 有 限 公 司 和 CAOT 私 人 有 限 公 司 的 董 事 王 先 生 在 中 国 的 石 油 业 有 超 过 20 年 的 经 验 在 加 入 CAO 之 前, 王 先 生 是 胜 利 石 油 管 理 局 财 务 资 产 部 副 主 任 胜 利 石 油 管 理 局 是 中 国 石 油 化 工 集 团 公 司 的 下 属 企 业 王 先 生 于 1993 年 参 加 工 作, 在 胜 利 石 油 管 理 局 河 口 采 油 厂 工 作 他 曾 历 任 胜 利 石 油 管 理 局 财 务 部 多 个 高 级 职 位, 并 于 2006 年 5 月 被 任 命 为 财 务 资 产 部 副 主 任 王 先 生 拥 有 高 级 国 际 财 务 管 理 师 和 高 级 会 计 师 资 格, 并 拥 有 中 国 长 春 税 务 学 院 会 计 系 会 计 学 专 业 经 济 学 学 士 学 位 张 嫏 嫏 首 席 运 营 官 作 为 首 席 运 营 官, 张 嫏 嫏 女 士 负 责 监 管 CAO 集 团 贸 易 部 航 空 市 场 营 销 部 和 运 作 部, 主 要 职 责 包 括 制 定 并 组 织 实 施 CAO 集 团 所 有 贸 易 业 务 ( 贸 易 产 品 目 前 包 括 航 油 柴 油 燃 料 油 和 航 空 汽 油 ) 的 发 展 战 略 及 业 绩 指 标, 以 及 监 管 集 团 航 空 市 场 营 销 业 务 其 职 责 还 包 括 协 助 CEO 寻 找 符 合 CAO 战 略 并 对 CAO 有 实 质 效 益 的 投 资 项 目 和 新 业 务 她 也 是 北 美 航 油 有 限 公 司 的 董 事 张 女 士 拥 有 英 国 曼 彻 斯 特 商 学 院 工 商 管 理 金 融 专 业 硕 士 学 位 新 加 坡 国 立 大 学 化 学 工 程 系 ( 荣 誉 ) 学 士 学 位 她 是 新 加 坡 仲 裁 员 学 会 学 士, 并 于 2013 年 获 得 了 新 加 坡 国 立 大 学 的 国 际 仲 裁 毕 业 证 书 王 兆 鹏 中 国 航 油 ( 香 港 ) 有 限 公 司 总 裁 作 为 中 国 航 油 ( 香 港 ) 有 限 公 司 ( 香 港 公 司 ) 总 裁, 王 兆 鹏 先 生 经 营 和 管 理 香 港 业 务 的 日 常 运 作, 也 监 督 合 资 公 司 中 国 航 油 香 港 供 油 有 限 公 司 的 运 营 他 的 职 责 包 括 执 行 集 团 商 业 战 略 和 企 业 规 划, 领 导 财 务 汇 报, 以 及 监 管 香 港 公 司 所 有 职 能 部 门 的 风 险 管 理 工 作 他 也 负 责 制 定 与 集 团 人 事 政 策 和 流 程 相 一 致 的 规 章 制 度 并 确 保 相 应 执 行 同 时, 向 集 团 首 席 执 行 官 提 供 涉 及 业 务 运 营 各 方 面 的 建 议, 如 业 务 发 展 和 投 资 机 会, 以 支 持 集 团 实 施 拓 展 全 球 业 务 的 战 略 目 标 王 先 生 还 是 中 国 航 油 香 港 供 油 有 限 公 司 的 董 事 长 王 先 生 在 中 国 石 油 石 化 行 业 的 工 程 销 售 市 场 项 目 规 划 和 管 理 等 多 个 业 务 领 域 拥 有 超 过 29 年 的 经 验 在 2008 年 加 入 中 国 航 空 油 料 集 团 公 司 并 被 派 去 香 港 公 司 任 职 以 前, 王 先 生 于 2001 至 2008 年 担 任 中 国 石 油 技 术 开 发 公 司 石 化 产 品 贸 易 部 总 经 理 王 先 生 的 职 业 生 涯 开 始 于 1984 年, 任 中 国 石 油 天 然 气 集 团 公 司 ( 中 石 油 集 团 ) 子 公 司 中 国 石 油 乌 鲁 木 齐 石 油 化 工 总 厂 ( 前 身 为 中 国 石 化 乌 鲁 木 齐 石 化 总 厂 炼 油 厂 ) 机 械 动 力 处 管 理 科 科 长 王 先 生 随 后 被 提 拔 出 任 中 石 油 集 团 多 个 管 理 岗 位, 直 至 1999 年 升 职 为 乌 鲁 木 齐 石 化 总 厂 ( 中 国 石 油 乌 鲁 木 齐 石 油 化 工 总 厂 和 中 国 石 化 的 合 资 公 司 ) 国 际 商 务 公 司 的 总 经 理 王 兆 鹏 先 生 毕 业 于 中 国 石 油 大 学 机 械 系, 获 理 学 学 士 学 位, 拥 有 研 究 员 级 高 级 工 程 师 资 质 张 女 士 在 石 油 贸 易 领 域 拥 有 超 过 15 年 的 经 验 在 加 入 CAO 之 前, 她 是 嘉 吉 国 际 私 人 有 限 公 司 中 馏 分 产 品 的 高 级 贸 易 员 加 入 嘉 吉 之 前, 张 女 士 在 1997 年 7 月 至 2010 年 9 月 之 间 效 力 于 BP 新 加 坡 私 人 有 限 公 司 ( 简 称 BPS ), 并 于 2008 年 1 月 至 2010 年 8 月 期 间 外 派 至 CAO 担 任 贸 易 部 主 管 张 女 士 在 BPS 还 担 任 过 轻 馏 分 产 品 首 席 贸 易 员

64 62 China Aviation Oil (Singapore) Corporation Ltd 高 级 管 理 层 张 兴 波 北 美 航 油 有 限 公 司 总 裁 作 为 北 美 航 油 有 限 公 司 ( 北 美 公 司 ) 总 裁, 张 兴 波 先 生 指 导 与 管 理 集 团 北 美 业 务 的 日 常 运 作, 包 括 商 业 战 略 和 企 业 规 划, 负 责 领 导 北 美 公 司 的 财 务 汇 报, 监 督 公 司 所 有 业 务 的 风 险 管 理 工 作 他 也 负 责 确 保 集 团 人 事 政 策 和 流 程 得 到 一 致 贯 彻 执 行 同 时, 他 有 责 任 在 业 务 运 营 的 各 方 面 向 集 团 首 席 执 行 官 提 供 建 议, 包 括 业 务 发 展 和 投 资 机 会 等, 尤 其 是 集 团 在 北 美 开 展 的 航 油 营 销 业 务, 以 支 持 集 团 拓 展 全 球 业 务 的 战 略 目 标 张 先 生 在 石 油 领 域 有 超 过 20 年 的 经 验, 在 中 国 航 空 油 料 集 团 公 司 ( CNAF ) 积 累 了 丰 富 的 工 作 经 验, 包 括 油 品 采 购 贸 易 和 在 亚 太 及 欧 洲 的 国 际 业 务 等 多 个 业 务 板 块 2011 年 至 2014 年, 张 先 生 担 任 CNAF 国 际 业 务 部 的 副 总 经 理 一 职, 负 责 海 外 子 公 司 和 中 国 地 区 以 外 的 航 空 业 务 在 此 之 前, 他 作 为 副 总 经 理 在 中 国 航 油 ( 香 港 ) 有 限 公 司 工 作 三 年 多, 主 要 致 力 于 公 司 航 空 市 场 营 销 业 务 的 拓 展 他 还 曾 在 2007 年 6 月 至 2008 年 6 月 被 外 调 至 CAO 担 任 副 总 经 理, 协 助 管 理 公 司 的 业 务 运 营 张 先 生 于 1993 年 加 入 中 国 航 空 油 料 总 公 司 (CNAF 前 身 ), 负 责 物 流 协 调 和 采 购 运 营, 尤 其 是 采 购 进 口 航 油, 满 足 中 国 民 航 业 的 需 求 张 先 生 拥 有 兰 州 大 学 英 语 专 业 文 学 学 士 及 研 究 生 学 历, 具 有 副 译 审 任 职 资 格 郑 佳 毅 中 国 航 油 ( 欧 洲 ) 有 限 公 司 总 经 理 作 为 中 国 航 油 ( 欧 洲 ) 有 限 公 司 ( 欧 洲 公 司 ) 的 总 经 理, 郑 佳 毅 先 生 负 责 管 理 公 司 业 务 的 日 常 运 作, 包 括 执 行 集 团 商 业 战 略 和 企 业 规 划, 管 理 财 务 汇 报 职 能, 监 管 欧 洲 公 司 所 有 职 能 部 门 的 风 险 管 理 工 作 他 也 负 责 制 定 与 集 团 人 事 政 策 和 流 程 相 一 致 的 规 章 制 度 并 确 保 执 行 他 的 职 责 还 包 括 按 照 集 团 全 球 业 务 发 展 的 战 略 目 标, 拓 展 CAO 在 欧 洲 的 业 务 活 动 郑 先 生 在 大 宗 商 品 贸 易 与 金 融 领 域 有 超 过 15 年 的 经 验 2008 年 至 2013 年, 他 先 后 担 任 CAO 的 项 目 分 析 员 和 风 险 管 理 部 副 主 管, 在 新 加 坡 协 助 监 督 CAO 集 团 的 风 险 管 理 职 能 加 入 CAO 之 前, 郑 先 生 任 职 于 BP 新 加 坡 私 人 有 限 公 司 ( BPS ), 主 要 负 责 产 品 组 合 的 表 现 汇 报 与 分 析 他 的 职 责 还 包 括 协 调 准 备 毛 利 与 成 本 差 异 分 析 报 告, 领 导 成 本 管 理 报 告 工 具 的 开 发 与 实 施, 并 监 督 财 务 控 制 与 会 计 部 门 的 业 绩 管 理 系 统 在 此 之 前, 他 曾 任 职 于 嘉 能 可 新 加 坡 私 人 有 限 公 司 与 德 勤 会 计 事 务 所, 专 门 从 事 财 务 会 计 和 审 计 工 作 郑 先 生 是 新 加 坡 南 洋 理 工 大 学 的 会 计 学 学 士 ( 二 等 一 级 荣 誉 学 位 ), 辅 修 信 息 科 技 他 也 是 全 球 风 险 管 理 专 业 人 士 协 会 的 能 源 风 险 从 业 者, 还 是 新 加 坡 特 许 会 计 师 协 会 的 会 员 Interaction with shareholders and investors at Corporate Access Day 2015 与 股 东 及 投 资 者 在 2015 年 投 资 者 接 待 日 交 流

65

66 64 China Aviation Oil (Singapore) Corporation Ltd Risk Management 2015 was a challenging year marked by a steadily downward spiral in oil prices, with Brent crude prices at US$50 in the beginning of the year and slumping to an eleven-year low of US$36 in December. Against a background of persistently challenging competitive environment, especially for the oil and gas industry, CAO continued to strengthen the resilience of its businesses through focused risk management. The Group has, in the past year, continuously maintained a proactive approach to the management of risk, constantly reviewing the Group s risks and opportunities, with a particular focus to manage the risks of the Group s trading and supply activities. In view of the volatile market environment in 2015, CAO has further enhanced the Group s risk management framework with an integrated approach, focusing on topdown and bottom-up aspects of the Group s business operations globally. The measures put in place included: initiating and conducting an inaugural annual review of the Group s subsidiaries; refining the credit risk management methodologies; implementing an enterprise-wide stress test, as well as conducting a maritime disaster desktop exercise involving oil tankers across jurisdictions. As such, the Group s FY2015 financial results underscored an improved operational performance, with the effective management of risks playing an instrumental role in the Group s business performance. FOCUSED AND DISCIPLINED APPROACH As part of its risk culture, the Group continues to actively develop and refine our centralised risk control and support network to enable our global businesses. CAO s risk management framework comprises risk management policies, guidelines, procedures, processes, limits, as well as systems of internal controls, which are put in place to identify, measure and control various risks encountered in our business operations, enabling us to quickly respond to constantly changing market conditions. Our risk management foundation is built upon three pillars namely: i ii iii Three-tier management and control structure; Policies, guidelines and control framework; and System, process and people. The Group s three-tier management and control structure is designed to ensure sound governance and oversight over the execution of effective risk management practices for the Group. At the Board Level, the Risk Management Committee ( RMC ) oversees strategic risk management issues. The RMC sets the limits for various types of risks and approves new activities that CAO plans to embark on. Through monthly reports and quarterly meetings, the RMC reviews the various risk metrics that provide an indication on CAO s risk exposures and the manageability of each category of risk. At the Management Level, the Company Risk Meeting ( CRM ) plans and implements risk management activities to control risks such as market, credit, operational, enterprise, compliance and reputational risks. The CRM operates within the delegated authority set at the RMC level. The CRM is chaired by the Head of Risk Management, who reports to the CEO but has an independent direct reporting line to the RMC. At the operational level the Risk Management Department ensures that risk management activities are executed daily and that all risk-related policies, processes and limits are implemented and adhered to. The risk team has a staff of six who has built up a wealth of experiences in credit, market and enterprise risk management over the past eight years as it grew in tandem to support the Group s expanding business portfolio. Through continuous training, selfimprovement and cross training, the team has either obtained or is working towards professional certification such as Energy Risk Professional ( ERP) and Financial Risk Manager ( FRM ) by Global Association of Risk Professionals ( GARP ). SUSTAINABILITY-FOCUSED POLICIES AND PROCESSES Across the Group, we continuously improves on its risk control systems through adopting best-in-class business practices and developing new initiatives to enhance its risk management capabilities. These include: The Risk Management and Trading Policies Manual which serves as a central repository of policies, procedures and delegation of authorities relating to trading and risk management, as well as Safety, Health and Environment policy and guidelines, whistle-blowing policy and fraud prevention policy in compliance to all related applicable laws and regulations.

67 Annual Report ROBUST MANAGEMENT CONTROL STRUCTURE 严 谨 的 管 理 控 制 架 构 Strategy/ Governance 战 略 / 监 管 Board of Directors 董 事 会 Remuneration Committee Nominating Committee 薪 酬 委 员 会 提 名 委 员 会 Risk Management Committee 风 险 管 理 委 员 会 Audit Committee 审 计 委 员 会 Tactical/Policy 策 略 / 政 策 Management/Company Risk Meeting 管 理 层 / 公 司 风 险 会 Head of Department 部 门 主 管 Head of Risk Management 风 险 管 理 部 主 管 Head of Department 部 门 主 管 Operation/ Control 运 作 / 控 制 Front Office 前 台 Risk Management Dept 风 险 管 理 部 Back Office 后 台 Internal Audit (outsourced) 内 部 审 计 ( 外 包 ) Standard Operating Procedures ( SOPs ), a comprehensive guiding list on operations and information systems processes, are updated regularly while periodic tests of control are conducted to ensure operation risks are managed effectively. In 2014, the Group has initiated a subsidiary review and control framework to standardise work processes across subsidiaries and ensure compliance to the Group s internal policies. The inaugural on-site reviews of the Group s subsidiaries were conducted in 2015 and with the findings, actions were undertaken to standardise the work processes across the subsidiaries globally. Recognising that risk management plays an important role in business sustainability, CAO has adopted the Enterprise Risk Management ( ERM ) approach to manage the various types of risks the Group is exposed to. The ERM further systemise our approach to identify and analyse key risk factors faced by the Group, and through which action plans to mitigate identified risks are executed as planned by respective risk owners from various business units and functions. The process ensures that key risks are proactively monitored and managed and that appropriate mitigations are put in place. As of end 2015, the top ten identified risks in the ERM register did not change significantly as compared to the prior year. KEY RISKS AND MITIGATION STRATEGIES In order to better manage the risks of our growing business portfolio, the Group s risk management department has two different specialised teams, one focusing on market, operations and product risk management and the other focusing on credit risk management, providing efficient support to businesses and timely reporting to management and board. CAO s management of risk also include identifying key areas of uncertainties and risks that will impact the Group s strategic performance, and have in place the appropriate risk mitigating initiatives to manage them: Credit Risk is the risk due to uncertainty of counterparty to meet its contractual obligations. Operation risk is the risk arising from operational gaps of both financial and physical operations.

68 66 China Aviation Oil (Singapore) Corporation Ltd Risk Management Human Resource Risk is the risk due to loss of key personnel, inadequate development of human resources. Business Concentration Risk is the risk of high exposure to a particular product or market segment. Market Risk - is the risk of losses arising from movements in trading positions and market prices. For credit risk, in line with the growing aviation marketing business segment, the Group has refined the existing credit assessment framework for commercial airlines counterparties by taking into consideration criteria that better reflects the commercial airline industry. Also, in response to the volatile market environment in 2015, the Group has employed real-time news alert system to proactively monitor the Group s counterparties which will enable timely actions to safeguard the Group s interests. Improvements to the ETRM system s credit risk reports generation function have been made, in which the updated information on existing counterparties can be utilised to support urgent credit decision, beside the annual credit assessment of the respective counterparties. For physical cargo operation risks, the Group has in place SOPs that are regularly reviewed and appropriate policies such as ship vetting to address physical cargo operations. In the area of human resource risk, the Group has in place comprehensive human resource policies and procedures for recruitment, remuneration and staff development. For business concentration risk, the Group is actively exploring other transportation fuels and to build related structural trading advantages to establish a global integrated supply and trading network. This will further expand and diversified the Group s business portfolio. In the area of market risk, the Group s risk management framework effectively control CAO s business risks with a set of market risk limits such as Value at Risk, Volumetric limits, and has a stringent Stop-Loss and management alert trigger for each of the trading books. For 2015, in addition to specific risk management to handle the respective types of risks, the Risk Management team conducted an enterprise-wide stress testing to assess the resilience of the CAO Group in an extreme market environment through simulating adverse movements in foreign exchange rates, interest rates, prices of commodities and credit conditions. Retrospectively, through stress testing, we are able to determine the readiness and ability of CAO group to withstand and come through in an extreme event. MARKET RISK AND SENSITIVITY ANALYSIS 2015 continued to be a challenging year for the Group s business, particularly against a climate of: falling oil prices in a volatile market; declining Chinese demand for petrochemical products, due to the economic slowdown in China; and continuing volatility of various product and time spreads. Nonetheless, the business risks of the Group s supply and trading operations are effectively monitored and controlled by a comprehensive set of risk control tools. In addition, steps are taken to improve the visibility of key risks and to quantify how mitigating actions reduce them. The Market Value at Risk ( MVaR ) is used as a tool to measure market risk. All physical and financial contracts are subjected to MVaR limits and valuation of the holding portfolio is monitored on a daily basis. A set of market risk limits, which are delegated by the Board, include Volumetric limits, MVaR, Management Alert Triggers and Stop-Loss limits which are measured and monitored daily, with back-testings conducted regularly to ensure the suitability of our MVaR model. In addition, a suite of standardised stress tests were employed with the Risk Management team conducting regular black swan scenarios 1 that take into consideration drastic changes in oil prices, to enhance our risk control measures. In light of high market volatility in 2015, the frequency of ad-hoc stress testing had also significantly increased. These measures allowed CAO to have timely and deeper insight of our business activities in times of extreme market conditions, enabling the Group to take preventive steps where necessary. 1 Black Swan scenarios - events or occurrences that deviate beyond what is normally expected of a situation and that would be extremely difficult to predict

69 Annual Report MVaR UTILISATION 2015 年 全 年 市 场 风 险 值 使 用 情 况 $2,000,000 $1,000,000 12/2014 1/2015 2/2015 3/2015 4/2015 5/2015 6/2015 7/2015 8/2015 9/ / / /2015 -$1,000,000 -$2,000,000 Given the high volatility in the market environment, our risk appetite remained cautious and measured, impacting the total supply and trading volume for FY2015. Nevertheless, the daily MVaR utilisation rate, based on a 95% confidence interval, has remained stable, registering an average MVaR utilisation of US$ 606,000 in CREDIT RISK AND CONCENTRATION ANALYSIS Due to the nature of our business operations, credit risk is inherent in the Group s trading business. It is thus, one of the most significant measurable risks faced by CAO. Credit risk is classified into credit default risk, concentration risk and country risk: i ii Credit default risk is the risk of loss arising from a counterparty being unable to pay its obligations in full. Concentration risk is the risk posed to a company by any single or group of exposures which have the potential to produce losses large enough to threaten the ability of the company to continue operating as a going concern. iii Country risk or sovereign risk is the risk of loss arising from a sovereign state freezing foreign currency payments or when it defaults on its obligations. To actively manage our credit risk, counterparties credit worthiness are evaluated periodically based on their financial standings, operating and payment track records as well as conducting background checks. Actual credit terms and limits to be granted are derived based on the information obtained. We have also incorporated the Potential Future Exposures ( PFE ) approach into our credit monitoring and control process. This approach evaluates over a specified time period and within a certain confidence level, the maximum credit risk exposures of existing trades against possible future market prices during the life of the transactions. This will allow us to identify potential credit exposures resulted from the transactions we undertake. In addition, concentration risk reports, collating an overview on countries, products and internal credit ratings, are also generated on a regular basis to review and assess the Group s concentration risk throughout the year.

70 68 China Aviation Oil (Singapore) Corporation Ltd Risk Management AR Exposure by Country 按 国 家 和 地 区 划 分 的 应 收 账 款 AR Exposure by Internal Credit Rating 按 内 部 信 用 评 级 划 分 的 应 收 账 款 7.20% Singapore 新 加 坡 6.51% USA 美 国 0.02% Saudi Arabia 沙 特 阿 拉 伯 0.49% D 1.57% E 7.14% A 41.86% C 48.94% B 86.27% China 中 国 Our concentration risk profile of accounts receivables are as follows: By Country As of 31 December 2015, our geographical exposure is predominantly China (86%), followed by Singapore (7%), and USA (6.5%), which made up approximately 99% of our total exposure. During the fiscal year, the predominant countries are China (63.4%), Singapore (23.4%) and Hong Kong (6.6%), which made up approximately 93% of our total average exposure. In line with business expansion, the Group s exposure to counterparties outside these three countries has grown steadily over the years as we continue to diversify and rebalance the geographic mix of our business. By Internal Credit Rating As of 31 December 2015, in terms of internal credit rating, our exposure mainly comes from Grade A (7%), Grade B (49%) and Grade C (42%) counterparties, which made up more than 95% of our exposure. During the fiscal year, the exposure from these three internal credit rating is Grade A (8.8%), Grade B (60.6%) and Grade C (26.1%), which similar to 31 December 2014, made up more than 95% of our exposure. For Grade D and E counterparties which are of poorer credit quality, payment terms granted to them are on Letter of Credit and prepayment basis which effectively brings down the risk exposure level and improve our overall portfolio credit quality. The Group has also employed credit enhancement or mitigation tools where necessary. These include obtaining parental company guarantees, cash collateral, letter of credit from investment-rated banks, off-set clause in contracts and credit support annexes in International Swaps and Derivatives Association ( ISDA ) agreements. In 2015, we strengthened the management of our account receivables through measures such as Letter of Credit discounting which reduced our overall credit risk exposures. We are also constantly seeking out other credit mitigation tools, such as credit insurance to reduce our risk exposure. With all these enhanced measures, the Group is better equipped to manage the risks involved in daily trading activities. As CAO embarks on its next phase of growth towards becoming a global top-tier integrated transportation fuels provider, the Group remains committed to proactively promote a strong culture of risk awareness, strengthening risk management in our daily business operations to deliver sustainable shareholder value.

71 Annual Report 风 险 管 理 2015 年 全 年 油 价 持 续 下 跌, 布 伦 特 价 格 从 年 初 的 50 美 元 滑 落 到 12 月 的 36 美 元, 这 也 是 11 年 来 的 最 低 价 格 面 对 这 样 一 个 充 满 挑 战 性 的 商 业 环 境, 特 别 是 油 气 行 业, CAO 继 续 通 过 加 强 风 险 管 理 来 巩 固 业 务 过 去 的 一 年 中, 集 团 积 极 管 理 风 险, 持 续 审 查 风 险 与 机 遇, 尤 其 是 管 理 贸 易 和 供 应 风 险 考 虑 到 2015 年 的 波 动 环 境,CAO 进 一 步 加 强 集 团 的 一 体 化 风 险 管 理 框 架, 通 过 从 上 至 下 和 从 下 至 上 的 方 式 审 查 全 球 运 营 采 取 的 措 施 包 括 : 提 议 并 完 成 对 子 公 司 的 首 次 年 度 风 险 管 控 审 查 改 进 信 用 风 险 管 理 的 方 法 进 行 企 业 范 围 的 风 险 压 力 测 试 执 行 了 对 跨 区 域 贸 易 油 船 的 海 事 灾 难 演 习 集 团 2015 财 年 的 业 绩 显 示 了 运 营 情 况 的 改 善, 风 险 管 理 在 其 中 发 挥 了 至 关 重 要 的 作 用 集 中 化 管 理 作 为 风 险 文 化 的 一 部 分, 集 团 继 续 积 极 开 展 并 改 善 集 中 化 风 险 控 制 与 支 持 网 络, 帮 助 全 球 业 务 的 开 展 CAO 的 风 险 管 理 框 架 包 括 风 险 管 理 政 策 指 引 流 程 过 程 限 额 和 内 控 系 统, 用 来 识 别 评 估 和 控 制 经 营 中 出 现 的 多 种 风 险, 使 我 们 对 多 变 的 市 场 做 出 快 速 反 应 公 司 风 险 管 理 的 三 大 支 柱 分 别 为 : 一 三 重 管 理 与 控 制 架 构 ; 二 政 策 指 导 方 针 和 控 制 架 构 ; 以 及 三 系 统 流 程 和 人 员 集 团 的 三 重 管 理 与 控 制 架 构 是 为 了 确 保 有 效 的 治 理, 监 督 风 险 管 理 实 践 的 有 效 执 行 在 董 事 会 层 面, 风 险 管 理 委 员 会 ( RMC ) 负 责 监 管 战 略 风 险 管 理 问 题 RMC 设 定 各 种 风 险 类 型 的 限 额, 并 且 审 批 公 司 计 划 开 展 的 新 业 务 RMC 在 月 报 和 季 度 会 议 中 审 查 各 种 风 险 矩 阵, 了 解 公 司 各 类 风 险 的 敞 口 和 风 险 管 理 难 度 在 管 理 层 层 面, 公 司 风 险 会 议 ( CRM ) 在 风 险 管 理 委 员 会 授 权 之 下, 负 责 市 场 信 用 运 作 企 业 守 规 和 信 誉 等 各 类 风 险 管 理 活 动 的 组 织 和 实 施 CRM 主 席 由 风 险 管 理 部 主 管 担 任, 既 向 首 席 执 行 官 负 责, 同 时 也 有 权 直 接 独 立 地 向 RMC 汇 报 在 运 作 层 面, 风 险 管 理 部 负 责 日 常 风 险 管 理 业 务 的 执 行, 并 确 保 所 有 与 风 险 相 关 的 政 策 流 程 和 限 额 得 到 遵 守 和 落 实 风 险 管 理 团 队 共 有 6 名 员 工, 通 过 八 年 多 的 建 设, 在 信 用 市 场 企 业 风 险 的 管 控 方 面 积 累 了 宝 贵 的 经 验, 适 应 了 业 务 增 长 的 需 要 风 险 管 理 团 队 的 成 员 通 过 培 训 和 自 我 进 修, 已 经 获 取 或 正 在 努 力 获 取 相 关 专 业 资 质, 如 全 球 风 险 管 理 专 业 人 士 协 会 ( GARP ) 所 认 证 的 能 源 风 险 专 业 证 书 ( ERP ) 和 金 融 风 险 管 理 师 ( FRM ) 可 持 续 的 政 策 和 流 程 集 团 通 过 借 鉴 业 内 的 最 佳 实 践 来 持 续 改 善 CAO 和 子 公 司 的 风 险 管 理, 通 过 新 的 措 施 加 强 风 险 管 理 能 力 这 些 包 括 : 有 关 贸 易 与 风 险 管 理 的 政 策 流 程 和 授 权 的 核 心 政 策 集 风 险 管 理 与 贸 易 手 册, 同 时 还 有 安 全 健 康 与 环 境 政 策 及 指 导 方 针 举 报 政 策 防 欺 诈 政 策 等 公 司 有 全 面 的 标 准 工 作 流 程 ( SOPs ) 指 导 业 务 运 作 和 信 息 系 统, 并 定 期 更 新, 检 测 运 作 风 险 是 否 得 到 有 效 控 制 CAO 集 团 在 2014 年 建 立 了 子 公 司 管 理 与 监 督 流 程 框 架, 目 的 是 规 范 所 有 子 公 司 的 工 作 流 程, 确 保 遵 守 集 团 内 部 政 策 2015 年 我 们 对 所 有 子 公 司 完 成 了 首 次 现 场 的 风 险 管 控 审 查, 并 通 过 审 查 发 现, 采 取 改 进 措 施, 确 保 各 个 子 公 司 遵 循 标 准 化 的 工 作 流 程 CAO 意 识 到 风 险 管 理 对 业 务 持 续 的 重 要 性, 采 取 企 业 风 险 管 理 ( ERM ) 措 施 管 理 CAO 集 团 的 多 种 风 险 ERM 将 我 们 识 别 分 析 关 键 风 险 的 措 施 进 一 步 系 统 化, 通 过 制 定 应 对 措 施, 由 不 同 部 门 和 职 能 板 块 的 风 险 负 责 人 执 行, 确 保 关 键 风 险 得 到 密 切 监 控 和 管 理 这 样 的 流 程 确 保 了 我 们 对 关 键 风 险 的 紧 密 关 注, 并 采 取 了 明 确 恰 当 的 风 险 缓 解 措 施 截 止 2015 年 底, 公 司 根 据 ERM 注 册 表 评 估 出 来 的 十 大 风 险 与 前 一 年 相 比 没 有 重 大 变 化 关 键 风 险 和 缓 解 措 施 为 了 更 好 地 管 理 业 务 发 展 带 来 的 风 险, 我 们 将 风 险 管 理 团 队 重 组 成 两 个 专 业 队 伍, 一 个 组 关 注 市 场, 运 作 和 产 品 控 制 风 险 管 理 ; 另 一 个 组 关 注 于 信 用 风 险 管 理, 为 业 务 提 供 充 分 支 持, 并 及 时 地 报 告 管 理 层 和 董 事 会 CAO 的 风 险 管 理 包 括 识 别 影 响 集 团 战 略 表 现 的 关 键 不 确 定 因 素 和 风 险 领 域, 并 且 制 定 相 应 的 风 险 缓 解 措 施 来 管 理 这 些 风 险 信 用 风 险 指 由 于 对 家 履 约 的 不 确 定 性 带 来 的 风 险 运 作 风 险 来 自 财 务 和 实 货 运 作 两 方 面 的 由 于 运 作 环 节 上 的 缺 失 而 带 来 的 风 险 人 力 资 源 风 险 指 人 力 资 源 枯 竭 流 失 和 人 力 资 源 不 足 带 来 的 风 险

72 70 China Aviation Oil (Singapore) Corporation Ltd 风 险 管 理 业 务 集 中 化 风 险 严 重 集 中 在 特 定 产 品 或 市 场 的 风 险 市 场 风 险 指 由 于 贸 易 仓 位 市 场 价 格 的 变 化 带 来 损 失 的 风 险 对 于 信 用 风 险, 为 了 适 应 正 在 发 展 中 的 航 空 市 场 营 销 业 务, 我 们 为 航 空 公 司 对 家 重 设 了 信 用 评 估 框 架, 在 新 的 评 估 方 法 中 考 虑 了 更 多 反 映 航 空 公 司 业 绩 的 参 数 由 于 2015 年 全 球 经 济 瞬 息 万 变, 我 们 设 立 了 贸 易 对 家 新 闻 快 讯 及 时 跟 踪 贸 易 对 家 情 况, 确 保 我 们 能 及 时 调 整 信 用 条 件 来 保 护 CAO 集 团 的 利 益 我 们 也 不 断 完 善 ETRM 信 息 系 统 的 信 用 报 告 功 能, 使 我 们 能 够 基 于 现 有 对 家 的 更 新 信 息 及 时 作 出 信 用 决 策, 同 时 我 们 也 实 施 了 对 贸 易 对 家 的 年 度 信 用 评 估 对 于 实 货 运 作 风 险, 我 们 已 经 制 定 标 准 化 工 作 流 程 并 定 期 回 顾, 也 有 实 施 如 船 舶 审 批 政 策 来 控 制 实 货 运 作 方 面 的 风 险 对 于 人 力 资 源 风 险, 集 团 制 定 了 有 关 招 聘 薪 酬 和 员 工 培 训 的 人 力 资 源 政 策 和 流 程 对 于 业 务 集 中 化 风 险, 公 司 正 积 极 开 拓 其 它 运 输 燃 料, 建 立 结 构 性 贸 易 优 势, 并 打 造 全 球 一 体 化 的 贸 易 业 务 网 络, 将 业 务 拓 展 为 一 个 相 对 多 元 化 的 平 台 在 市 场 风 险 方 面, 公 司 的 风 险 管 理 构 架 通 过 一 套 市 场 风 险 限 额 来 实 施 控 制, 比 如 风 险 值 和 数 量 限 额 对 于 每 一 个 贸 易 账 户, 也 有 设 立 严 格 的 止 损 限 额 和 管 理 层 预 警 限 额 2015 年, 除 应 对 各 类 风 险 的 专 项 风 险 管 理, 风 险 管 理 团 队 还 进 行 了 企 业 范 围 的 压 力 测 试, 通 过 模 拟 外 汇 汇 率 贷 款 利 率 商 品 价 格 和 信 用 评 级 等 因 素 的 变 化, 评 估 整 个 CAO 集 团 在 极 端 市 场 环 境 中 是 否 可 以 保 持 稳 固 发 展 通 过 测 试, 我 们 发 现 集 团 有 能 力 应 对 这 些 极 端 事 件 并 得 以 持 续 经 营 市 场 风 险 及 敏 感 性 分 析 2015 年 依 然 是 公 司 外 部 经 营 环 境 极 具 挑 战 性 的 一 年, 主 要 体 现 在 : 原 油 价 格 在 波 动 的 市 场 环 境 中 持 续 下 跌 ; 由 于 中 国 经 济 放 缓, 中 国 市 场 对 化 工 产 品 的 需 求 下 降 ; 各 种 产 品 价 差 与 前 后 月 差 的 价 格 发 生 剧 烈 波 动 尽 管 如 此, 集 团 有 一 整 套 全 面 的 风 险 控 制 工 具, 有 效 监 控 供 应 与 贸 易 业 务 的 风 险 除 此 之 外, 我 们 还 逐 步 提 高 关 键 风 险 的 可 见 性, 并 以 量 化 的 方 式 评 估 缓 解 措 施 如 何 降 低 风 险 1 黑 天 鹅 场 景 - 超 过 一 般 预 期 的 非 常 难 以 预 测 的 事 件 Round-the-clock monitoring at TSN-PEKCL Pipeline s control room 在 天 津 管 输 公 司 管 线 控 制 室 中 进 行 24 小 时 监 控 公 司 继 续 用 市 场 风 险 值 ( MVaR ) 来 衡 量 市 场 风 险 所 有 实 货 合 约 和 金 融 衍 生 品 合 约 都 受 市 场 风 险 值 限 额 管 理, 我 们 每 日 跟 踪 持 仓 价 值 的 变 化 董 事 会 授 权 的 一 系 列 市 场 风 险 限 额, 如 数 量 限 额 风 险 值 限 额 管 理 层 预 警 限 额 和 止 损 限 额 也 在 每 日 跟 踪 范 围 内, 定 期 的 回 溯 测 试 则 可 以 确 保 我 们 风 险 值 模 型 的 适 合 性 此 外, 风 险 管 理 团 队 采 纳 了 一 套 标 准 化 的 压 力 测 试 场 景, 在 黑 天 鹅 场 景 1 中 纳 入 油 价 的 剧 烈 波 动, 完 善 日 常 风 险 管 控 措 施 鉴 于 2015 年 市 场 的 剧 烈 动 荡, 临 时 进 行 压 力 测 试 的 频 率 明 显 增 加 这 些 举 措 使 得 公 司 管 理 层 可 以 更 加 及 时 地 了 解 到 未 来 市 场 可 能 的 极 端 情 况, 有 针 对 性 地 采 取 防 范 性 的 措 施 在 市 场 波 动 剧 烈 的 情 况 下, 我 们 持 续 保 持 谨 慎 可 控 的 低 风 险 偏 好, 并 据 此 控 制 2015 年 供 应 和 贸 易 的 规 模, 影 响 了 2015 年 供 应 与 贸 易 量 基 于 95% 的 可 信 度,2015 年 平 均 每 日 市 场 风 险 值 仍 保 持 在 稳 定 水 平, 为 60.6 万 美 元 信 用 风 险 及 集 中 程 度 分 析 鉴 于 公 司 业 务 性 质, 信 用 风 险 不 可 避 免, 是 集 团 所 面 临 的 一 项 最 显 著 的 可 衡 量 的 风 险 信 用 风 险 可 分 为 信 用 违 约 风 险 集 中 度 风 险 和 国 家 风 险 : 信 用 违 约 风 险 是 由 于 贸 易 对 家 无 法 全 额 偿 还 债 务 而 造 成 损 失 的 风 险 集 中 度 风 险 是 某 个 公 司 的 一 个 或 一 组 风 险 敞 口 带 来 的 潜 在 损 失, 对 该 公 司 继 续 经 营 能 力 能 够 造 成 威 胁 的 风 险 国 家 风 险 或 主 权 风 险 是 一 个 国 家 冻 结 外 汇 支 付 或 不 履 行 其 债 务 而 造 成 损 失 的 风 险

73 Annual Report 根 据 内 部 信 用 评 级 为 了 积 极 管 理 信 用 风 险, 我 们 通 过 观 察 其 财 务 状 况 运 营 和 付 款 记 录 以 及 进 行 背 景 调 查 对 各 贸 易 对 家 的 信 用 状 况 做 定 期 评 估, 根 据 所 获 得 的 信 息 授 予 对 家 合 适 的 信 用 条 款 及 限 额 我 们 也 将 未 来 潜 在 风 险 ( PFE ) 的 计 算 纳 入 信 用 监 督 和 控 制 流 程 中 这 种 方 法 评 估 在 一 个 特 定 的 时 间 范 围 内 一 定 的 置 信 水 平 上, 未 来 市 场 价 格 的 波 动 对 目 前 交 易 造 成 的 最 大 信 用 风 险 这 使 我 们 能 够 识 别 所 进 行 的 交 易 带 来 的 潜 在 信 用 敞 口 我 们 还 会 定 期 制 作 集 中 度 风 险 报 告, 回 顾 和 评 估 集 团 对 主 要 国 家 产 品 和 内 部 信 用 评 级 的 集 中 度 风 险 我 们 应 收 账 款 的 集 中 度 风 险 状 况 如 下 : 根 据 国 家 截 至 2015 年 12 月 31 日, 根 据 地 理 位 置, 我 们 的 信 用 敞 口 主 要 来 自 中 国 (86%), 新 加 坡 (7%) 和 美 国 (6.5%), 占 总 敞 口 99% 以 上 从 整 个 财 年 来 看, 信 用 敞 口 主 要 来 自 中 国 (63.4%), 新 加 坡 (23.4%) 和 香 港 (6.6%), 占 整 年 均 敞 口 的 93% 由 于 集 团 业 务 发 展, 我 们 对 这 三 个 地 区 以 外 的 贸 易 对 家 的 敞 口 在 过 去 几 年 里 稳 定 增 长, 因 为 我 们 一 直 在 拓 展 多 元 化 业 务, 平 衡 业 务 的 地 理 范 围 截 至 2015 年 12 月 31 日, 内 部 信 用 评 级 方 面, 信 用 敞 口 主 要 来 自 于 评 级 为 A(7%),B(49%) 和 C(42%) 级 别 的 贸 易 对 家, 占 总 敞 口 95% 以 上 2015 财 年, 来 自 评 级 为 A(8.8%),B(60.6%) 和 C(26.1%) 级 别 的 贸 易 对 家 占 总 敞 口 的 超 过 95%, 与 2014 年 类 似 对 D 级 和 E 级 对 家, 他 们 信 用 质 量 较 差, 我 们 授 予 他 们 的 付 款 条 件 为 以 信 用 证 为 基 础 或 提 前 支 付, 这 有 效 地 降 低 了 风 险 我 们 也 在 必 要 时 使 用 信 用 增 强 或 风 险 减 缓 工 具, 包 括 获 取 母 公 司 担 保 现 金 担 保 投 资 级 别 银 行 开 具 的 信 用 证 合 同 中 的 抵 销 条 款 以 及 国 际 掉 期 及 衍 生 工 具 协 会 ( ISDA ) 协 议 中 的 信 贷 支 持 附 件 我 们 在 2015 年 强 化 应 收 账 款 的 管 理, 通 过 信 用 证 折 现 等 措 施 加 快 资 金 周 转, 降 低 了 整 体 的 信 用 风 险 我 们 也 在 不 断 寻 求 其 他 减 缓 信 用 风 险 的 工 具, 比 如 信 用 保 险 等, 进 一 步 降 低 我 们 的 风 险 敞 口 有 了 这 些 强 化 措 施, 我 们 有 能 力 更 好 地 管 理 日 常 贸 易 活 动 带 来 的 风 险 集 团 正 在 向 成 为 全 球 一 流 的 运 输 燃 料 供 应 商 的 战 略 目 标 大 步 迈 进, 在 此 过 程 中 将 继 续 推 行 稳 健 的 风 险 意 识 文 化, 强 化 日 常 运 营 中 的 风 险 管 理, 创 造 可 持 续 的 股 东 价 值 Employees conducting routine checks at TSN-PEKCL Pipeline 员 工 对 管 输 公 司 的 管 线 进 行 常 规 检 查

74 72 China Aviation Oil (Singapore) Corporation Ltd Human Capital As CAO moves into its next phase of growth, its human resources ( HR ) play a crucial role in delivering CAO s business strategies and ambition to be a global toptier integrated transportation fuels provider. Recognising employees as our most valuable asset, the Group s human capital strategy remains focused on cultivating an inclusive corporate culture where employees can positively contribute to the sustained growth of the Group. ENGAGING OUR PEOPLE At CAO, our corporate culture is built on a foundation of fairness, integrity, innovation and transparency, and we constantly strive to foster a collaborative and mutually supportive corporate environment through various activities and initiatives to engage employees. Underscoring the important role employees play in achieving our strategic goals, all new employees are required to undergo a comprehensive orientation programme to get acquainted with the Group s businesses and operations, familiarised with the shared values of fairness, integrity, innovation and transparency, CAO s vision and culture. Throughout the year, team-building activities such as weekly health and fitness sessions, participation in sports tournaments and marathons, festive celebrations and corporate volunteering programmes are organised to encourage cross-functional interaction and communication, promote a sense of belonging and strengthen cohesiveness amongst employees. In the belief that engaged employees deliver better results and enhance the performance of the Group, measures have been introduced over the years to enhance trust and enthusiasm, empowering employees to innovate and contribute to the Group s progress. These measures included cross-functional knowledge sharing sessions, as well as holding brain-storming sessions encouraging employees to evaluate business processes and policies, develop business acumen and technical skills. As part of our HR engagement efforts, the Group initiated a Work Organisation and Innovative Committee in 2015 to recognise innovative ideas for work procedures and process enhancements to encourage an innovative and engaged workforce that will sustain the future growth of the Company. Since 2011, Employee Engagement surveys, including its follow-up action plans have been used as a HR development tool throughout the CAO Group. The latest survey, conducted in 2014, showed an overall 89% favourability in employee engagement and satisfaction. Management has committed itself to act on the findings to continuously improve on employee engagement. DIVERSITY & INCLUSION At CAO, we recognise that a fair, diversified and inclusive working environment is integral to the Group s success and that a diverse workforce with specialised, complementary skillsets, ideas and experiences enriches the workplace and enhances business performance. In accordance with the Employer s Pledge of Fair Employment Practices which was formulated by the Singapore Tripartite Alliance for Fair Employment Practices ( TAFEP ), we affirm our commitment to competitive workplace practices. Our HR policies are aligned to the Tripartite Guidelines on Fair Employment Practices formulated by TAFEP and CAO upholds this through a variety of measures including nondiscriminatory recruitment advertisements, regular performance appraisal for employees, instilling a code of ethics and establishing an appropriate avenue for employee grievances. CAO also supports the Fair Consideration Framework by the Ministry of Manpower, Singapore. Available job vacancies at CAO are made publicly accessible at the Jobs Bank administered by the Workforce Development Agency of Singapore. The Group has a total headcount of 95 employees worldwide as at end 2015, a decrease of 2% over 2014, of which 71 employees are based in Singapore. Globally, the average attrition rate over the past 5 years was 10%. The group s gender profile is approximately a 50:50 split between men and women, and out of which 70% of the employees are in the age group. DEVELOPING OUR PEOPLE In line with our drive for sustainability development, the Group continuously seeks to attract, engage and retain our talent pool by supporting and offering education, training, career planning and advancement opportunities, therein boosting their career mobility. To ensure the internal talent bench is strong and their capabilities continuously strengthened, we are focused on people development, and have always encouraged and supported employees for ongoing training and development programmes to help the Group to develop the competences it needs with increased business activities and to fuel future growth. Each year, more than 75% of the workforce undergoes professional training programmes such as technical-

75 Annual Report Employee Profile CAO 员 工 组 成 4% 62% 31% 3% 34% 32% 25% 9% 75% 12% 11% 2% 25 and below Between 26 to 39 Between 40 to 54 Employees Age Structure 员 工 年 龄 结 构 Above 55 based and soft skills learning and development courses. Within the Group, regular Lunch & Learn sessions conducted by employees for their peers and colleagues to share and pick up cross-functional knowledge and skills were introduced, contributing substantially to a holistic learning process. In addition, the Group also actively nurtures and further develops our employees to achieve their full potential through new opportunities across our business units, in various functional disciplines and throughout the geographic regions where we do business. To further develop existing employees capabilities, the Group has put in place a job rotation programme with selected employees seconded to host departments for a period of time to enhance their skills for job or function specific roles. REWARDING PERFORMANCE Less than 3 years Between 3 to 5 years Between 6 to 10 years 11 years and more Employees by Years of Service 员 工 服 务 时 间 Singapore Hong Kong North America Europe Employees by Country 员 工 供 职 所 在 国 BUILDING A RESILIENT WORKFORCE To build a resilient workforce, the Group is committed to continually improve our engagement initiatives to provide a safe, healthy and inclusive workplace for our employees. Embedding strong business ethics in our business practices, familiarising ourselves with Safety, Health and Environment ( SHE ) standards as well as protecting the privacy of our employees are of central importance at CAO. Under CAO s Code of Ethics, all employees are expected to upkeep a high standard of integrity in matters of conduct at all times. We demand employees to be mindful and avoid improper circumstances and actions that might give the appearance of wrongdoing which could discredit themselves, co-workers or CAO. CAO s compensation policy and practices are designed to motivate employees to support the Group s growth trajectory. Our employees pay is market-oriented, taking into account an individual s job value, individual performance as well as the company s success. Periodically, salary benchmarking is conducted to ensure the Group remains competitive in attracting and retaining employees. In addition, CAO has in place a performance appraisal system that is continuously enhanced and improved to ensure that the core competencies of our employees are aligned with the Group s strategic targets. Employees and their immediate superiors are encouraged to discuss and review their annual work objectives and job performance periodically, with line managers required to review employees performance bi-annually. Any areas of specific achievement and/or needs for improvement are noted and discussed openly with employees during performance appraisals. Apart from the business conduct guidelines, protecting the health and safety of our employees, business partners and the environment is a priority at CAO. To highlight the importance of occupational health and workplace safety, a SHE policy and guidelines was rolled out. Annual health screenings, pandemic illness updates, mandatory workplace health and safety briefings and fire drills are held regularly throughout the year to reinforce that SHE is a responsibility of all employees and that keeping the workplace and environment safe is of paramount importance to the CAO work culture. In accordance with the Personal Data Protection Act which came into force in 2014, CAO has in place a Personal Data Protection policy which sets out to safeguard the proper management, use and disclosure of personal data of our employees. To accomplish this, access to employee data will be limited to only those that have a legitimate business need or to fulfill a legal requirement.

76 74 China Aviation Oil (Singapore) Corporation Ltd 人 力 资 源 随 着 CAO 进 入 新 的 发 展 阶 段, 大 力 实 施 发 展 战 略, 努 力 成 为 全 球 一 流 的 运 输 燃 料 一 体 化 提 供 商, 人 力 资 源 在 其 中 扮 演 了 至 关 重 要 的 角 色 我 们 认 为 员 工 是 集 团 最 有 价 值 的 资 产, 集 团 的 人 力 资 源 战 略 也 强 调 打 造 有 包 容 性 的 企 业 文 化, 鼓 励 员 工 积 极 为 公 司 可 持 续 发 展 贡 献 力 量 增 强 员 工 参 与 度 CAO 的 企 业 文 化 建 立 于 公 平 诚 信 创 新 和 透 明 的 基 础 之 上, 我 们 通 过 多 种 公 司 活 动, 不 断 努 力 打 造 合 作 友 爱 互 助 的 工 作 环 境 由 于 员 工 是 CAO 实 现 战 略 目 标 尤 为 重 要 的 一 环, 所 有 新 员 工 都 需 要 进 行 入 职 培 训, 使 他 们 熟 悉 集 团 的 业 务 和 运 营, 了 解 公 司 价 值 观 ( 即 公 平 诚 信 创 新 和 透 明 ) 愿 景 和 企 业 文 化 这 些 年 来, 公 司 会 坚 持 组 织 团 队 活 动, 如 每 周 身 体 锻 炼, 参 加 体 育 竞 赛 和 马 拉 松, 节 日 庆 祝 活 动 和 企 业 志 愿 者 项 目, 鼓 励 各 部 门 之 间 的 交 流, 培 养 员 工 的 归 属 感 和 团 结 精 神 我 们 相 信 参 与 度 高 的 员 工 往 往 会 有 更 好 的 工 作 表 现, 提 高 公 司 的 业 绩 因 此 我 们 使 用 多 种 措 施 加 强 互 信 和 员 工 的 工 作 热 情, 鼓 励 员 工 创 新 这 些 措 施 包 括 : 跨 部 门 知 识 分 享 共 同 头 脑 风 暴 评 估 业 务 流 程 和 政 策 培 养 商 业 敏 感 度 和 专 业 技 能 公 司 还 在 2015 年 设 立 了 工 作 组 织 与 创 新 小 组, 表 彰 改 善 工 作 流 程 的 创 新 想 法 和 有 利 于 公 司 持 续 发 展 的 创 新 提 议 2011 年 起,CAO 集 团 全 面 实 施 了 员 工 参 与 度 调 查 以 及 后 续 的 跟 进 措 施 在 2014 年 实 施 的 最 新 调 查, 员 工 整 体 参 与 度 和 满 意 度 评 分 为 89% 管 理 层 也 在 不 断 改 进, 加 强 员 工 参 与 度 多 元 化 与 包 容 我 们 相 信 公 平 多 元 化 有 包 容 性 的 工 作 氛 围 对 集 团 的 成 功 必 不 可 少, 多 样 性 的 团 队 可 以 实 现 技 术 观 念 与 经 验 的 互 补, 也 可 以 提 升 业 绩 表 现 按 照 新 加 坡 公 平 就 业 实 践 三 方 联 盟 ( TAFEP ) 提 出 的 公 平 就 业 实 践 雇 主 承 诺, 我 们 致 力 于 打 造 有 竞 争 力 的 工 作 环 境 CAO 按 照 TAFEP 制 定 的 公 平 就 业 实 践 三 方 指 南, 制 定 了 公 司 人 力 资 源 政 策, 并 在 各 方 面 贯 彻 执 行, 如 刊 登 非 歧 视 的 招 聘 广 告 定 期 进 行 员 工 绩 效 评 估 灌 输 道 德 准 则 并 为 员 工 负 面 情 绪 提 供 疏 通 渠 道 CAO 还 遵 守 新 加 坡 人 力 部 公 平 考 量 框 架 的 要 求, 在 新 加 坡 劳 动 力 发 展 局 管 理 的 职 位 信 息 库 中 公 布 职 位 空 缺 截 至 2015 年 底, 集 团 总 人 数 为 95 人, 相 比 2014 年 减 少 2%, 其 中 71 个 员 工 在 新 加 坡 全 球 范 围 内, 过 去 五 年 平 均 离 职 率 为 10% 集 团 的 性 别 比 例 大 约 50:50, 其 中 70% 的 员 工 在 年 龄 区 间 员 工 培 育 为 了 集 团 的 可 持 续 发 展, 我 们 通 过 提 供 教 育 培 训 职 业 规 划 和 上 升 机 会, 持 续 吸 引 和 努 力 留 住 人 才, 并 为 其 今 后 职 业 生 涯 的 发 展 拓 宽 渠 道 为 了 确 保 员 工 业 务 水 准 不 落 后, 且 不 断 提 高, 我 们 专 注 于 员 工 发 展, 鼓 励 和 支 持 员 工 进 行 持 续 培 训 和 发 展 项 目, 帮 助 集 团 打 造 业 务 拓 展 所 需 的 竞 争 力, 支 持 未 来 发 展 每 年 超 过 75% 的 员 工 接 受 专 业 培 训 项 目, 包 括 技 术 培 训 和 软 技 能 培 训 与 发 展 课 程 集 团 内 部 还 有 午 餐 学 习 环 节, 由 员 工 自 己 组 织, 与 同 事 分 享 跨 部 门 知 识 和 技 能, 创 造 全 面 的 学 习 体 验 除 此 之 外, 集 团 还 积 极 培 养 员 工, 帮 助 他 们 通 过 多 业 务 地 区 多 部 门 的 新 机 会, 挖 掘 自 身 潜 力 为 了 进 一 步 发 展 现 有 员 工 的 能 力, 集 团 制 定 了 轮 岗 计 划, 将 特 定 员 工 外 派 至 其 他 部 门 一 段 时 间, 加 强 他 们 在 某 一 职 位 的 技 术 能 力 绩 效 奖 励 CAO 的 薪 酬 政 策 和 做 法 激 励 员 工 为 集 团 的 发 展 尽 一 己 之 力 我 们 的 薪 酬 福 利 是 以 市 场 为 导 向, 考 虑 了 每 个 员 工 的 工 作 价 值 个 人 表 现 和 公 司 的 业 绩 表 现 公 司 会 定 期 评 估 薪 酬 水 平, 确 保 集 团 具 有 竞 争 力, 可 以 吸 引 和 留 住 员 工 除 此 之 外,CAO 持 续 改 善 绩 效 评 估 系 统, 确 保 员 工 的 核 心 竞 争 力 符 合 集 团 的 战 略 目 标 我 们 鼓 励 员 工 和 他 们 的 直 属 上 司 定 期 讨 论 和 回 顾 年 度 工 作 目 标 和 工 作 表 现, 直 属 上 司 每 半 年 回 顾 员 工 表 现, 讨 论 总 结 取 得 的 成 绩 和 需 要 改 进 的 地 方 打 造 坚 实 的 员 工 队 伍 为 了 打 造 坚 实 的 员 工 队 伍, 集 团 持 续 为 员 工 打 造 提 供 安 全 健 康 和 有 包 容 性 的 工 作 环 境 我 们 在 业 务 中 践 行 高 标 准 的 商 业 道 德 准 则, 秉 持 安 全 健 康 环 境 ( SHE ) 标 准, 保 护 员 工 隐 私, 这 些 对 CAO 都 至 关 重 要 按 照 CAO 的 道 德 准 则, 所 有 员 工 在 任 何 时 候 的 所 有 行 为 都 必 须 保 持 高 标 准 的 诚 信 我 们 要 求 员 工 保 持 警 惕, 避 免 任 何 不 当 行 为 影 响 自 己 其 他 员 工 或 CAO 的 名 誉 除 了 业 务 操 作 规 则, 保 护 员 工 商 业 伙 伴 和 环 境 的 健 康 和 安 全 是 公 司 的 重 中 之 重 为 了 强 调 员 工 健 康 和 工 作 环 境 安 全 的 重 要 性, 公 司 制 定 了 SHE 政 策, 包 括 年 度 体 检 流 行 病 介 绍 工 作 场 所 安 全 与 卫 生 讲 解 和 火 警 演 习, 向 员 工 强 调 SHE 是 每 一 个 员 工 的 责 任, 保 持 工 作 环 境 的 安 全 至 关 重 要 随 着 新 加 坡 个 人 信 息 保 护 法 于 2014 年 生 效,CAO 制 定 了 个 人 信 息 保 护 政 策, 规 定 员 工 个 人 信 息 的 合 理 管 理 使 用 和 披 露 只 有 在 有 合 理 的 商 业 需 要 或 有 法 律 要 求 的 情 况 下 才 可 以 获 得 员 工 信 息

77 Annual Report Corporate Social Responsibility At CAO, we are committed to the communities where we operate, and continually take on social responsibility initiatives, channelling resources to add value and support the causes we hold dear. Ours is a CSR programme focused on access to education for children, development of skills and lifelong learning for new immigrants and environment-related initiatives. INVESTING IN COMMUNITIES CAO approaches investing in communities through strategic partnerships with non-government organisations and community groups. For the past six years, CAO has been involved with Beyond Social Services pre-school facility Healthy Start Child Development Centre ( HSCDC ), contributing and supporting educational initiatives for less privileged children from the Singapore s Bukit Merah and Redhill neighbourhood estates. In 2015, CAO hosted an experiential learning workshop at Playeum, a children s play museum, for over 40 preschoolers, their families and teachers where the preschoolers explored a Shadow Play installation and learnt how light and shadows interact. At the same time, CAO volunteers also got together with the pre-schoolers to experiment and tinker with recycled materials to build movable objects, providing the pre-schoolers a fun experience to play, create and learn through creative interactions. Extending our longstanding commitment to create access to education, CAO has also reached out to the HSCDC pre-schoolers and their families, sponsoring Back-to-School packs with basic school supplies such as stationery, water bottles and schoolbags for HSCDC s year-end pre-school graduation event. Since 2010, CAO has continually supported the educational needs of the less privileged members of the migrant community through the CAO-Tian Fu Bursary Fund. Besides disbursing funds to students who have excelled academically or come from lowerincome families, cash grants are also provided to assist new immigrants working in Singapore to upgrade their skills and enhance their employability and contribution to the Singapore economy. With the funding, CAO has benefitted 115 school-going students and working adults over the past five years. In line with our aspirations to be a global trader of transportation fuels, CAO stepped up its social commitment to education by making a targeted contribution amounting to S$200,000, to the International Trading Programme at Nanyang Technological University of Singapore over the next four years. With the sponsorship, CAO will work with industry partners to support a range of initiatives that include the developing of a talent pipeline for the sector, sharing of knowledge through dialogues, seminars, as well as providing internships for students in the programme track. During the year, the Group has continued to support the education development of children in regional communities where we do business. Partnering The Library Project, a non-government charitable organization focused on setting up libraries and/or reading corners for under-funded elementary schools in remote parts of China, CAO donated over 1,000 brand new books, including bookshelves and teaching materials to three schools at the Ningxia Hui Autonomous Region in the northwest of China. Through the collaboration with The Library Project, CAO aims to promote and inculcate an interest for reading in young children. For 2015, we have also worked with a Project School in Chengdu, China Wan An Fu He Elementary School, and sponsored communal facilities to enhance the learning experience of its students. PROMOTING ENVIRONMENTAL CONSCIOUSNESS As the Group becomes increasingly international, we are also conscious of our responsibility to create and promote environmental consciousness and support conservation efforts in local communities. CAO s collaboration with National Parks Board ( NParks ) of Singapore, initiated in 2014, to develop a series of themed educational videos to promote greater environment awareness within the community as well as showcase the rich biodiversity that can be found in urban Singapore, fully reflects our commitment to sustainable green initiatives. The commissioned videos are disseminated to media, schools, tertiary institutions and played at various locations across Singapore, including the Singapore Botanic Gardens, as an ongoing effort to promote environmental awareness in Singapore. STAYING ON THE SUSTAINABILITY COURSE Underpinning the Group s corporate strategy is our corporate philosophy : Creating value for communities. By promoting and integrating sustainability aspects into our everyday business, we ensure long-term sustainability for our core businesses. As the Group moves into its next growth phase, CAO remains committed to advancing sustainability and resilience, and will continue to work with our stakeholders, sharing our time and resources to foster positive impact in communities around the world.

78 76 China Aviation Oil (Singapore) Corporation Ltd 企 业 社 会 责 任 CAO volunteers spending time with HSCDC pre-schoolers at experiential play museum Playeum 公 司 志 愿 者 与 HSCDC 的 小 朋 友 同 游 儿 戏 轩 CAO 致 力 于 对 我 们 经 营 所 在 的 社 区 做 出 有 意 义 的 贡 献, 并 持 续 通 过 企 业 社 会 责 任 活 动, 为 社 会 输 送 资 源 和 增 加 价 值, 实 现 我 们 的 理 念 我 们 的 企 业 社 会 责 任 活 动 专 注 于 儿 童 教 育 新 移 民 的 技 能 培 养 和 终 身 学 习 以 及 环 保 活 动 投 资 社 区 CAO 通 过 与 非 政 府 组 织 和 社 区 团 体 的 战 略 合 作, 对 社 区 进 行 投 资 在 过 去 六 年 中,CAO 与 彼 岸 社 会 服 务 的 学 前 儿 童 分 支 机 构 彼 岸 社 会 服 务 健 康 起 点 儿 童 发 展 中 心 ( HSCDC ) 合 作, 支 持 新 加 坡 武 吉 美 拉 和 红 山 社 区 贫 困 学 前 儿 童 的 教 育 括 为 行 业 培 养 储 备 人 才, 通 过 交 流 研 讨 会 分 享 行 业 知 识, 同 时 在 项 目 运 行 期 间 为 学 生 提 供 实 习 机 会 本 年 度,CAO 继 续 支 持 公 司 业 务 所 在 地 的 社 区 孩 童 的 教 育 发 展, 与 图 书 馆 计 划 ( 非 政 府 慈 善 机 构, 致 力 于 为 中 国 偏 远 地 区 缺 乏 资 金 的 小 学 建 造 图 书 馆 和 / 或 读 书 角, 传 播 对 书 籍 和 阅 读 的 热 情 ) 合 作, 向 位 于 中 国 西 北 部 的 宁 夏 回 族 自 治 区 的 三 所 小 学 捐 赠 了 超 过 1000 本 崭 新 的 书 书 架 和 教 学 材 料, 希 望 可 以 借 此 培 养 中 国 儿 童 的 阅 读 兴 趣 2015 年, 我 们 也 与 中 国 成 都 的 万 安 福 希 望 小 学 合 作, 赞 助 了 公 共 设 施, 改 善 学 生 的 学 习 体 验 提 高 环 保 意 识 2015 年,CAO 在 一 家 专 为 儿 童 打 造 的 玩 乐 博 物 馆 儿 戏 轩 ( Playeum ) 组 织 了 体 验 式 学 习 活 动, 与 超 过 40 个 学 前 儿 童 家 长 和 老 师 一 起 探 索 了 皮 影 戏 的 光 影 原 理 同 时,CAO 志 愿 者 也 与 学 前 儿 童 一 起 用 回 收 物 品 建 造 可 移 动 物 件, 让 他 们 通 过 创 意 互 动, 尽 情 玩 耍 学 习 和 创 造 此 外, 出 于 长 久 以 来 对 普 及 教 育 的 重 视,CAO 为 HSCDC 学 前 儿 童 的 年 末 毕 业 典 礼 准 备 了 入 学 大 礼 包, 内 含 学 生 基 本 用 具, 如 文 具 水 壶 书 包 自 2010 年 起,CAO 就 通 过 中 国 航 油 - 天 府 会 助 学 基 金 支 持 贫 困 新 移 民 的 教 育 需 求 除 了 赞 助 成 绩 优 异 或 来 自 低 收 入 家 庭 的 学 子, 我 们 还 发 放 资 金 帮 助 新 加 坡 的 新 移 民 提 升 技 能, 加 强 就 业 能 力, 为 新 加 坡 经 济 做 出 贡 献 通 过 过 去 五 年 间 的 资 金 援 助,CAO 帮 助 了 115 名 学 龄 儿 童 和 就 业 人 员 在 致 力 于 成 为 全 球 运 输 燃 料 贸 易 商 的 同 时,CAO 还 承 诺 在 接 下 来 的 4 年 中, 向 新 加 坡 南 洋 理 工 大 学 的 全 球 贸 易 商 计 划 赞 助 20 万 新 元, 作 为 对 社 会 的 教 育 投 入 通 过 赞 助,CAO 会 和 行 业 中 的 合 作 伙 伴 支 持 一 系 列 活 动, 包 随 着 集 团 走 向 国 际 化, 我 们 深 知 CAO 在 本 地 社 区 培 养 和 推 广 环 保 意 识 的 责 任 2014 年,CAO 与 新 加 坡 国 家 公 园 局 ( 公 园 局 ) 合 作, 制 作 了 一 系 列 主 题 教 育 视 频, 旨 在 提 高 环 保 意 识, 也 展 示 了 新 加 坡 城 区 的 生 物 多 样 性, 体 现 了 我 们 对 环 保 的 承 诺 视 频 被 推 广 给 媒 体 学 校 高 等 院 校, 也 在 新 加 坡 多 地 进 行 播 放, 包 括 新 加 坡 植 物 园, 持 续 推 广 新 加 坡 社 区 的 环 保 意 识 坚 持 可 持 续 发 展 在 CAO 公 司 战 略 指 导 下 的 公 司 理 念 是 : 在 我 们 生 活 和 工 作 的 地 方 为 社 会 创 造 价 值 通 过 在 每 日 运 营 中 推 广 和 践 行 可 持 续 性, 可 以 确 保 核 心 业 务 的 长 期 可 持 续 发 展 随 着 集 团 进 入 下 一 阶 段 的 发 展,CAO 致 力 于 加 强 可 持 续 性, 成 为 更 加 稳 健 的 公 司, 并 继 续 与 各 方 合 作, 投 入 时 间 与 资 源, 对 全 世 界 的 各 个 社 区 产 生 积 极 影 响

79 Annual Report Corporate Governance at a Glance Guideline Questions How has the Company complied? General (a) Has the Company complied with all the principles and guidelines of the Code? If not, please state the specific deviations and the alternative corporate governance practices adopted by the Company in lieu of the recommendations in the Code. Yes. Refer to page 81 (b) In what respect do these alternative corporate governance practices achieve the objectives of the principles and conform to the guidelines in the Code? Not Applicable Board Responsibility Guideline 1.5 What are the types of material transactions which require approval from the Board? Refer to page 82 Members of the Board Guideline 2.6 (a) What is the Board s policy with regard to diversity in identifying director nominees? Refer to pages 82 and 88 (b) (c) Please state whether the current composition of the Board provides diversity on each of the following skills, experience, gender and knowledge of the Company, and elaborate with numerical data where appropriate. What steps has the Board taken to achieve the balance and diversity necessary to maximise its effectiveness? Refer to Board of Directors Section of the Annual Report Refer to pages 88 to 90 Guideline 4.6 Please describe the board nomination process for the Company in the last financial year for (i) selecting and appointing new directors and (ii) re-electing incumbent directors. Refer to pages 86, 88 and 89 Guideline 1.6 (a) Are new directors given formal training? If not, please explain why. Refer to page 84 (b) What are the types of information and training provided to (i) new directors and (ii) existing directors to keep them up-to-date? Refer to page 84 Guideline 4.4 (a) What is the maximum number of listed company board representations that the Company has prescribed for its directors? What are the reasons for this number? Refer to page 89 (b) If a maximum number has not been determined, what are the reasons? Not Applicable (c) What are the specific considerations in deciding on the capacity of directors? Refer to page 89

80 78 China Aviation Oil (Singapore) Corporation Ltd Corporate Governance at a Glance Guideline Questions How has the Company complied? Board Evaluation Guideline 5.1 (a) What was the process upon which the Board reached the conclusion on its performance for the financial year? Refer to pages 89 and 90 (b) Has the Board met its performance objectives? Yes Independence of Directors Guideline 2.1 Does the Company comply with the guideline on the proportion of independent directors on the Board? If not, please state the reasons for the deviation and the remedial action taken by the Company. Refer to page 85 Guideline 2.3 (a) Is there any director who is deemed to be independent by the Board, notwithstanding the existence of a relationship as stated in the Code that would otherwise deem him not to be independent? If so, please identify the director and specify the nature of such relationship. None (b) What are the Board s reasons for considering him independent? Please provide a detailed explanation. Not Applicable Guideline 2.4 Has any independent director served on the Board for more than nine years from the date of his first appointment? If so, please identify the director and set out the Board s reasons for considering him independent. None Disclosure on Remuneration Guideline 9.2 Has the Company disclosed each director s and the CEO s remuneration as well as a breakdown (in percentage or dollar terms) into base/fixed salary, variable or performance-related income/bonuses, benefits in kind, stock options granted, sharebased incentives and awards, and other long-term incentives? If not, what are the reasons for not disclosing so? Yes. Refer to page 93 Guideline 9.3 (a) Has the Company disclosed each key management personnel s remuneration, in bands of S$250,000 or in more detail, as well as a breakdown (in percentage or dollar terms) into base/fixed salary, variable or performancerelated income/bonuses, benefits in kind, stock options granted, share-based incentives and awards, and other long-term incentives? If not, what are the reasons for not disclosing so? Yes. Refer to page 94 (b) Please disclose the aggregate remuneration paid to the top five key management personnel (who are not directors or the CEO). Refer to page 94

81 Annual Report Corporate Governance at a Glance Guideline Questions How has the Company complied? Disclosure on Remuneration (continued) Guideline 9.4 Is there any employee who is an immediate family member a director or the CEO, and whose remuneration exceeds S$50,000 during the year? If so, please identify the employee and specify the relationship with the relevant director or the CEO. None. Refer to page 94 Guideline 9.6 (a) Please describe how the remuneration received by executive directors and key management personnel has been determined by the performance criteria. Refer to page 94 (b) What were the performance conditions used to determine their entitlement under the shortterm and long-term incentive schemes? Refer to Page 94 (c) Were all of these performance conditions met? If not, what were the reasons? Yes Risk Management and Internal Controls Guideline 6.1 What types of information does the Company provide to independent directors to enable them to understand its business, the business and financial environment as well as the risks faced by the Company? How frequently is the information provided? Refer to pages 90 and 91 Guideline 13.1 Does the Company have an internal audit function? If not, please explain why. Internal audit function is outsourced. Refer to page 100 Guideline 11.3 (a) In relation to the major risks faced by the Company, including financial, operational, compliance, information technology and sustainability, please state the bases for the Board s view on the adequacy and effectiveness of the Company s internal controls and risk management systems. Refer to page 97 (b) In respect of the past 12 months, has the Board received assurance from the CEO and the CFO as well as the internal auditor that: (i) the financial records have been properly maintained and the financial statements give true and fair view of the Company s operations and finances; and (ii) the Company s risk management and internal control systems are effective? If not, how does the Board assure itself of points (i) and (ii) above? Refer to page 97

82 80 China Aviation Oil (Singapore) Corporation Ltd Corporate Governance at a Glance Guideline Questions How has the Company complied? Risk Management and Internal Controls (continued) Guideline 12.6 (a) Please provide a breakdown of the fees paid in total to the external auditors for audit and non-audit services for the financial year. Refer to page 156 of the Annual Report (b) If the external auditors have supplied a substantial volume of non-audit services to the Company, please state the bases for the Audit Committee s view on the independence of the external auditors. Not Applicable Communication with Shareholders Guideline 15.4 (a) Does the Company regularly communicate with shareholders and attend to their questions? How often does the Company meet with institutional and retail investors? Yes. Refer to pages 100 and 101 (b) (c) Is this done by a dedicated investor relations team (or equivalent)? If not, who performs this role? How does the Company keep shareholders informed of corporate developments, apart from SGXNET announcements and the annual report? Yes. Refer to page 100 Refer to pages 100 and 101 Guideline 15.5 If the Company is not paying any dividends for the financial year, please explain why. Not Applicable

83 Annual Report Statement of Corporate Governance Global economies continued to be saddled with uncertainties and downside risks such as depressed oil prices, volatilities in the financial markets and geopolitical risks. Despite this increasingly challenging and difficult business environment, achieving the highest standards of corporate governance through high levels of integrity and transparency remained adjunct to the overarching commitment of the Board of Directors (the Board ) and Management of China Aviation Oil (Singapore) Corporation Ltd ( CAO or the Company ). We strive to surpass the minimum requirements of openness, integrity and accountability prescribed by the Singapore Exchange Securities Trading Limited (the SGX-ST ) and the recommendations of the Code of Corporate Governance (the 2012 Code ). Good corporate governance has become a fundamental part of our corporate culture and business practices of the CAO group (the CAO Group ) and in ensuring the continued strong performance of our businesses and maintaining investor confidence which underpin the sustainable, long-term growth of our businesses and shareholder value. Since the adoption of the CAO Corporate Governance Policy in August 2012 which corporate governance principles and guidelines are devised in line with the principles and guidelines set out in the 2012 Code (the CAO Corporate Governance Policy ), significant efforts have been made by relevant departments mandated with the responsibility to oversee the adoption of the CAO Corporate Governance Policy in their practices, processes and operations. The corporate governance practices of the CAO Group and the CAO Corporate Governance Policy are reviewed regularly and are continually fine-tuned and enhanced to ensure that they remain relevant and effective in the light of changing legal and regulatory requirements and volatilities of the trading business and operating environment. We confirm that throughout the financial year ended 31 December 2015 and at the date of issue of this Statement of Corporate Governance, we were in substantial compliance with the provisions of, and applied the principles set out in the 2012 Code and are currently working towards adopting the other changes where appropriate. With the view to preserving and growing shareholder value through strong and effective corporate governance, the Board has put in place a set of well-defined and sound systems of internal controls and processes which the Company voluntarily subjects them to biennial review by an independent third party consultant. This report primarily describes the Company s corporate governance practices for the financial year ended 31 December 2015 with specific reference to the 2012 Code and details how we apply the principles and comply with the provisions of the 2012 Code. (A) BOARD MATTERS The Board s Conduct of its Affairs Principle 1 Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the company. The Board works with Management to achieve this and the Management remains accountable to the Board Commentary Composition of the Board: The current Board comprises eight (8) Non-Executive Directors and the Chief Executive Officer/ Executive Director (the CEO/ED ). All Independent Directors as well as those nominated by the two (2) major shareholders, namely China National Aviation Fuel Group Corporation ( CNAF ) and BP Investments Asia Limited ( BP ), were appointed on the strength of their expertise, experience and stature.

84 82 China Aviation Oil (Singapore) Corporation Ltd Statement of Corporate Governance The Board recognises and embraces the benefits of having a diverse Board and sees increasing diversity at Board level as an essential element in maintaining a competitive advantage. The Board is composed of members who are diverse in terms of education, skills, regional and industry experience, geographical origin, interpersonal skills, race, gender and age. Details including the academic and professional qualifications and major appointments of each Director are provided under the Board of Directors section of this Annual Report. Role of the Board: The Directors are collectively responsible to the Company s shareholders for the long-term success of the CAO Group and for its overall strategic direction, its values and its governance. They provide the Company with the core competencies and the leadership necessary for the CAO Group to meet its business objectives within the framework of its systems of internal controls and processes. All members of the Board are aware of their responsibility to take decisions objectively which promote the success of the CAO Group for the benefit of shareholders. The CAO Corporate Governance Policy sets forth the matters reserved for the Board s decision, and provides clear directions to Management on matters that must be approved by the Board. In addition, Management has the responsibility for overseeing the implementation by the CAO Group s operating subsidiaries of the policies and strategy set by the Board, and for creating the framework for their successful day-to-day operation. Some of the businesses that the Board transacts include: a) setting, reviewing and approving corporate strategies, annual budgets and financial plans; b) reviewing the adequacy and integrity of the Company s internal controls, risk management systems, financial reporting systems and monitoring the performance of the CAO Group and the Management; c) ensuring that the CAO Group and Management comply with all laws, regulations, policies, directives, guidelines and internal code of conduct; d) considering and approving the nominations of suitable candidates to the Board of Directors; and e) ensuring accurate, adequate and timely reporting to, and communication with shareholders. Key matters that are specifically reserved for the Board s consideration and decision include, but are not limited to, corporate planning, material acquisitions and disposals of assets, corporate or financial restructuring, formulation of any dividend policy or the change of such dividend policy, declaration of dividends, interested person transactions and any appointment, re-appointment or removal of the Chairman of the Board. Apart from matters specifically reserved for Board s consideration and decision, the Board will approve transactions exceeding certain threshold limits, whilst delegating authority for transactions below those limits to Board Committees and the Management for approval. Delegation of Authority to Board Committees: To ensure the efficient discharge of its responsibilities and to provide independent oversight of Management, various Board committees namely, the Audit Committee, the Nominating Committee, the Remuneration Committee and the Risk Management Committee have been constituted with clear written terms of reference. Each Committee has the authority to examine issues relevant to their terms of reference and to make recommendations to the Board for action. The ultimate responsibility and decision on all matters still lies with the Board. To optimise operational efficiency, the Company has put in place financial authorisation and approval limits for purchases and expenses requisitions as well as expenses/fees relating to costs of sales (within and outside the approved full-year budget).

85 Annual Report Statement of Corporate Governance Meetings of the Board and Board Committees: The Board met five (5) times in At scheduled quarterly Board meetings for the financial year 2015, the Board: (i) reviewed and approved the release of the quarterly and full-year results; (ii) discussed reports by Management relating to major corporate activities; (iii) approved the annual budget; and (iv) reviewed the performance of the CAO Group s businesses. When Directors cannot be physically present, telephonic attendance and conference via audiovisual communication at Board and Board committee meetings are allowed under the Constitution of the Company. The number of meetings of the Board and Board Committees held in 2015, as well as the attendance of each Board member at these meetings, are disclosed below: Board Committee Meetings Board Meetings (1) Audit Nominating Remuneration Risk Management Independent Directors Meeting Lin Wanli (2) 2 N.A. N.A. N.A. N.A. N.A. Sun Li (3) 3 N.A. N.A. N.A. N.A. N.A. Wang Kai Yuen N.A. 1 Meng Fanqiu 5 N.A. N.A. N.A. N.A. N.A. Ang Swee Tian Alan Haywood (4) 3 3 N.A. N.A. 3 N.A. Felipe Arbelaez (5) 2 1 N.A. N.A. 1 N.A. Chen Liming (6) 0 N.A. 0 0 N.A. N.A. Bella Young Pit Lai (7) 4 N.A. 1 1 N.A. N.A. Li Runsheng N.A. 1 Luo Qun 5 N.A. 1 2 N.A. N.A. Zhao Shousen (8) 4 3 N.A. N.A. 3 N.A. Number of Meetings Held Notes : (1) Includes a Board strategy discourse on CAO s 2020 Strategy held on 12 November (2) Mr Lin Wanli was appointed as a Non-Independent Director and Chairman of the Board on 11 August (3) Mr Sun Li, Chairman resigned as a Non-Independent Director and Chairman of the Board on 11 August (4) Mr Alan Haywood resigned as a Non-Independent Director on 30 July He concurrently relinquished his office as Chairman of the Risk Management Committee and as a member of the Audit Committee. (5) Mr Felipe Arbelaez was appointed as a Non-Independent Director on 30 July He was concurrently appointed as Chairman of the Risk Management Committee and as a member of the Audit Committee. (6) Mr Chen Liming, a Non-Independent Director of the Company, retired by rotation as Director pursuant to Article 91 of the Constitution of the Company, at the conclusion of the 21 st Annual General Meeting of the Company held on 22 April 2015 (the 21 st AGM ). He concurrently relinquished his office as a member of the Nominating Committee and the Remuneration Committee. (7) Ms Bella Young Pit Lai was appointed as a Non-Independent Director of the Company, whose appointment was effected immediately after the conclusion of the 21 st AGM. She was concurrently appointed as a member of the Nominating Committee and the Remuneration Committee. (8) Dr Zhao Shousen was unable to attend a Board Meeting, an Audit Committee Meeting and a Risk Management Committee Meeting due to a prior engagement.

86 84 China Aviation Oil (Singapore) Corporation Ltd Statement of Corporate Governance Quarterly Meetings of Board and Board Committees, Independent Directors Meeting and Annual General Meeting: Meetings of the Board and Board Committees, Independent Directors Meeting and the Annual General Meeting of the Company for each year are scheduled some time in the month of July in the preceding year to facilitate the Directors individual administrative arrangements in respect of any competing commitments. Director Familiarisation Programme: A formal letter is sent to newly appointed Non-Executive Directors upon their appointment explaining their duties and obligations as a Director as well as the governance policies and practices of the CAO Group. In addition, the formal letter of appointment sets out their expected time commitment and make clear that, by accepting the appointment, they are confirming that they are able to meet the expectations of their role. They are also required to disclose their other significant commitments to the Board prior to their appointment and to give notice of any subsequent changes. Comprehensive and tailored training is provided for all new Directors appointed to the Board as part of their orientation to ensure that they are familiar with (i) the Company s strategic objectives and the nature and scope of its operations; (ii) the Board s role and the governance structure and processes of the Company; (iii) Directors duties and responsibilities under statute and common law; (iv) applicable legal requirements and other regulatory requirements; (v) broad overview on the rules of SGX-ST Listing Manual; and (vi) the CAO Corporate Governance Policy. Facility visits to our associated companies premises are also arranged to enable newly appointed Directors to acquire an understanding of the CAO Group s business operations. During the year, a comprehensive familiarisation programme was arranged for Ms Bella Young Pit Lai, Mr Felipe Arbelaez and Mr Lin Wanli who joined the Board on 22 April 2015, 30 July 2015 and 11 August 2015 respectively. The purpose of the familiarisation programme was to familiarise them with the business activities, strategic direction, policies and corporate governance practices of CAO Group. Areas covered included 2020 Corporate Strategy of CAO, Oil Trading Business, Aviation Marketing Business, Risk Management, Overview of Financial Performance of the CAO Group, Directors Duties and Continuing Listing Obligations and Governance Structure of the CAO Group. This programme also provided an opportunity for the aforesaid Directors to get acquainted with senior management, and also fostered better rapport and communications with Management. Continuing Professional Development of Directors: In line with CAO s Policy on Director Orientation and Professional Development adopted by the Board since November 2012, continuing professional development programmes were organised for Directors to ensure that all Directors are updated on important market developments in the energy industry and issues which may have a significant impact on the businesses, financial and operational matters of the CAO Group. These programmes are conducted by external advisers, experts or senior management and these included (i) a Board Information Session relating to Oil Market Outlook conducted by Wood Mackenzie Limited; (ii) a Board Information Session relating to Update on Accounting Standards and Financial Reporting Trends conducted by KPMG Services Pte Ltd; and (iii) attendance at the Audit Committee Seminar-Preparing for 2015 organised by the Accounting and Corporate Regulatory Authority, SGX-ST and the Singapore Institute of Directors. Directors Disclosure of Interests: The Board has established the Board of Directors Conflict of Interest Policy (the Board Conflict of Interest Policy ) which is adjunct to the Company s overarching commitment to high levels of integrity and transparency. The Board Conflict of Interest Policy is designed to facilitate the identification of situations that present actual, perceived or potential conflicts of interest and the procedures to appropriately manage conflicts in accordance with legal requirements and the goals of accountability and transparency in the CAO Group s operations. All Directors are required to officially disclose their interests in the Company including any interested person transactions with the Company. Any Director who has an interest that may present a conflict between (a) his or her obligation with the Company and his or her personal business or other interests; and/or (b) the interests of the appointing major shareholder and the interests of the Company on which he or she serves, will either recuse himself or herself from participating in the deliberations and voting on the matter or declare his or her interest and abstain from decision-making. All Directors practise good governance by updating the Company about changes to their interests in a timely manner.

87 Annual Report Statement of Corporate Governance Board Composition and Balance Principle 2 There should be a strong and independent element on the Board, which is able to exercise objective judgment on corporate affairs independently, in particular, from Management and Substantial Shareholders. No individual or small group of individuals should be allowed to dominate the Board s decision making. Commentary Independent Element of the Board: The Nominating Committee assesses and determines the independence of a Director upon appointment and on an annual basis. The Nominating Committee takes into consideration CAO s Internal Policy Guidelines on Directors Test of Independence which set out the process for considering the independence of Directors of the Company (the Directors Test of Independence Policy ). The Directors Test of Independence Policy (i) specifies the materiality thresholds and independence criteria which the Nominating Committee will use to assess the independence of a Director; (ii) identifies the information that the Company will collect from Directors to enable the Nominating Committee to assess the independence of Directors; and (iii) outlines the basis of disclosure to shareholders of the assessment of the independence of Directors, including the disclosure of any relationships that may be perceived to affect the independence or objectivity of a Director. The Nominating Committee carried out the review on the independence of each non-executive Director in September 2015 by taking into consideration the Directors Test of Independence Policy and the information collected from each Director through the completion by each Director of a confirmation of independence checklist. The Director is required to declare any circumstances in which he or she may be considered non-independent. The Nominating Committee will then review the confirmation of independence checklist by applying the Directors Test of Independence Policy before affirming the independence of a Director. Composition of Independent Directors on the Board: Of the nine (9) members on the Board, six (6) are nominated by substantial shareholders and are deemed as non-independent. The three (3) Independent Directors namely, Dr Wang Kai Yuen, Mr Ang Swee Tian and Mr Li Runsheng constitute at least one-third of the Board. Currently, at least two (2) Independent Directors are resident in Singapore. These two (2) Independent Directors are Dr Wang Kai Yuen and Mr Ang Swee Tian. None of the nine (9) Board members are related to one another. As the Chairman of the Board is not an Independent Director, the Nominating Committee is reviewing the composition of the Independent Directors on the Board and working on increasing the independent element of the Board to comply with the requirements of the 2012 Code. In accordance with the CAO Corporate Governance Policy, the independence of any Director who has served on the Board beyond nine (9) years from the date of his first appointment shall be subject to rigorous review as such time-frame of service could or could reasonably be perceived to, materially interfere with the independent judgement by such Director or the ability of such Director to act in the best interests of the Company. As at the date of this report, none of the independent Directors of the Company have been appointed on the Board for more than nine (9) years.

88 86 China Aviation Oil (Singapore) Corporation Ltd Statement of Corporate Governance During the financial year, the following changes to the Board were made: (1) On 26 February 2015, a letter of nomination was received from BP in regard to the appointment of Ms Bella Young Pit Lai as a BP-nominee Director in place of Mr Chen Liming who had indicated that he would not seek re-election as Director at the 21 st AGM and that Ms Bella Young Pit Lai was to be concurrently appointed as a member of the Nominating Committee and the Remuneration Committee in place of Mr Chen Liming. Following which, the Nominating Committee conducted interviews with the then incumbent, Ms Bella Young Pit Lai to ascertain her suitability and updated the Board as appropriate on the selection process. A member of the Nominating Committee also conducted a telephone interview with Ms Bella Young Pit Lai who was based in Hong Kong. Thereafter, the Nominating Committee submitted pertinent details on Ms Bella Young Pit Lai including her curriculum vitae, the declaration of her independence etc., with a recommendation to the Board. The Board then appointed Ms Bella Young Pit Lai in April 2015 as a Director in accordance with the Constitution of the Company, Listing Rules of the SGX-ST, Shareholders Agreement and CAO Corporate Governance Policy and on the terms of appointment agreed with Ms Bella Young Pit Lai. (2) By its letter of 7 May 2015, BP nominated Mr Felipe Arbelaez as a BP-nominee Director in place of Mr Alan Haywood and that he was to be concurrently appointed as the Chairman of the Risk Management Committee and as a member of the Audit Committee in place of Mr Alan Haywood. Following which, the Nominating Committee met up with the then incumbent, Mr Felipe Arbelaez in Singapore to ascertain his suitability and updated the Board as appropriate on the selection process. Thereafter, the Nominating Committee submitted pertinent details on Mr Felipe Arbelaez including his curriculum vitae, the declaration of his independence etc., with a recommendation to the Board. The Board then appointed Mr Felipe Arbelaez on 30 July 2015 as a Director in accordance with the Constitution of the Company, Listing Rules of the SGX-ST, Shareholders Agreement and CAO Corporate Governance Policy and on the terms of appointment agreed with Mr Felipe Arbelaez. (3) By its letter of 3 August 2015, CNAF nominated Mr Lin Wanli as a CNAF-nominee Director and Chairman of the Board of CAO in place of Mr Sun Li who had relinquished his office as Chairman of CNAF and Party Secretary following his retirement. Following which, the Nominating Committee ascertained his suitability and updated the Board as appropriate on the selection process. Thereafter, the Nominating Committee submitted pertinent details on Mr Lin Wanli including his curriculum vitae, the declaration of his independence etc., with a recommendation to the Board. The Board then appointed Mr Lin Wanli on 11 August 2015 as Chairman of the Board in accordance with the Constitution of the Company, Listing Rules of the SGX-ST, Shareholders Agreement and CAO Corporate Governance Policy and on the terms of appointment agreed with Mr Lin Wanli. The composition of the Board is also reviewed annually by the Nominating Committee. The Nominating Committee is satisfied that the Board comprises Directors who as a group possess the necessary calibre, experience and core competencies for effective decision-making. Individual directors profiles can be found in Board of Directors section of the Annual Report. Chairman and Chief Executive Officer Principle 3 There should be a clear division of responsibilities between the leadership of the Board and the executives responsible for managing the company s business. No one individual should represent a considerable concentration of power.

89 Annual Report Statement of Corporate Governance Commentary Separate Role of Chairman and CEO: The Chairman, with the assistance of the Deputy Chairman, is primarily responsible for overseeing the overall management and strategic development of the Company. With the assistance of the Company Secretary, schedules Board meetings and ensures that all procedures and good governance practices are complied with. The CEO/ED, Mr Meng Fanqiu consults both with the Chairman and the Deputy Chairman for their views on the agenda for Board meetings. The Chairman, Mr Lin Wanli, not only has extensive experience in transportation fuels in the People s Republic of China (the PRC ) but has also accumulated extensive corporate management experience through senior leadership positions held at various stateowned enterprises in the PRC. Mr Lin Wanli is also familiar with the corporate governance practices and procedures of listed company boards in Singapore. The Deputy Chairman/Lead Independent Director of the Board, Dr Wang Kai Yuen has extensive experience as Director of publiclisted companies in Singapore. He has good working relationships with the various regulators in Singapore. The CEO/ED executes the Board s decisions and is responsible for the day-to-day running of the Company s business, making operational decisions for the Company and implementing the Company s business, direction, strategies and policies. The Chairman is in constant consultation with the Deputy Chairman/Lead Independent Director as well as other members of the Board and Board committees on major issues. As such, the Board believes there are adequate safeguards in place against having a concentration of power and authority in a single individual. The Chairman and the CEO/ED are not related to each other. The list of responsibilities of the Chairman and the CEO/ED is available for inspection at the Company s registered office. Regular Meetings of Independent Directors: In accordance with the CAO Corporate Governance Policy, the Independent Directors of CAO meet at least once a year to discuss any matters relevant to the CAO Group, such as its investment criteria, risk management and internal controls, risk appetite and risk tolerance, performance of management, Board communication and performance, and strategic issues. Led by the Deputy Chairman/Lead Independent Director, the Independent Directors of CAO held their meeting on 20 December Key issues discussed by the Independent Directors of CAO included Increasing the Independence Element of the Board of CAO to comply with the Code of Governance 2012 and Section 2.1.1(b) of the CAO Corporate Governance Policy, Terms of Reference of the Board Committees and CAO 2020 Strategy. Board Membership Principle 4 There should be a formal and transparent process for the appointment of new Directors to the Board.

90 88 China Aviation Oil (Singapore) Corporation Ltd Statement of Corporate Governance Commentary Composition of Nominating Committee and Terms of Reference: The Nominating Committee was established by the Board to make recommendations for all Board appointments. The Nominating Committee comprises five (5) members, the majority of whom, including its Chairman, are Independent Non-Executive Directors: Nominating Committee Li Runsheng Luo Qun Wang Kai Yuen Ang Swee Tian Bella Young Pit Lai Chairman Vice Chairman Member Member Member The Chairman of the Nominating Committee is not associated with any substantial shareholder of the Company. The responsibilities of the Nominating Committee include: a) evaluating and nominating suitable candidates or, as the case may be, re-nominate retiring Directors to the Board; b) determining each Board member s independence status on an annual basis and as and when circumstances require; c) evaluating the effectiveness of the Board as a whole and independently evaluate each Board member s performance and contribution to the Board; d) reviewing of the training and professional development programmes of the Board; and e) deciding if a Director is able to and has been adequately carrying out his duties as a Director, taking into consideration the Director s number of listed company board representations and other principal commitments. Board Nomination Process for the Selection and Appointment of New Independent Directors: The Nominating Committee will generally apply the Internal Guidelines for Selection and Appointment of Independent Directors of CAO (the Internal Guidelines ) for the process of identifying, evaluating and selecting suitable candidates for appointments as new Independent Directors of the Company. In considering the overall balance of the Board s composition, the Nominating Committee will give due consideration to the selection and evaluation criteria set out in the Internal Guidelines, having regard to the normally accepted nomination criteria which include but not limited to (i) the appropriate background, experience, industry knowledge or ability to acquire that knowledge, professional skills and qualifications; (ii) demonstrated, willingness to devote the required time, including being available to attend meetings of the Board and Board Committees; and (iii) high levels of personal and professional integrity as well as business ethics. In the case of selection and appointment of CNAF Nominee Directors and BP Nominee Directors, the Nominating Committee will not apply the Internal Guidelines. However, with regard to the nominations received from either CNAF or BP for the appointment and/or replacement of their respective nominee Directors, the Nominating Committee may apply the relevant evaluation criteria in the Internal Guidelines when assessing their suitability in complementing the core competencies of the Board at that time.

91 Annual Report Statement of Corporate Governance Directors Multiple Directorships in Listed Companies: In line with the Board adopted guiding principles for the determination of a specified maximum number of listed board representations. Directors of CAO should not, as a general guide, hold more than six (6) board representations in listed companies. In addition, the following considerations are also taken into account: (i) (ii) where the individual also holds a full-time executive position; and where the individual is a full-time independent director. The Nominating Committee had reviewed each Director s external directorships as well as the Director s attendance and contributions to the Board. Despite the multiple directorships of some Directors, the Nominating Committee is satisfied that the Directors spent adequate time on the Company s affairs and have carried out their responsibilities. Pursuant to Article 91 of the Constitution of the Company, one-third of the members of the Board of Directors shall retire by rotation at every annual general meeting of the Company ( AGM ) and these Directors may offer themselves for re-election, if eligible. For the 22 nd Annual General Meeting ( 22 nd AGM ) to be held on 20 April 2016, Dr Zhao Shousen and Mr Meng Fanqiu are due for retirement by rotation and would be eligible for re-election. The Nominating Committee has recommended and the Board agreed that Dr Zhao Shousen and Mr Meng Fanqiu, the Directors retiring by rotation under Article 91, be nominated for re-election at the 22 nd AGM. In accordance with Article 97 of the Constitution of the Company, Mr Lin Wanli, Ms Bella Young Pit Lai and Mr Felipe Arbelaez who were appointed as Directors of the Company on 11 August 2015, 22 April 2015 and 30 July 2015 respectively, will hold office as Directors until the next annual general meeting of the Company and will be eligible for re-election under Article 97 at the 22 nd AGM. Board Performance Principle 5 There should be a formal assessment of the effectiveness of the Board as a whole and its board committees and the contribution by each Director to the effectiveness of the Board. Commentary Board Performance: The Nominating Committee evaluated the performance of each Director and the effectiveness of the Board as a whole. Since the adoption of the CAO Corporate Governance Policy in 2012, the Board has, through the Nominating Committee, implemented a formal process annually for assessing the effectiveness of the Board as a whole and its Board Committees (the Overall Board/Board Committees Performance Evaluation ). The Overall Board/Board Committees Performance Evaluation entailed the completion by each member of the Nominating Committee of a Board assessment and effectiveness questionnaire (the Board Evaluation Questionnaire ). The elements of the Board Evaluation Questionnaire included questions on (i) the Board s composition; (ii) Board s access to information prior to Board meetings and on an ongoing basis to enable them to properly discharge their duties and responsibilities as Directors; (iii) the expertise and experience of each member of the Board; (iv) the conduct of proceedings of meetings; (v) participation and contributions to the Board both inside and outside of Board meetings; (vi) the assessment of the performance benchmark for assessing the performance of the Board as a whole and in ensuring the continued return for shareholders; and (vii) the standard of conduct in preventing conflicts of interest and the disclosure of personal interests and abstention from voting where appropriate.

92 90 China Aviation Oil (Singapore) Corporation Ltd Statement of Corporate Governance A summary of the assessment ratings on each of the elements of the Board Evaluation Questionnaire by each member of the Nominating Committee for last three (3) preceding years were also sent to the members of the Nominating Committee. Each member of the Nominating Committee would first carry out his own assessment and evaluation of the performance of the Board as a whole and its Board Committees using the Board Evaluation Questionnaire. To further enhance the long-term performance of the Board and its Board Committees, a separate process for the review of the performance of individual (non-executive) directors was also adopted (the Individual Board Member Performance Evaluation ) and conducted on an annual basis concurrently with the Overall Board/Board Committees Performance Evaluation. The Individual Board Member Performance Evaluation was conducted using the 360-Degree Board Member Evaluation Form. The 360-Degree Board Member Evaluation Form was designed to facilitate the assessment of each individual (non-executive) Board member in areas such as Leadership, Strategic Thinking, Board Contribution and Governance. The 360-Degree Board Member Evaluation Form was ed to Directors individually by separate s and each Board member was required to complete the 360-Degree Board Member Evaluation Form for each of the other non-executive Directors, on an anonymous basis. A general summary of (i) the assessment ratings on each of the elements of the Board Evaluation Questionnaire by each member of the Nominating Committee; and (ii) the results of assessment and evaluation of the 360-Degree Board Member Evaluation Form for each non-executive Director of CAO, will be collated by the Company Secretary for the Nominating Committee s deliberation and consensus at its Nominating Committee Meeting held in November each year. The Nominating Committee is satisfied with the current composition and performance of the Board both individually and as a whole. Access to Information Principle 6 In order to fulfil their responsibilities, Directors shall be provided with complete, adequate and timely information prior to Board meetings and on an on-going basis so as to enable them to make informed decisions to discharge their duties and responsibilities. Commentary Information Flow: The Company has put in place enhanced communication processes between the Board and Management in terms of information flow. Agenda for meetings and all Board papers for discussions are circulated to Directors at least ten (10) calendar days in advance so that the Directors are prepared for the meetings. However, sensitive matters may be tabled at the meeting itself or discussed without any papers being distributed. Management and senior executives of the Company would be present during the Board meeting or Board Committee meeting, as the case may be, to present their proposals or to answer any questions that Board members may have. The Board as a whole as well as individual Directors have direct access to Management represented by senior executive officers of the Company and CAO Group. The Management provides the Directors with monthly updates on the operational and financial performance of the CAO Group, and also responds to regular questions from the Board or individual Directors in a timely manner. Where the Board deems it necessary, the Board can obtain independent advice from external consultants. This enhances the Board s ability to discharge its functions and duties.

93 Annual Report Statement of Corporate Governance All Board members have direct access to and the advice and services of the Company Secretary. The Company Secretary attends all Board and Board Committee meetings and assists the respective Chairman of the Board/Board Committees in ensuring that Board/ Board Committee papers, procedures and the applicable laws and regulations are adhered to. Information about the Company and the CAO Group are freely available to each Board member. Management will promptly supply any additional information that the Board requires. The Board also has ready access to external professionals for consultations. (B) REMUNERATION MATTERS Procedures for Developing Remuneration Policies Principle 7 There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors. No Director should be involved in deciding his own remuneration. Level and Mix of Remuneration Principle 8 The level and structure of remuneration should be aligned with the long-term interest and risk policies of the company, and should be appropriate to attract, retain and motivate (a) the Directors to provide good stewardship of the company; and (b) key management personnel to successfully manage the company. However, companies should avoid paying more than is necessary for this purpose. Disclosure on Remuneration Principle 9 Each company should provide clear disclosure of its remuneration policies, level and mix of remuneration, and the procedure for setting remuneration, in the company s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key management personnel, and performance. Commentary Remuneration Committee: The Board adopted the recommendations of the 2012 Code and established a Remuneration Committee to consider and to make recommendations on remuneration matters for the Directors and senior executives of the CAO Group. Apart from ensuring consistencies with good practices, the Remuneration Committee is also mindful of the need to ensure that the Company and the CAO Group are able to attract and retain good Directors and senior executives to the business.

94 92 China Aviation Oil (Singapore) Corporation Ltd Statement of Corporate Governance The Remuneration Committee comprises five (5) members, the majority of whom, including its Chairman, are Independent Non- Executive Directors: Remuneration Committee Wang Kai Yuen Luo Qun Li Runsheng Ang Swee Tian Bella Young Pit Lai Chairman Vice Chairman Member Member Member The Remuneration Committee assists the Board and Management by assessing and making remuneration recommendations for the CEO/ED and senior executives of the Company. In the discharge of its responsibilities, the Remuneration Committee has sought expert advice from external international human resource consultancy firms. Broadly, remuneration for the CEO/ED and top six (6) senior executives for the financial year ended 31 December 2015 is based on the Company s and individual performances and the remuneration for Non-Executive Directors in the form of fees is based on responsibilities and memberships in the Board and its committees. Non-executive Directors are paid Directors fees, subject to the approval of shareholders at the AGM. The structure for the payment of Directors fees for Non-Executive Directors is based on a framework comprising base fee and additional fees for serving on the Board Committees and also undertaking additional services for the CAO Group. Fees paid or payable to Non-Executive Directors take into account factors such as effort and time spent, and responsibilities of these Directors. The CEO/ED does not receive Directors fees for his Board directorships with the Company and the CAO Group. Details on the existing Directors fee structure are set out below: a. each director will receive a base fee ( Base Fee ). b. the Chairman of the Board will receive twice the amount of the Base Fee. ( Board Chairman s Fee ). c. the Deputy Chairman will receive 75% of the Board Chairman s Fee. d. the Chairman of the Audit Committee ( AC ) will receive additionally two-thirds of the Base Fee ( AC Chairman s Fee ). e. the Chairman of the Risk Management Committee ( RMC ) will receive additionally two-thirds of the Base Fee ( RMC Chairman s Fee ). f. Chairman of the Remuneration Committee ( RC ) and the Chairman of the Nominating Committee ( NC ) will each receive additionally one-third of the Base Fee. g. members of AC, RC, NC and RMC will each receive 50% of the respective AC Chairman s Fee, RC Chairman s Fee, NC Chairman s Fee and RMC Chairman s Fee. h. Executive Directors will not be entitled to receive fees. i. the Lead Independent Director will receive additionally a sum equivalent to the Base Fee.

95 Annual Report Statement of Corporate Governance Directors fees payable to non-executive Directors nominated by CNAF and BP will be paid to CNAF and BP or their nominated companies respectively. The remuneration of Directors payable for the financial year ended 31 December 2015 are set out below: Name of Director Fee Base/Fixed Salary and Allowance Variable/ Performance Bonus Others Long-Term Incentives Total S$ S$ S$ S$ S$ S$ Meng Fanqiu (1) (CEO/ ED) 0 484, ,938 Lin Wanli (2) (Chairman) 31, ,585 Sun Li (3) 49, ,256 Wang Kai Yuen (Deputy Chairman/Lead ID) 134, ,368 Ang Swee Tian 94, ,058 Alan Haywood (4) 46, ,605 Chen Liming (5) 16, ,493 Felipe Arbelaez (6) 34, ,236 Li Runsheng 73, ,903 Luo Qun 53, ,748 Bella Young Pit Lai (7) 37, ,403 Zhao Shousen 67, ,184 (1) The total remuneration of Mr Meng Fanqiu shown above does not include the 2015 variable bonus payable for the financial year The quantum of the said 2015 variable bonus is being considered by the Remuneration Committee and will be decided in the financial year ending 31 December (2) Mr Lin Wanli was appointed as Chairman/Non-Independent Director in place of Mr Sun Li on 11 August (3) Mr Sun Li resigned as Chairman/Non-Independent Director on 11 August 2015 following his retirement as Chairman and Party Secretary of CNAF. (4) Mr Alan Haywood resigned as a Non-Executive Director on 30 July He concurrently relinquished his office as Chairman of the Risk Management Committee and a member of the Audit Committee. (5) Mr Chen Liming retired as a Non-Independent Director at the conclusion of the 21 st AGM. He concurrently relinquished his office as a member of the Nominating Committee and the Remuneration Committee. (6) Mr Felipe Arbelaez was appointed as a Non-Independent Director on 30 July 2015 in place of Mr Alan Haywood. Mr Felipe Arbelaez was concurrently appointed as Chairman of the Risk Management Committee and as a member of the Audit Committee. (7) Ms Bella Young Pit Lai was appointed as a Non-Independent Director of the Company, effected immediately after the conclusion of the 21 st AGM. Ms Bella Young Pit Lai was concurrently appointed as a member of the Nominating Committee and the Remuneration Committee.

96 94 China Aviation Oil (Singapore) Corporation Ltd Statement of Corporate Governance The remuneration of six (6) key executives (who are not also Directors) for the financial year ended 31 December 2015 are set out below: Remuneration Band S$250,000 to S$500,000 Name of Executive Total remuneration of top six (6) key executives (1) Base/ Fixed Salary (%) Variable Bonus (%) Allowances & Other Benefits (%) Long-Term Incentives (%) Total (%) Jean Teo Elizza Ding Owen Wong Wang Chunyan Tee Siew Kim Doreen Nah S$1,924,818 (100%) 0 (%) 0 (%) 0 (%) S$1,924,818 (100%) (1) The total remuneration disclosed above for the six (6) key executives exclude the 2015 variable bonuses payable for the financial year The quantum of the said 2015 variable bonuses are being considered by the Remuneration Committee and will be decided in the financial year ending 31 December There are no employees in the CAO Group who are immediate family members of the Chairman or any of the Directors during the financial year ended 31 December immediate family member means the spouse, child, adopted child, step child, brother, sister and parent. The remuneration of the CAO Group s top six (6) key executives takes into consideration the pay and employment conditions within the same industry and is performance related. The remuneration package of Directors and senior executive officers include the following: Basic/Fixed Salary - The basic salary (inclusive of statutory employer contributions to Central Provident Fund and Annual Wage Supplement) for each Executive Director or key management personnel is approved by the Remuneration Committee, taking into account the performance of the individual for the financial year 2015, the inflation price index and information from independent sources on the pay scale for similar jobs in a selected group of comparable organisations. Variable/Performance - The CAO Group operates a bonus scheme for all employees including the CEO/ED. The criteria for the bonus scheme are the level of profit achieved from certain aspects of the CAO Group s business activities against targets, together with an assessment of the Company s and individual s performance during the year. Others - Benefits in kind such as private medical cover and car are made available where appropriate and consistent with common industry practices.

97 Annual Report Statement of Corporate Governance (C) ACCOUNTABILITY AND AUDIT Accountability Principle 10 The Board should present a balanced and understandable assessment of the company s performance, position and prospects. Commentary During the financial year 2015, the Board, through the Audit Committee and the CAO Group s external auditors KPMG LLP ( KPMG ) and internal auditors, BDO LLP ( BDO ), scrutinised Management s conduct of the Company s and CAO Group s business processes and financials. Each area of the Company and CAO Group was audited on an ongoing basis to ensure that the Company and CAO Group maintain good corporate practices and governance and financial integrity. The Board, with the assistance of the Audit Committee, reviewed all financial statements of the Company and the CAO Group. The Board is accountable to shareholders and always aims to present a balanced and understandable assessment of the Company s and CAO Group s financial position and prospects to shareholders on a timely basis. The quarterly, half-year and full-year results were announced or issued within the mandatory period. Management provided the Board members with management accounts on a monthly basis. Such reports keep the Board informed, on a balanced and understandable basis, of the CAO Group s performance, financial position and prospects and consist of the consolidated profit and loss accounts, analysis of sales, operating profit, pre-tax and attributable profit by business segments compared against the budgets, together with explanation given for significant variances for the month and year-to-date. Risk Management and Internal Controls Principle 11 The Board is responsible for the governance of risk. The Board should ensure that Management maintains a sound system of risk management and internal controls to safeguard shareholders interests and the company s assets, and should determine the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives. Commentary The Board recognises the importance of sound internal control and risk management practices. In this regard, the Board affirms that it is responsible for the CAO Group s systems of internal control and risk management system and had established the Risk Management Committee. The Risk Management Committee comprises three (3) members, all of whom are Non-Executive Directors: Risk Management Committee Felipe Arbelaez Zhao Shousen Ang Swee Tian Chairman Member Member

98 96 China Aviation Oil (Singapore) Corporation Ltd Statement of Corporate Governance The Risk Management Committee is responsible for, among others: (i) (ii) (iii) setting the limits for various types of risks, such as market, credit, operational, compliance and reputation risks; approving new activities that the CAO Group plan to embark on; and overseeing the risk management practices of the CAO Group. The Risk Management Department of the Company ensures that the risk management activities have been executed daily. The Risk Management Department is responsible for, among others: (i) (ii) ensuring that risk management activities have been executed daily; and all risk-related policies, processes and limits are implemented and adhered to. The Head of Risk Management, a BP-secondee, reports directly to the Risk Management Committee. The Risk Management Committee had delegated the day-to-day management of the risks of the Company and the CAO Group to the Company Risk Meeting, which operates within the delegated authority set by the Risk Management Committee from time to time. The Company Risk Meeting comprises the Head of Risk Management, senior management and relevant functional heads (i.e. from Trading, Operations, Finance and Legal), and meets once a month as well as on an ad hoc basis when required. The Chairman of the Company Risk Meeting, who is the Head of Risk Management, directly reports to the CEO/ED but also has an independent direct reporting line to the Risk Management Committee. The Risk Management Report is found on pages 64 to 71. The Audit and Internal Control Department of the Company and its key responsibilities included inter alia: (i) (ii) (iii) (iv) (v) (vi) liaising and coordinating with internal auditors, BDO, on the preparation of internal audit schedule including short-term and long-term audit plans; integrating and establishing the CAO Group s internal control framework, policies, processes and systems across the Company, its subsidiaries and associates; facilitating and assisting functional heads in formulating policies, operational processes and systems thereby ensuring that the policies, processes and systems are efficiently implemented; oversee the execution and implementation of the CAO Group s Business Continuity Plan; establishment and conduct of on-going reviews of the templates for standard operating procedures to ensure proper departmental ownership of their processes and changes; and evaluating the system of internal controls for new projects and business activities, and analysing the impact of such activities on the CAO Group and where necessary, provide recommendations and develop programmes for improvements. The Head of the Audit and Internal Control reports directly to the CEO/ED. The Head of the Audit and Internal Control may also report directly to the Audit Committee for important matters or concerns relating to the system of internal controls of the CAO Group. With the assistance of the Audit Committee and the Risk Management Committee, the Board reviews the adequacy and integrity of those control systems from time to time. In addition to the Risk Management Manual, the Board has also developed the Financial Management Manual. These two (2) manuals are strict guidelines which the Management and all staff of the Company and the CAO Group must comply with. Corporate Policy on Anti-Money Laundering Measures, including the appointment of an Anti-Money Laundering Compliance Officer, together with other trading related policies such as Out-of-Office Dealing Policy, Telephone Taping/Instant Messaging/Mobile Phone Policy, Deal Entry Policy, CAO Group Trade Sanctions Policy and CAO Group Corporate Guarantee Policy had been endorsed by the Risk Management Committee and relevant departments had also been mandated with the responsibility to oversee the adoption of the aforesaid policies in their practices, processes and operations.

99 Annual Report Statement of Corporate Governance As discussed under Principle 13, the internal audit function of the CAO Group which is outsourced to BDO, assists the Audit Committee and the Board in evaluating the internal control systems and processes, financial and accounting matters, compliance and business and financial risk management. The Audit Committee s responsibilities in the CAO Group s internal controls are complemented by the work of the outsourced internal auditors, BDO, the Audit and Internal Control department, the Risk Management department and the Legal department. Based on the audit reports, internal control systems review report and management controls in place, the Audit Committee is satisfied that the internal control systems provide reasonable assurance that assets are safeguarded, that proper accounting records are maintained and financial statements are reliable. In the course of their statutory audits, the Company s external auditors KPMG will highlight any audit findings which have come to their attention in carrying out their normal audit, which is designed primarily to enable them to express their opinion on the financial statements. In addition, BDO which had been engaged to conduct a review of the internal control systems and processes of the CAO Group will highlight any internal control weaknesses which have come to their attention in the course of their review. Any such audit findings noted during the audit by external auditors or internal control weaknesses noted during the review by BDO, and recommendations in relation thereto, if any, by the external auditors and BDO respectively, are reported to the Audit Committee. The CEO/ED and the Chief Financial Officer ( CFO ) at the financial year-end have provided a written assurance to the Board that: (i) (ii) the financial records have been properly maintained and the financial statements give a true and fair view of the CAO Group s operations and finances; and the effectiveness of the CAO Group risk management and internal control systems. Based on the internal controls established and maintained by the CAO Group, work performed by the internal and external auditors, and reviews performed by management and various Board Committees, the Board, with the concurrence of the Audit Committee, is of the opinion that the CAO Group s system of internal controls addressing financial, operational, compliance, information technology controls and risk management systems, were adequate as at 31 Dec 2015 to provide reasonable assurance for achieving the following objectives: (i) (ii) (iii) effectiveness and efficiency of operations; reliability of financial reporting; and compliance with applicable laws and regulations. The Board notes that the system of internal controls provides reasonable, but not absolute, assurance that the CAO Group will not be affected by any event that could be reasonably foreseen as it strives to achieve its business objectives and goals. In this regard, the Board also notes that no system can provide absolute assurance against the occurrence of material errors, poor judgement in decision-making, human error, fraud or other irregularities. Audit Committee Principle 12 The Board should establish an Audit Committee with written terms of reference which clearly set out its authority and duties.

100 98 China Aviation Oil (Singapore) Corporation Ltd Statement of Corporate Governance Commentary Composition of the Audit Committee: The Audit Committee comprises five (5) members, all of whom are Non-Executive Directors and the majority, including its Chairman, are Independent Directors: Audit Committee Ang Swee Tian Zhao Shousen Wang Kai Yuen Felipe Arbelaez Li Runsheng Chairman Vice Chairman Member Member Member Roles of the Audit Committee: The Audit Committee held four (4) meetings in 2015 where it met with external and internal auditors to review both the Company and CAO Group s financials and audit reports. A key issue for discussion is the financial statements and announcements made by the Company to shareholders. The members of the Audit Committee, collectively, have expertise or experience in financial management and are qualified to discharge the Audit Committee s responsibilities. The Audit Committee met with both the external and internal auditors at least once without the presence of the Management. The Audit Committee reviews the quarterly and annual financial statements and the integrity of financial reporting of the Company, including the accounting principles, for recommendation to the Board for approval. The Audit Committee also reviews and approves the internal auditors and external auditor s plans to ensure that the plans adequately cover, in particular, significant internal controls of the Company relating to financial, operational and compliance-related matters. Significant issues are discussed at Audit Committee meetings. The Audit Committee has full authority to investigate into any matter within its terms of reference, including any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations. The Audit Committee has full access to and co-operation of the Management. The Audit Committee also has full discretion to invite any Director or executive officer from the Company or the CAO Group to attend its meetings. The Audit Committee has full access to both external and internal auditors. Where required, the Audit Committee is empowered to obtain external legal advice or such other independent professional advice as the Committee deems necessary. The Audit Committee monitors all interested person transactions, including transactions under the general mandate on interested person transactions approved by shareholders at the 21 st AGM held on 22 April 2015, and conflict of interest situations including transactions, procedures or actions taken which may raise issues about the Management s integrity. The Audit Committee also evaluates the scope and results of internal audit reports as well as Management s responses to the findings of the internal audit reports. For further discussions about internal audit, please see section (D) INTERNAL CONTROLS. The Audit Committee nominated KPMG for re-appointment as auditors of the Company at the 21 st AGM. The Audit Committee has also conducted an annual review of non-audit services and is satisfied that the nature and extent of such services provided by KPMG will not prejudice their independence and objectivity before confirming their re-nomination. In line with the CAO External Audit Policy adopted by the Board in December 2015 and as part of the Company s good corporate governance initiatives, the Audit Committee recommends a rotation of external auditors after the external auditors have been retained for five (5) consecutive full-year audits, to enable the Company to (a) benefit from fresh perspectives and views of another professional audit firm; and (b) enhance value of the audit.

101 Annual Report Statement of Corporate Governance Under the CAO External Audit Policy, the Audit Committee manages the selection process for the appointment of external auditors in consultation with the Board, based on their assessment of the responses and proposals from prospective external auditors. In making its selection, the Audit Committee confers with senior executives of the Company on the responses received. In accordance with CAO External Audit Policy, three (3) other Big-Four audit firms were approached to submit a request for proposal for services relating to external audit of financial statements of CAO for the financial years from 2016 to 2020 (the RFP ). In assessing the RFP, the Audit Committee took into consideration a number of key criteria, including the audit firm s recognition and respect internationally, audit approach and methodology, internal governance processes, global resources, key personnel and costs. KPMG had indicated that they would not be seeking re-appointment as the auditors of CAO for the financial year 2016 at the 22 nd AGM. Following recommendations by the Audit Committee, the Board proposed to appoint Deloitte & Touche LLP as the new auditors of the Company in place of KPMG for the financial years from 2016 to The Company has put in place a suitable whistle blowing policy and procedure, by which staff of the CAO group as well as other persons such as suppliers of the CAO group ( Stakeholders ) may, in confidence, raise genuine concerns about possible improprieties regarding financial reporting or other matters (the CAO Whistle-Blowing Policy ). The CAO Whistle Blowing Policy provides for an anonymous channel to Stakeholders to raise any such concerns to the Company without fear of reprisal. Any such concerns raised will be investigated at the discretion of the Investigating Committee set up under the CAO Whistle-Blowing Policy. The CAO Whistle Blowing Policy to provide for periodic reviews by either the internal auditors of CAO or an independent external party (as the Audit Committee may so decide) on the effectiveness of existing reporting mechanisms and the handling procedures pertaining to the whistle blowing arrangements. In this regard, a summary of the CAO Whistle Blowing Policy can be accessed from the Company s external website and a dedicated address [email protected] for persons to report concerns pertaining to any form of misconduct affecting the CAO Group, its customers, partners, suppliers and other stakeholders, had been disclosed in its website. Once an has been received at the address set out above, an investigating committee will be responsible for investigating the concern raised. Further, CAO had also put in place a Fraud Control Plan and an Enterprise Risk Management Framework and Process. The Fraud Control Plan comprises periodic fraud risk assessments on the Company which is subject to review from time to time. The Enterprise Risk Management Framework and Process ensures that the Company has a structured approach and framework to regularly assess its enterprise-wide risks. Enterprise Risk Assessments are conducted on a regular basis to identify and deliver an inventory of key risks for the Company and to develop a list of key risk indicators that can help the Company monitor and mitigate its key risks. In addition, other existing policies, internal guidelines and/or processes and procedures have been put in place by the Company and these include the Strategy and Investment Governance Standards & Strategy and Investment Governance Committee, IT Policy & Practice, Jet Fuel Marketing Policy and Safety, Health and Environment Policy. The Company has put in place an employee handbook which includes a code of business conduct and ethics for employees. Internal Audit Principle 13 The company should establish an effective internal audit function that is adequately resourced and independent of the activities it audits.

102 100 China Aviation Oil (Singapore) Corporation Ltd Statement of Corporate Governance Commentary Both the Board and the Audit Committee agree that it is important to have a strong professional internal audit function to enhance their ability to manage risk and safeguard shareholders interest. It has been determined that the best approach is to engage independent professional auditors to discharge this function and such, BDO has been retained as the internal auditors of the CAO Group. During the financial year, BDO reviewed the Company s processes and procedures on a continual basis to ensure compliance with the best corporate governance practices. It also reviewed interested person transactions on a quarterly basis. The Audit Committee is satisfied that BDO had adequate resources to perform its functions and had appropriate standing within the Company. BDO had presented their internal audit plan 2016 to the Audit Committee. The Audit Committee adopted the audit plan for As the internal auditors of the CAO Group, BDO had conducted its internal audits in accordance with BDO s global internal audit methodology which is aligned with the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors. (E) COMMUNICATION WITH SHAREHOLDERS Principle 14 Companies should treat all shareholders fairly and equitably, and should recognise, protect and facilitate the exercise of shareholders rights, and continually review and update such governance arrangements. Commentary The Board is careful to observe regulations of the SGX-ST governing the requirements to make appropriate announcements on a timely basis. Transparency and integrity of information is also important to the Board. All material announcements are vetted by the CEO/ED, in consultation with the Chairman and/or the Deputy Chairman, as may be required, before release by the Company via SGXnet. Principle 15 Companies should actively engage their shareholders and put in place an investor relations policy to promote regular, effective and fair communication with shareholders. Commentary Investor Relations and Shareholder Communication The CAO Group is committed to providing regular, effective and fair communication with its shareholders and the investment community. During the year 2015 and in line with the CAO Investor Relations Policy, the Company, through the Investor Relations team, the CEO/ ED, CFO, Chief Operating Officer and other senior management members, maintained active working relationships with domestic and international brokerage firms, investment banks and the media, regardless of their views or recommendations on the CAO Group.

103 Annual Report Statement of Corporate Governance In order to: (i) cultivate wider investing public s familiarity with the CAO Group; (ii) increase global awareness and appreciation of CAO s business strategy, corporate developments, growth strategies and financial performance; and (iii) enhance the quantity and quality of analysts research, CAO expanded its channels of communication with the international investment and financial community. Increased interactions were conducted through international non-deal roadshows in Singapore, Malaysia and Hong Kong, face-to-face meetings, teleconferences, earnings briefings and corporate access events which were webcast globally across international financial markets. International media interviews were conducted to broaden global reach even as CAO participated in various retail investors seminars and frequent interactions with retail investor bodies. The Company reviews an analyst s report for factual accuracy of information that is within the public domain but does not provide focused guidance for analysts earnings estimates, and will not comment on their conclusions, earnings estimates, or investment recommendations. As a matter of internal policy, the Company will not deny an analyst or investor access to information on the basis of a negative recommendation or a decision no longer to hold the Company's securities. The Company shall not attempt to influence an analyst to change his or her recommendations by exerting pressure through other business relationships. The Investor Relations Department will publish and maintain a list on the Company website showing names of analysts and firms providing coverage. Channels of communication with retail investors were made through correspondence and telephone calls as well as participation in investor conferences. During the year, the Company also participated in several corporate profile seminars for both retail and institutional investors, including an investor education seminar organised by the Singapore Exchange. As part of CAO s efforts to reach out to its shareholders as well as the investment community, CAO s Corporate Access Day 2015 was held on 26 September 2015 to an audience of about 150 persons on the topic The Global Stratosphere of Aviation Marketing, presented by CAO s Chief Operating Officer. Comprising analysts, media and members from the investment community, additional media interviews were held prior to the event which resulted in CAO being covered by all mainstream Singapore media which helped generate further interest and following in CAO. The event was also webcast internationally to overseas financial markets through CAO s corporate website CAO aims to hold its Corporate Access Day annually to provide CAO s shareholders and the investment community a deeper insight into key facets of CAO s Businesses and Corporate Strategy as well as an update on CAO s roadmap as it envisions to becoming a global transportation fuels provider. The Company also engages the media and investment community through news releases and half yearly media/analysts briefings after each announcement of the CAO Group s financial results. To assist members of the Board to gain a current understanding of the views of institutional shareholders, the Board receives at each its scheduled quarterly meetings, (i) an investor relations and corporate communications report which cover a wide range of matters including a commentary on the perception of the Company and views expressed by the investment community, media reports, share price performance and analysis, share ownership analysis, highlights of recent investor relation activities; and (ii) a peer companies analysis report which provides a detailed analysis and evaluation on the benchmarking exercise with identified peer companies to provide the Board with a better understanding of CAO s position within the industry as well as identify gaps and learning points. In addition, the Board adopted the Internal Guidelines on Issuance of Profit Guidance or Profit Warning Announcements which purpose is to allow market expectations to adjust to the likelihood that the Company will either not be living up to an earlier profit guidance or to market expectations, and/or to avoid an earnings shock, negative impact on the share price, sell-off of the Company s shares and/or volatility of trading in the Company s shares, when the financial results are announced. In the spirit of good corporate governance and transparency, a profit guidance was issued in January 2015 with regards to the weaker financial performance of the CAO Group for 4Q2014 and FY2014 mainly attributable to the highly volatile global oil market and difficult oil trading environment even though the CAO Group remained profitable. The CAO Group also highlighted the weaker operating environment through its quarterly earnings release and financial results announcements during the year.

104 102 China Aviation Oil (Singapore) Corporation Ltd Statement of Corporate Governance Conduct of Shareholder Meetings Principle 16 Companies should encourage greater shareholder participation at general meetings of shareholders and allow shareholders the opportunity to communicate their views on various matters affecting the company Commentary The Company s Constitution allows a shareholder to appoint up to two (2) proxies to attend and vote in his/her place at general meetings. Although the Company does not have a specific limit in the Constitution on the number of proxy votes for nominee companies, there is a limit for the number of proxies. Notwithstanding this, the Company allows shareholders who hold shares through nominee companies to attend the AGM as observers without being constrained by the two-proxy rule. At each AGM, shareholders are encouraged to participate in the question and answer session. The Board of Directors, senior management, the external auditors and the Company Secretary are present to respond to shareholders questions. Where there are items of special business to be transacted at the AGM, comprehensive explanatory notes will be sent together with the notice of the AGM. Each issue or matter requiring the approval of shareholders of the Company is submitted as a single item resolution. To ensure transparency, the Company conducts electronic poll voting for shareholders/proxies present at the meeting for all the resolutions proposed at the general meeting. Votes cast for or against and the respective percentages on each resolution will be tallied and displayed live on screen immediately at the general meeting. The total number of votes cast for or against the resolutions and the respective percentages are also announced after the general meeting via SGXnet. The Company Secretary prepares minutes of shareholders meetings, which incorporates substantial comments or queries from shareholders and responses from the Board and Management. These minutes can be accessed from the Company s external website. Shareholders also have the opportunity to communicate their views and discuss with the Board and Management matters affecting the Company after the general meetings. Dividend Policy The Board has approved and adopted a revised dividend policy (the Revised CAO Dividend Policy ) which sets out the guiding principles for dividend distribution by the Company (the Guiding Principles ). The Guiding Principles included inter alia, maintaining a consistent baseline dividend payout ratio which constitutes 30 percent of the Company s annual consolidated net profits attributable to shareholders for each financial year commencing from the financial year In approving or reviewing a dividend policy or making its recommendations on the timing, amount and form of any future dividends, the Board takes into consideration, among others: (a) (b) (c) the expected future capital requirements and growth opportunities available to the CAO Group; net earnings of the CAO Group; and any regulatory approvals and/or where applicable, approvals required from third parties (e.g. banks and other financial institutions) as appropriate.

105 Annual Report Statement of Corporate Governance A summary of the Revised CAO Dividend Policy can be accessed from the Company s external website. DEALINGS IN THE COMPANY S SECURITIES In line with the recommended best practices on dealings in securities set out under Rule 1207(19) of the SGX-ST Listing Manual, the Company has issued a directive to all employees and directors not to deal in the Company s securities on short-term considerations and to abstain from dealing with the Company s securities for a period commencing two (2) weeks before the announcement of the results of the first three quarters and one (1) month before the announcement of the full year results and ending on the date of the announcement of the relevant results. INTERESTED PERSON TRANSACTIONS Shareholders have approved the renewal of the general mandate for interested person transactions of the CAO Group on 22 April 2015 ( IPT Mandate ). The IPT Mandate sets out the levels and procedures to obtain approval for such transactions. Information regarding the IPT Mandate is available on the Company s website at All business units are required to be familiar with the IPT Mandate and report any such transactions to the Finance Department. The Finance Department keeps a register of the CAO Group s interested person transactions. Information on interested person transactions for 2015 is found under Supplementary Information on page 168. REVIEW OF SYSTEM OF INTERNAL CONTROLS As part of the Company s ongoing process of ensuring effectiveness of its system of internal controls, the established system of internal controls of the Company be subject to biennial review by an independent external reviewer with appropriate experience in corporate governance and risk management processes. With the assistance of BDO, the Company conducted a review of the Company s system of internal controls ( Review of System of Internal Controls ). Based on the findings from the Review of System of Internal Controls, the Company was generally in conformity with Committee of Sponsoring Organizations of the Treadway Commission ( COSO ) Internal Controls Integrated Framework. Risks identified (none of which were rated as high risk) are highlighted in the Risk Assessment section in its report. No other exceptions were noted with respect to internal controls and counter-measures reviewed in the scope of the engagement. However, BDO had recommended several areas of improvement so as to fully conform to the requirements under the COSO internal controls framework. Accordingly, Management had carefully considered these recommendations from BDO and had taken the necessary actions to implement the same as appropriate.

106 104 China Aviation Oil (Singapore) Corporation Ltd Statement of Corporate Governance APPENDIX (1) Charter of Lead Independent Director The Company shall have a Lead Independent Director who shall be an independent director as defined under the 2012 Code. Purpose In circumstances where the Chairman of the Board of Directors is not independent, the Board of Directors of the Company considers it to be useful and appropriate to designate a Lead Independent Director to coordinate the activities of the Independent Directors of the Company and performing such other duties and responsibilities as the Board may determine from time to time. Duties and Responsibilities In addition to the duties of Board members as set forth in the 2012 Code, the specific duties and responsibilities of the Lead Independent Director shall be as follows: Function as Principal Liaison with the Chairman and Senior Management Act as the principal liaison between the Independent Directors of the Company and the Chairman of the Board, and between the Independent Directors of the Company and senior management. Call Meetings of Independent Directors Has the authority to convene meetings, as appropriate, among the Independent Directors of the Company and to ensure that Independent Directors have adequate opportunities to meet and discuss issues in sessions of the Independent Directors without the presence or participation of management. Preside at Meetings Preside at any meetings held among the Independent Directors of the Company. Approve Appropriate Provision of Information to the Board and the Board Committees Review the quality, quantity and timeliness of the information submitted to the Board and Board Committees. Advise and assist the Chairman on the meeting agenda items Advise the Chairman and facilitate Board s approval of the number and frequency of meetings of the Board and Board Committees (including any special meetings of the Board) as well as meeting schedules to ensure that there is sufficient time for discussion of all agenda items Initiate Actions to Address any Concerns on Corporate Compliance Matters Has authority to initiate actions, for and on behalf of the Independent Directors of the Company, to address any concerns on corporate compliance matters including the engaging of external advisers and consultants, even at the displeasure of the Management or majority shareholders of the Company.

107 Annual Report Statement of Corporate Governance Function as Principal Liaison in Shareholder Communication Respond directly to the shareholders of the Company, questions and comments that are directed to the Lead Independent Director or to the Independent Directors of the Company as a group, with such consultation with the Chairman of the Board and the other Non-Independent Directors, as the Lead Independent Director may deem appropriate.

108 106 Financial Statements CONTENTS 107 Directors Statement 110 Independent Auditors Report 111 Statement of Financial Position 112 Consolidated Statement of Profit or Loss 113 Consolidated Statement of Comprehensive Income 114 Consolidated Statement of Changes in Equity 116 Consolidatd Statement of Cash Flows 117 Notes to the Financial Statements

109 Annual Report Directors Statement Year ended 31 December 2015 The Board of Directors is pleased to submit this annual report to the members of China Aviation Oil (Singapore) Corporation Ltd (the Company ) together with the audited financial statements for the financial year ended 31 December In our opinion: (a) (b) the consolidated financial statements of China Aviation Oil (Singapore) Corporation Ltd and its subsidiaries (the Group ) and the statement of financial position of the Company set out on pages 111 to 167 are drawn up so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2015 and the financial performance, changes in equity and cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and 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. The Board of Directors has, on the date of this statement, authorised these financial statements for issue. DIRECTORS The directors in office at the date of this statement are as follows: Lin Wanli Chairman (Appointed on 11 August 2015) Wang Kai Yuen Deputy Chairman/Lead Independent Director Meng Fanqiu Chief Executive Officer/Executive Director Ang Swee Tian Felipe Arbelaez (Appointed on 30 July 2015) Li Runsheng Luo Qun Bella Young Pit Lai (Appointed on 22 April 2015) Zhao Shousen Mr Sun Li, Mr Alan Haywood and Mr Chen Liming stepped down as Directors of the Company on 11 August 2015, 30 July 2015 and 22 April 2015 respectively.

110 108 China Aviation Oil (Singapore) Corporation Ltd Directors Statement Year ended 31 December 2015 DIRECTORS INTERESTS According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the Act ), none of the directors who held office at the end of the financial year had interests in shares, debentures, warrants or share options of the Company, or of related corporations either at the beginning or at the end of the financial year except as follows: Holdings registered in the name of Director or nominee At 1 January 2015 At 31 December 2015 Holdings in which Director is deemed to have an interest At 1 January 2015 At 31 December 2015 The Company Wang Kai Yuen - Ordinary shares 57,600 57, ,000 (1) 120,000 (1) Ang Swee Tian - Ordinary shares 48, ,000 (1) Held by Wang Kai Yuen s spouse. There were no changes in any of the above mentioned interests in the Company between the end of the financial year and 21 January Neither at the end of, nor at any time during the financial 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 benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. AUDIT COMMITTEE The members of the Audit Committee during the year and at the date of this statement are: Ang Swee Tian (Chairman), non-executive, independent director Zhao Shousen (Vice-Chairman), non-executive, non-independent director Wang Kai Yuen, non-executive, independent director Li Runsheng, non-executive, independent director Felipe Arbelaez, non-executive, non-independent director The Audit Committee performed its functions specified in Section 201B(5) of the Act, the SGX Listing Manual, the 2012 Code of Corporate Governance and the Corporate Governance Policy of the Company. The Audit Committee has held four meetings since the last directors statement. In performing its functions, the Audit Committee met with the Company s external and internal auditors to discuss the scope of their work, the results of their examination and evaluation of the Company s internal accounting control system.

111 Annual Report Directors Statement Year ended 31 December 2015 AUDIT COMMITTEE (CONT D) The Audit Committee also reviewed the following: assistance provided by the Company s officers to the internal and external auditors; quarterly financial information and annual financial statements of the Group and the Company and the integrity of financial reporting of the Group and the Company (including the accounting principles) prior to their submission to the directors of the Company for approval; internal auditors plans to ensure that the plans adequately cover, in particular, significant internal controls of the Group and the Company relating to the financial, operational and compliance-related matters; external auditors plan to ensure that the plan adequately cover the audit of the statutory financial statements of the Group and the Company; and interested person transactions (as defined in Chapter 9 of the SGX Listing Manual). The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full authority and the discretion to invite any director or executive officer to attend its meetings. The Audit Committee also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees. Further details regarding the Audit Committee are disclosed in the Statement of Corporate Governance. The Audit Committee has recommended to the Board of Directors the appointment of Deloitte & Touche LLP as the auditors of the Company in place of the existing auditors, KPMG LLP, at the forthcoming Annual General Meeting of the Company. AUDITORS The retiring auditors, KPMG LLP, will not be seeking re-appointment at the forthcoming Annual General Meeting of the Company. Deloitte & Touche LLP has expressed its willingness to accept appointment as the auditors of the Company. In appointing our auditors for the Company, subsidiaries and significant associated companies, we have complied with Rules 712 and 715 of the SGX Listing Manual. On behalf of the Board of Directors Wang Kai Yuen Deputy Chairman & Lead Independent Director Meng Fanqiu Chief Executive Officer/Executive Director 15 March 2016

112 110 China Aviation Oil (Singapore) Corporation Ltd Independent Auditors Report Members of the Company China Aviation Oil (Singapore) Corporation Ltd REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of China Aviation Oil (Singapore) Corporation Ltd (the Company ) and its subsidiaries (the Group ), which comprise the statement of financial position of the Group and the Company as at 31 December 2015, the statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of cash flows of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 111 to 167. Management s responsibility for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the Act ) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets. Auditors responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2015 and the financial performance, changes in equity and cash flows of the Group for the year ended on that date. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary corporations incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act. KPMG LLP Public Accountants and Chartered Accountants Singapore 15 March 2016

113 Annual Report Statement of Financial Position As at 31 December 2015 Group Company Note US$ 000 US$ 000 US$ 000 US$ 000 Non-current assets Property, plant and equipment 4 6,214 6,790 6,114 6,726 Intangible assets 5 1,826 2, ,188 Subsidiaries 6 37,648 33,435 Associates and joint venture 7 265, ,143 82,625 82,625 Trade and other receivables 10 35,480 35,480 Deferred tax assets 8 7,604 7,587 7,600 7, , , , ,037 Current assets Inventories 9 56,826 38,098 51,702 34,214 Trade and other receivables , , , ,373 Cash and cash equivalents ,505 94, ,064 84, ,253 1,091, ,563 1,031,630 Total assets 845,517 1,378, ,675 1,198,667 Equity attributable to owners of the Company Share capital , , , ,573 Reserves , , , ,020 Total equity 592, , , ,593 Non-current liabilities Deferred tax liabilities 8 6,164 6,238 Current liabilities Trade and other payables , , , ,853 Loans and borrowings 15 1,076 1,221 Current tax liabilities , , , ,074 Total liabilities 252, , , ,074 Total equity and liabilities 845,517 1,378, ,675 1,198,667 The accompanying notes form an integral part of these financial statements.

114 112 China Aviation Oil (Singapore) Corporation Ltd Consolidated Statement of Profit or Loss Year ended 31 December 2015 Note US$ 000 US$ 000 Revenue 18 8,987,487 17,061,031 Cost of sales (8,952,043) (17,033,634) Gross profit 35,444 27,397 Other income 19 (240) 1,168 Administrative expenses (13,594) (12,520) Other operating expenses 731 (5,135) Results from operating activities 22,341 10,910 Finance costs 20 (1,040) (3,075) Share of profit of associates and joint venture (net of tax) 7 42,296 43,194 Profit before tax 63,597 51,029 Tax expense 21 (2,316) (1,869) Profit for the year 19 61,281 49,160 Attributable to: Owners of the Company 61,281 49,160 Earnings per share: Basic earnings per share (cents) Diluted earnings per share (cents) The accompanying notes form an integral part of these financial statements.

115 Annual Report Consolidated Statement of Comprehensive Income Year ended 31 December US$ 000 US$ 000 Profit for the year 61,281 49,160 Other comprehensive income Items that are or may be reclassified subsequently to profit or loss: Translation differences relating to financial statements of foreign associates (9,389) (5,514) Other comprehensive income for the year, net of tax (9,389) (5,514) Total comprehensive income for the year 51,892 43,646 Attributable to: Owners of the Company 51,892 43,646 The accompanying notes form an integral part of these financial statements.

116 114 China Aviation Oil (Singapore) Corporation Ltd Consolidated Statement of Changes in Equity Year ended 31 December 2015 Note Share capital Foreign currency translation reserve Statutory reserves Reserve for own shares Accumulated profits Total equity US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 At 1 January ,573 32,141 9,089 (5,482) 272, ,562 Total comprehensive income for the year Profit for the year 49,160 49,160 Other comprehensive income Items that are or may be reclassified subsequently to profit or loss: Translation differences relating to financial statements of foreign associates (5,514) (5,514) Total other comprehensive income (5,514) (5,514) Total comprehensive income for the year (5,514) 49,160 43,646 Contributions by and distributions to owners Share of associates accumulated profits transferred to statutory reserve 6,878 (6,878) Dividends to equity holders 13 (13,694) (13,694) Total transactions with owners 6,878 (20,572) (13,694) At 31 December ,573 26,627 15,967 (5,482) 300, ,514 The accompanying notes form an integral part of these financial statements.

117 Annual Report Consolidated Statement of Changes in Equity Year ended 31 December 2015 Note Share capital Foreign currency translation reserve Statutory reserves Reserve for own shares Accumulated profits Total equity US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 At 1 January ,573 26,627 15,967 (5,482) 300, ,514 Total comprehensive income for the year Profit for the year 61,281 61,281 Other comprehensive income Items that are or may be reclassified subsequently to profit or loss: Translation differences relating to financial statements of foreign associates (9,389) (9,389) Total other comprehensive income (9,389) (9,389) Total comprehensive income for the year (9,389) 61,281 51,892 Contributions by and distributions to owners Share of associates accumulated profits transferred to statutory reserve 2,857 (2,857) Dividends to equity holders 13 (12,765) (12,765) Total transactions with owners 2,857 (15,622) (12,765) At 31 December ,573 17,238 18,824 (5,482) 346, ,641 The accompanying notes form an integral part of these financial statements.

118 116 China Aviation Oil (Singapore) Corporation Ltd Consolidated Statement of Cash Flows Year ended 31 December 2015 Note US$ 000 US$ 000 Cash flows from operating activities Profit for the year 61,281 49,160 Adjustments for: Depreciation of property, plant and equipment Amortisation of intangible assets (Reversal)/Allowance for impairment loss on doubtful debts net (1,588) 2,741 Share of profit of associates and joint venture (net of tax) (42,296) (43,194) Tax expense 2,316 1,869 Interest income (375) (304) Interest expense 251 1,548 Unrealised exchange differences ,203 13,673 Change in inventories (18,728) 75,027 Change in trade and other receivables 624, ,745 Change in trade and other payables (572,241) (343,680) Cash generated from operating activities 54,344 49,765 Tax paid (2,225) (2,563) Net cash from operating activities 52,119 47,202 Cash flows from investing activities Interest received Acquisition of property, plant and equipment (251) (224) Acquisition of intangible assets (188) (241) Dividends from associates 37,238 35,146 Net cash from investing activities 37,172 34,991 Cash flows from financing activities Interest paid (251) (1,548) Proceeds from loans and borrowings 47, ,755 Repayment of loans and borrowings (47,900) (390,364) Dividends paid (12,765) (13,694) Net cash used in financing activities (13,016) (43,851) Net increase in cash and cash equivalents 76,275 38,342 Cash and cash equivalents at 1 January 94,286 56,299 Effect of exchange rate fluctuations on cash held (56) (355) Cash and cash equivalents at 31 December ,505 94,286 The accompanying notes form an integral part of these financial statements.

119 Annual Report Notes to the Financial Statements Year ended 31 December 2015 These notes form an integral part of the financial statements. The financial statements were authorised for issue by the Board of Directors on 15 March DOMICILE AND ACTIVITIES China Aviation Oil (Singapore) Corporation Ltd (the Company ) is a company incorporated in the Republic of Singapore. The address of the Company s registered office is 8 Temasek Boulevard, #31-02 Suntec Tower Three, Singapore The financial statements of the Group as at and for the year ended 31 December 2015 comprise the Company and its subsidiaries (together referred to as the Group and individually as Group entities ) and the Group s interest in equityaccounted investees. The principal activities of the Group are those relating to trading in aviation oil and other petroleum products, and investment holding. The immediate and ultimate holding company during the financial year was China National Aviation Fuel Group Corporation ( CNAF ), a company incorporated in the People s Republic of China ( PRC ). 2 BASIS OF PREPARATION 2.1 Statement of compliance The financial statements have been prepared in accordance with the Singapore Financial Reporting Standards (FRS). 2.2 Basis of measurement The financial statements have been prepared on the historical cost basis except as otherwise described in the notes below. 2.3 Functional and presentation currency These financial statements are presented in United States (US) dollars, which is the Company s functional currency. All financial information presented in US dollars has been rounded to the nearest thousand, unless otherwise stated. 2.4 Use of estimates and judgements The preparation of financial statements in conformity with FRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

120 118 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December BASIS OF PREPARATION (CONT D) 2.4 Use of estimates and judgements (cont d) Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements and information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are discussed in note SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by Group entities. 3.1 Basis of consolidation Business combinations Business combinations are accounted for using the acquisition method in accordance with FRS 103 Business Combination as at the acquisition date, which is the date on which control is transferred to the Group. The Group measures goodwill at the acquisition date as: the fair value of the consideration transferred; plus the recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree, over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. Any goodwill that arises is tested annually for impairment. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss. Any contingent consideration payable is recognised at fair value at the acquisition date and included in the consideration transferred. If the contingent consideration that meets the definition of a financial instrument is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss. When share-based payment awards (replacement awards) are exchanged for awards held by the acquiree s employees (acquiree s awards) and relate to past services, then all or a portion of the amount of the acquirer s replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the marketbased value of the replacement awards compared with the market-based value of the acquiree s awards and the extent to which the replacement awards relate to past and/or future service.

121 Annual Report Notes to the Financial Statements Year ended 31 December SIGNIFICANT ACCOUNTING POLICIES (CONT D) 3.1 Basis of consolidation (cont d) Business combinations (cont d) Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance. Investments in associates and joint venture (equity-accounted investees) Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies of these entities. Significant influence is presumed to exist when the Group holds 20% or more of the voting power of another entity. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. Investments in associates and joint venture are accounted for using the equity method. They are recognised initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group s share of the profit or loss and other comprehensive income of equity-accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases. When the Group s share of losses exceeds its interest in an equity-accounted investee, the carrying amount of the investment, together with any long-term interests that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation to fund the investee s operations or has made payments on behalf of the investee. Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equityaccounted investees are eliminated against the investment to the extent of the Group s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

122 120 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December SIGNIFICANT ACCOUNTING POLICIES (CONT D) 3.1 Basis of consolidation (cont d) Subsidiaries, associates and joint venture in the separate financial statements Investments in subsidiaries, associates and joint venture are stated in the Company s statement of financial position at cost less accumulated impairment losses. 3.2 Foreign currency Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognised in profit or loss. Foreign operations The assets and liabilities of foreign operations, excluding goodwill and fair value adjustments arising on acquisition, are translated to US dollars at exchange rates at the reporting date. The income and expenses of foreign operations are translated to US dollars at exchange rates at the dates of the transactions. Goodwill and fair value adjustments arising on the acquisition of a foreign operation on or after 1 January 2005 are treated as assets and liabilities of the foreign operation and translated at the exchange rates at the reporting date. For acquisitions prior to 1 January 2005, the exchange rates at the date of acquisition were used. Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve in equity. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the foreign currency translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, foreign exchange gains and losses arising from such a monetary item that are considered to form part of a net investment in a foreign operation are recognised in other comprehensive income, and are presented in the foreign currency translation reserve in equity.

123 Annual Report Notes to the Financial Statements Year ended 31 December SIGNIFICANT ACCOUNTING POLICIES (CONT D) 3.3 Property, plant and equipment Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. The gain or loss on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in profit or loss. Subsequent costs The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Depreciation Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately. Depreciation is recognised as an expense in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment, unless it is included in the carrying amount of another asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Depreciation is recognised from the date that the property, plant and equipment are installed and are ready for use. The estimated useful lives for the current and comparative periods are as follows: Leasehold properties Motor vehicles Furniture and fittings Office equipment Renovations Computers 25 years 8 years 8 years 4-8 years 5 years 4-5 years Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period, and adjusted if appropriate.

124 122 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December SIGNIFICANT ACCOUNTING POLICIES (CONT D) 3.4 Intangible assets Goodwill Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. For the measurement of goodwill at initial recognition, see note 3.1. Subsequent measurement Goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity-accounted investees. Other intangible assets Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses. Subsequent expenditure Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred. Amortisation Amortisation is calculated based on the cost of the asset, less its residual value. Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated useful life for the current and comparative years are as follows: Software Customer contracts 3 years 1 year Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate.

125 Annual Report Notes to the Financial Statements Year ended 31 December SIGNIFICANT ACCOUNTING POLICIES (CONT D) 3.5 Financial instruments Non-derivative financial assets The Group initially recognises loans and receivables on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The Group has the following non-derivative financial assets: loans and receivables. Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables comprise cash and cash equivalents, and trade and other receivables. Cash and cash equivalents Cash and cash equivalents comprise cash balances and short-term deposits with maturities of three months or less from the acquisition date that are subject to an insignificant risk of changes in their fair value, and are used by the Group in the management of its short-term commitments. Non-derivative financial liabilities Financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method. Other financial liabilities comprise loans and borrowings, and trade and other payables.

126 124 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December SIGNIFICANT ACCOUNTING POLICIES (CONT D) 3.5 Financial instruments (cont d) Derivative financial instruments The Group holds oil commodity derivatives that are recognised initially at fair value; any attributable transaction costs are recognised in profit or loss as incurred. Subsequent to initial recognition, these derivatives are measured at fair value, and changes in fair value are recognised immediately in profit or loss. These derivative financial instruments are not designated in a hedge relationship. Intra-group financial guarantees in the separate financial statements Financial guarantees are financial instruments issued by the Company that require the issuer to make specified payments to reimburse the holder for the loss it incurs because a specified debtor fails to meet payment when due in accordance with the original or modified terms of a debt instrument. Financial guarantees are recognised initially at fair value and are classified as financial liabilities. Subsequent to initial measurement, the financial guarantees are stated at the higher of the initial fair value less cumulative amortisation and the amount that would be recognised if they were accounted for as contingent liabilities. When financial guarantees are terminated before their original expiry date, the carrying amount of the financial guarantee is transferred to profit or loss. Share capital Ordinary shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects. Repurchase, disposal and reissue of share capital (treasury shares) When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the reserve for own share account. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in non-distributable capital reserve. 3.6 Impairment Non-derivative financial assets A financial asset not carried at fair value through profit or loss, including interest in associates and joint venture, is assessed at the end of each reporting period to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event(s) has occurred after the initial recognition of the asset, and that the loss event(s) has an impact on the estimated future cash flows of that asset that can be estimated reliably.

127 Annual Report Notes to the Financial Statements Year ended 31 December SIGNIFICANT ACCOUNTING POLICIES (CONT D) 3.6 Impairment (cont d) Non-derivative financial assets (cont d) Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers in the Group, economic conditions that correlate with defaults or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment. Loans and receivables The Group considers evidence of impairment for loans and receivables at both a specific asset and collective level. All individually significant loans and receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Loans and receivables that are not individually significant are collectively assessed for impairment by grouping together loans and receivables with similar risk characteristics. In assessing collective impairment, the Group uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows, discounted at the asset s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against loans and receivables. Interest on the impaired asset continues to be recognised. When the Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through profit or loss. Associates and joint venture An impairment loss in respect of an associate or joint venture is measured by comparing the recoverable amount of the investment with its carrying amount. An impairment loss is recognised in profit or loss. An impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount. Non-financial assets The carrying amounts of the Group s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset s recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each year at the same time. An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit ( CGU ) exceeds its estimated recoverable amount.

128 126 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December SIGNIFICANT ACCOUNTING POLICIES (CONT D) 3.6 Impairment (cont d) Non-financial assets (cont d) The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGU. Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination. The Group s corporate assets do not generate separate cash inflows and are utilised by more than one CGU. Corporate assets are allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which the corporate asset is allocated. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amounts of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately, and therefore is not tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a single asset when there is objective evidence that the investment in an associate may be impaired. 3.7 Inventories Inventories held for trading purposes are measured at fair value less costs to sell and any changes in fair value less costs to sell are recognised in profit or loss in the period of change. Inventories held by subsidiaries and associates, for sale to customers, are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and estimated costs necessary to make the sale.

129 Annual Report Notes to the Financial Statements Year ended 31 December SIGNIFICANT ACCOUNTING POLICIES (CONT D) 3.8 Employee benefits Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees. Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably. Share-based payment transactions The grant date fair value of equity-settled share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. 3.9 Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost Revenue Sale of goods Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.

130 128 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December SIGNIFICANT ACCOUNTING POLICIES (CONT D) 3.10 Revenue (cont d) Trading of oil commodity derivatives Gains or losses on oil commodity derivatives which are classified as held for trading purposes are recognised in profit or loss on a net basis. Dividend income Dividend income is recognised in profit or loss on the date that the Group s right to receive payment is established Operating leases Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease Finance income and finance costs Finance income is recognised as it accrues in profit or loss, using the effective interest method. Finance costs comprise bank charges and interest expenses on loans and borrowings. Interest expenses are recognised in profit or loss using the effective interest method Tax Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for: temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary difference and it is probable that they will not reverse in the foreseeable future; and taxable temporary differences arising on the initial recognition of goodwill. The measurement of deferred taxes reflects the tax consequences that would follow the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

131 Annual Report Notes to the Financial Statements Year ended 31 December SIGNIFICANT ACCOUNTING POLICIES (CONT D) 3.13 Tax (cont d) Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. In determining the amount of current and deferred tax, the Group takes into the impact of uncertain tax positions and whether additional taxes and interest may be due. The Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Group to change its judgment regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made Earnings per share The Group presents basic and diluted earnings per share ( EPS ) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares Segment reporting An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group s other components. All operating segments operating results are reviewed regularly by the Group s CEO (the chief operating decision maker) to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available. Segment results that are reported to the Group s CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Company s headquarters), head office expenses, and tax assets and liabilities. Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and intangible assets other than goodwill.

132 130 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December SIGNIFICANT ACCOUNTING POLICIES (CONT D) 3.16 New standards and interpretations not adopted A number of new standards, amendments to standards and interpretations are effective and relevant for annual periods beginning after 1 January 2015, and have not been applied in preparing these financial statements. Except as otherwise indicated below, those new standards, amendments to standards, and interpretations are not expected to have a significant effect on the financial statements of the Group and Company. The Group does not plan to adopt these standards early. FRS 115 Revenue from Contracts with Customers FRS 115 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It also introduces new cost guidance which requires certain costs of obtaining and fulfilling contracts to be recognised as separate assets when specified criteria are met. When effective, FRS 115 replaces existing revenue recognition guidance, including FRS 18 Revenue. The Group is currently assessing the impact on adoption of this standard in financial year ending 31 December FRS 109 Financial Instruments FRS 109 replaces most of the existing guidance in FRS 39 Financial Instruments: Recognition and Measurement. It includes revised guidance on classification and measurement of financial instruments, a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements. The Group is currently assessing the impact on adoption of this standard in financial year ending 31 December 2018.

133 Annual Report Notes to the Financial Statements Year ended 31 December PROPERTY, PLANT AND EQUIPMENT Group Leasehold properties Motor vehicles Furniture and fittings Office equipment Renovations Computers Total US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Cost At 1 January , ,638 Additions At 31 December , ,862 Additions At 31 December , ,100 12,113 Accumulated depreciation At 1 January , ,261 Depreciation for the year At 31 December , ,072 Depreciation for the year At 31 December , ,899 Carrying amounts At 1 January , ,377 At 31 December , ,790 At 31 December , ,214

134 132 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December PROPERTY, PLANT AND EQUIPMENT (CONT D) Company Leasehold properties Motor vehicles Furniture and fittings Office equipment Renovations Computers Total US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Cost At 1 January , ,581 Additions At 31 December , ,776 Additions At 31 December , ,057 11,970 Accumulated depreciation At 1 January , ,258 Depreciation for the year At 31 December , ,050 Depreciation for the year At 31 December , ,856 Carrying amounts At 1 January , ,323 At 31 December , ,726 At 31 December , ,114

135 Annual Report Notes to the Financial Statements Year ended 31 December PROPERTY, PLANT AND EQUIPMENT (CONT D) The following are properties held by the Group and Company: Location Description/ Uses of property Land area/ Built-up area (square meters) Leasehold term 8 Temasek Boulevard #31-01 Suntec Tower Three Singapore Office years from 1 March Temasek Boulevard #31-02 Suntec Tower Three Singapore Office years from 1 March INTANGIBLE ASSETS Group Goodwill on consolidation Customer contracts Software Total US$ 000 US$ 000 US$ 000 US$ 000 Cost At 1 January , ,511 4,326 Additions At 31 December , ,752 4,567 Additions At 31 December , ,940 4,755 Accumulated amortisation At 1 January ,511 Amortisation for the year At 31 December ,564 2,198 Amortisation for the year At 31 December ,295 2,929 Carrying amounts At 1 January ,181 1,634 2,815 At 31 December ,181 1,188 2,369 At 31 December , ,826 The amortisation of software is included in administrative expenses.

136 134 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December INTANGIBLE ASSETS (CONT D) Impairment testing of goodwill Goodwill on consolidation has been allocated to the Group s cash generating units ( CGUs ) for impairment testing as follows: US$ 000 US$ 000 Group China Aviation Oil (Hong Kong) Company Limited ( CAOHK ) North American Fuel Corporation ( NAFCO ) ,181 1,181 The recoverable amounts of the above CGUs were determined based on its value-in-use, determined by discounting the pretax future cash flows to be generated from the continuing use of the CGUs. In the current year, management assessed that the carrying amount of the CGUs were determined to be higher than its recoverable amount. Key assumptions used in the estimation of value-in-use were as follows: CAOHK NAFCO CAOHK NAFCO % % % % Discount rate (pre-tax) Long-term growth rate Forecasted earnings before interest, tax, depreciation and amortisation ( EBITDA ) growth rate (average of next five years) The discount rate used is estimated based on past experience and industry weighted average cost of capital. The long-term growth rate has been determined based on the long-term compound annual growth rate estimated by management with reference to the nominal GDP growth rate for the countries in which the CGU is based. The forecasted EBITDA growth rates are estimated based on management s past experience of managing the CGUs and their expectations of the CGUs forecasted performances. There is no reasonably possible change in a key assumption which would result in the carrying amount of the CGUs to exceed its recoverable amount.

137 Annual Report Notes to the Financial Statements Year ended 31 December INTANGIBLE ASSETS (CONT D) Company Software US$ 000 Cost At 1 January ,511 Additions 241 At 31 December ,752 Additions 188 At 31 December ,940 Accumulated amortisation At 1 January Amortisation for the year 687 At 31 December ,564 Amortisation for the year 731 At 31 December ,295 Carrying amounts At 1 January ,634 At 31 December ,188 At 31 December SUBSIDIARIES Company US$ 000 US$ 000 Unquoted equity investment, at cost 37,648 33,435 Details of the subsidiaries are as follows: Country of Ownership Name of subsidiary incorporation % % CAOT Pte Ltd ( CAOT ) Singapore CAOHK Hong Kong NAFCO United States of America China Aviation Oil (Europe) Limited ( CAO Europe ) United Kingdom On 24 February 2014, the Company subscribed to additional US$3,000,000 of ordinary shares in CAO Europe. The Company issued financial guarantees to a bank and its trading counterparties on behalf of its subsidiary. The fair value of financial guarantees issued amounted to US$4,213,000 (2014: US$2,340,000) and is accounted for as additional investment in the subsidiary.

138 136 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December SUBSIDIARIES (CONT D) The fair value of the financial guarantees issued to the bank and the trading counterparties are included in loans and borrowings and trade and other payables respectively. At the reporting date, the Company does not consider it probable that a claim will be made against the Company under these guarantees. The subsidiaries are not considered significant subsidiaries of the Group. For this purpose, a subsidiary is considered significant, as defined under the Singapore Exchange Limited Listing Manual, if its net tangible assets represent 20% or more of the Group s consolidated net tangible assets, or if its pre-tax profit accounts for 20% or more of the Group s consolidated pre-tax profit. 7 ASSOCIATES AND JOINT VENTURE Group Company US$ 000 US$ 000 US$ 000 US$ 000 Investments in associates 261, ,335 82,625 82,625 Investment in joint venture 3,978 4, , ,143 82,625 82,625 Associates The Group has two (2014: two) associates that are material and two other associates that are individually immaterial to the Group. All are equity accounted. The following are for the material associates: Nature of business Principle place of business/country of incorporation Shanghai Pudong International Airport Aviation Fuel Supply Company Ltd ( SPIA ) # Exclusive supplier of jet fuel at Shanghai Pudong International Airport People s Republic of China Ownership interest/voting rights held 33% (2014: 33%) 49% (2014: 49%) Fair value of ownership interest Not applicable Not applicable (if listed) China National Aviation Fuel TSN-PEK Pipeline Transportation Corporation Ltd ( TSN-PEKCL Jet fuel transporter to Beijing Capital International Airport and Tianjin Binhai International Airport People s Republic of China # Audited by Crowe Horwath China Certified Public Accountants, LLP Shanghai Branch, a member of the Chinese Institute of Certified Public Accountants, for statutory audit purposes. Audited by a member firm of KPMG International for consolidation Not considered a significant associate of the Group. For this purpose, an associate is considered significant as defined under the Singapore Exchange Limited Listing Manual if the Group s share of its net tangible assets represents 20% or more of the Group s consolidated net tangible assets, or if the Group s share of its pre-tax profit accounts for 20% or more of the Group s consolidated pre-tax profit.

139 Annual Report Notes to the Financial Statements Year ended 31 December ASSOCIATES AND JOINT VENTURE (CONT D) Associates (cont d) The following summarises the financial information of each of the Group s material associates based on their respective financial statements prepared in accordance with FRS, modified for fair value adjustments on acquisition and differences in the Group s accounting policies. The table also analyses, in aggregate, the carrying amount and share of profit and other comprehensive income of the remaining individually immaterial associates. SPIA TSN-PEKCL Immaterial associates Total US$ 000 US$ 000 US$ 000 US$ Revenue 2,349,979 19,297 2,369,276 Profit from continuing operations/ Total comprehensive income 117,830 4, ,395 Non-current assets 46,081 16,931 63,012 Current assets 718,184 24, ,336 Non-current liabilities Current liabilities (288,441) (1,570) (290,011) Net assets 475,824 39, ,337 Group s interest in net assets of investee at beginning of the year 161,785 43,489 36, ,269 Group s share of profit from continuing operations/ Total comprehensive income 38,884 2,237 2,005 43,126 Dividend received during the year (34,534) (2,704) (37,238) Translation differences for the year (6,392) (830) (2,167) (9,389) Goodwill 21, ,874 Carrying amount of interest in investee at end of the year 181,452 43,175 37, ,642

140 138 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December ASSOCIATES AND JOINT VENTURE (CONT D) Associates (cont d) SPIA TSN-PEKCL Immaterial associates Total US$ 000 US$ 000 US$ 000 US$ Revenue 3,534,996 17,854 3,552,850 Profit from continuing operations/ Total comprehensive income 126,884 3, ,204 Non-current assets 52,527 66, ,037 Current assets 819,351 23, ,834 Non-current liabilities Current liabilities (381,621) (1,293) (382,914) Net assets 490,257 88, ,957 Group s interest in net assets of investee at beginning of the year 156,371 45,079 38, ,543 Group s share of profit from continuing operations/ Total comprehensive income 41,872 1,627 (113) 43,386 Dividend received during the year (32,409) (2,737) (35,146) Translation differences for the year (4,049) (480) (985) (5,514) Goodwill 21,709 1, ,066 Carrying amount of interest in investee at end of the year 183,494 44,518 37, ,335 In 2015, dividends declared by associates amounted to US$37,238,195 (2014: US$35,146,048) were received during the financial year.

141 Annual Report Notes to the Financial Statements Year ended 31 December ASSOCIATES AND JOINT VENTURE (CONT D) Associates (cont d) Details of immaterial associates are as follows: Country of Ownership Name of associate Incorporation % % China Aviation Oil Xinyuan Petrochemicals Co. Ltd ( Xinyuan ) People s Republic of China Oilhub Korea Yeosu Co., Ltd. ( OKYC ) Republic of Korea Joint venture The Group s subsidiary, CAOHK, entered into a joint venture agreement with three partners to set up a new company, CNAF Hong Kong Refuelling Limited ( CNAF HKR ) in Hong Kong. CNAF HKR provides into-plane refuelling services at Hong Kong International Airport. Details of the joint venture are as follows: Country of Ownership Name of joint venture Incorporation % CNAF Hong Kong Refuelling Limited Hong Kong 39 Not considered a significant joint venture of the Group. For this purpose, a joint venture is considered significant, as defined under the Singapore Exchange Limited Listing Manual, if the Group s share of its net tangible assets represents 20% or more of the Group s consolidated net tangible assets, or if the Group s share of its pre-tax profit accounts for 20% or more of the Group s consolidated pre-tax profit.

142 140 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December ASSOCIATES AND JOINT VENTURE (CONT D) Joint venture (cont d) Summary financial information of the joint venture held by the Group is as follows: US$ 000 US$ 000 Revenue 4,057 Loss from continuing operations/total comprehensive income (2,128) (494) Non-current assets 11,432 4,766 Current assets ,680 Non-current liabilities Current liabilities (1,940) (118) Net assets 10,280 12,328 1 Includes cash and cash equivalents of US$122,889 (2014: US$6,974,000). Group s interest in net assets of investee at beginning of the year 4,808 5,000 Group s share of loss from continuing operations/total comprehensive income (830) (192) Carrying amount of interest in investee at end of the year 3,978 4,808 8 DEFERRED TAX ASSETS AND LIABILITIES Recognised deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following: Group Company US$ 000 US$ 000 US$ 000 US$ 000 Deferred tax assets Tax losses carry-forward 7,604 7,587 7,600 7,583 Deferred tax liabilities Investments in associates (6,164) (6,238)

143 Annual Report Notes to the Financial Statements Year ended 31 December DEFERRED TAX ASSETS AND LIABILITIES (CONT D) Recognised deferred tax assets and liabilities (cont d) Movements in temporary differences during the year are as follows: At 1 January 2014 Recognised in profit or loss At 31 December 2014 Recognised in profit or loss At 31 December 2015 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Group Tax losses carry-forward 7, , ,604 Investments in associates (6,228) (10) (6,238) 74 (6,164) , ,440 Company Tax losses carry-forward 7, , ,600 Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items: Group Company US$ 000 US$ 000 US$ 000 US$ 000 Deductible temporary differences 3,499 2,596 3,499 2,596 Tax losses carry-forward 26,149 51,951 26,149 51,951 29,648 54,547 29,648 54,547 The tax losses carry-forward relate to losses arising from prior years during which the Company was granted concessionary rate of tax under the Global Trader Programme ( GTP ). In accordance with Section 37B of the Income Tax Act, the utilisation of these tax losses is adjusted after considering the tax rate applicable for the Company s chargeable income prior to set-off. Tax losses and other temporary differences do not expire under current tax legislations. Deferred tax assets have not been recognised in respect of these items due to the uncertainty of the availability of future taxable profit against which the Group can utilise the benefits therefrom.

144 142 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December INVENTORIES Group Company US$ 000 US$ 000 US$ 000 US$ 000 Trading inventories at fair value less costs to sell 51,702 34,214 51,702 34,214 Inventories at the lower of cost and net realisable value 5,124 3,884 56,826 38,098 51,702 34,214 Trading inventories recognised in cost of sales amounted to US$8,862,582,000 (2014: US$16,954,836,000) for the Group and the Company. 10 TRADE AND OTHER RECEIVABLES Group Company US$ 000 US$ 000 US$ 000 US$ 000 Trade receivables 96, ,434 54, ,578 Other receivables 5,527 31,529 4,574 28,429 Deposits 2,214 4,532 1,312 4,532 Amounts due from: - subsidiary (trade) 13,994 - related corporations (trade) 195, , , ,513 - related corporation of a corporate shareholder (trade) 1,000 58,930 1,000 58,930 - subsidiaries (non-trade) 50,795 32, , , , ,048 Loan to subsidiaries 5,035 18, , , , ,122 Allowance for impairment loss on doubtful debts (5,429) (7,017) (5,429) (7,017) Loans and receivables 296, , , ,105 Derivative financial assets - oil commodity derivatives 40, ,092 40, , , , , ,586 Prepayments 533 2, , , , , ,853 Current 336, , , ,373 Non-current 35,480 35, , , , ,853 Transactions with subsidiaries and related corporations are priced on terms agreed between the parties. Outstanding balances with subsidiaries and related corporations are unsecured and there is no allowance for impairment loss arising from these outstanding balances.

145 Annual Report Notes to the Financial Statements Year ended 31 December TRADE AND OTHER RECEIVABLES (CONT D) In the current year, there are no interest bearing trade receivables. As at 31 December 2014, trade balances of US$32,270,000 due from a related corporation were interest bearing at 1.5% per annum. The non-trade amounts due from subsidiaries and the loan to subsidiaries are unsecured, interest-free and repayable on demand. The Group s and the Company s primary exposure to credit risk arises through its trade receivables. The Group s and the Company s trade receivables are due mainly from customers in the jet fuel industry, which are located in People s Republic of China and Hong Kong. The Group s and the Company s exposure to credit and currency risks, and impairment loss related to trade and other receivables, are disclosed in note CASH AND CASH EQUIVALENTS Group Company US$ 000 US$ 000 US$ 000 US$ 000 Cash at bank and in hand - Interest-bearing 38,433 29,056 38,433 29,056 - Non interest-bearing 22,072 55,230 5,631 44,987 Interest-bearing fixed deposits with financial institutions 110,000 10, ,000 10,000 Cash and cash equivalents in the statement of cash flows 170,505 94, ,064 84,043 As at 31 December 2015, interest-bearing fixed deposits of US$110,000,000 (2014: US$10,000,000) were placed with a related corporation, China National Fuel Finance Co., Ltd. The related corporation is a financial institution approved by the China Banking Regulatory Commission and is based in People s Republic of China ( PRC ). The weighted average effective interest rates per annum relating to interest-bearing deposits with banks and financial institutions at the reporting date are as disclosed below (interest rates reprice at intervals of one, three or six months): Interest rate Carrying amount Interest rate Carrying amount % US$ 000 % US$ 000 Group Cash at bank , ,056 US$ fixed deposits , , ,433 39,056 Company Cash at bank , ,056 US$ fixed deposits , , ,433 39,056 The Group s and the Company s exposure to foreign currency and interest rate risks are disclosed in note 17.

146 144 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December SHARE CAPITAL Company Number of shares Number of shares ( 000) ( 000) Fully paid ordinary shares, with no par value: In issue at 1 January 866, ,821 Bonus shares issue 143,363 In issue at 31 December 866, ,184 The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company s residual assets. All rights attached to the ordinary shares are suspended for the Company s own shares bought back and held by the Group. Such rights are reinstated when these shares are reissued. Bonus shares issue On 10 March 2014, the Company issued one new ordinary share for every five existing ordinary shares held in the capital of the company at no consideration ( Bonus Shares issue ). There is no financial impact arising from the bonus shares as they are issued at nil consideration without capitalisation of the Company s reserves. Capital management The Company defines capital as share capital and reserves. The consolidated share capital and reserves amount to US$592,641,000 (2014: US$553,514,000). The Board s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on capital, which the Group defines as net operating income divided by total shareholders equity. The Board also monitors the level of dividends declared to ordinary shareholders. From time to time, the Group may purchase its own shares in the market; the timing of these purchases depends on market prices. The purchase price (excluding brokerage, stamp duties, commission, applicable goods and services tax and other related expenses) to be paid for the shares is determined by the Directors or such authorised personnel as appointed by the Board of Directors for the purposes of effecting purchases or acquisitions of shares by the Company under the Share Purchase Mandate. There were no changes in the Group s approach to capital management during the year. The Company and its subsidiaries are subject to externally imposed capital requirements. The Company and its subsidiaries were in compliance with these externally imposed capital requirements during the years ended 31 December 2015 and 2014.

147 Annual Report Notes to the Financial Statements Year ended 31 December RESERVES Group Company US$ 000 US$ 000 US$ 000 US$ 000 Foreign currency translation reserve 17,238 26,627 Statutory reserves 18,824 15,967 Reserve for own shares (5,482) (5,482) (5,482) (5,482) Accumulated profits 346, , , , , , , ,020 (a) (b) The foreign currency translation reserve comprises foreign exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from the functional currency of the Company. The associates of the Group ( PRC Associates ) established in the People s Republic of China ( PRC ) follow the accounting principles and relevant financial regulations of the PRC applicable to enterprises established in the PRC (PRC GAAP) in the preparation of the accounting records and its financial statements. Under the relevant PRC regulations, the PRC Associates transferred a portion of their accumulated profits to statutory reserve for the following purposes: Statutory surplus reserve Pursuant to accounting regulations for foreign-invested PRC enterprises and the PRC Company Law, the associates are required to appropriate 10% of the profit arrived at in accordance with PRC GAAP for each year to a statutory reserve. The profit arrived at must be used to set off against any accumulated losses. The appropriation to statutory reserve, after offsetting against any accumulated losses, must be made before the distribution of dividends to shareholders. The appropriation is required until the statutory reserve reaches 50% of the registered capital. This statutory reserve is not distributable in the form of cash dividends. During the current and immediate preceding financial year, SPIA did not appropriate any profit to the statutory reserve as the statutory reserve of SPIA has reached 50% of its registered capital. Specific reserve for production safety According to the relevant PRC regulations, the PRC Associates are required to transfer an amount of their accumulated profits to a specific reserve as safety production fund. The amount transferred is based on the applicable rates applied to the PRC Associates turnover generated from the sale of jet fuel and related services. (c) The reserve for the Company s own shares comprises the cost of the Company s shares held by the Group. At 31 December 2015, the Group held 6,000,000 (2014: 6,000,000) of the Company s shares.

148 146 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December RESERVES (CONT D) (d) The following (one-tier tax exempt) dividends were declared and paid by the Group and Company: Group and Company US$ 000 US$ 000 Final exempt dividends paid in respect of the previous financial year of S$0.02 (2014: S$0.02) per share 12,765 13,694 (e) After the respective reporting date, the Directors have proposed a final (one-tier tax exempt) ordinary dividend of S$0.03 (2014: S$0.02) per share, amounting to US$18,244,000 (2014: US$13,023,000). The dividends have not been provided for. 14 TRADE AND OTHER PAYABLES Group Company US$ 000 US$ 000 US$ 000 US$ 000 Trade payables 157, , , ,478 Accrued operating expenses 17,482 18,353 17,482 17,834 Other payables 6,168 12,753 5,390 12,222 Advance receipts from customers 3,628 6, ,325 Amounts due to: - immediate and ultimate holding company (non-trade) 9,903 9, subsidiaries (non-trade) 4,840 1,249 - related corporation (trade) 15, ,894 10, ,894 - related corporation of a corporate shareholder (trade) Derivative financial liabilities - oil commodity derivatives 36,819 98,538 36,809 98,271 Intra-group financial guarantee , , , ,853 Amounts due to immediate and ultimate holding company, subsidiaries and related corporations are unsecured, interest-free and repayable on demand. The Group s and the Company s exposures to foreign currency and liquidity risks are disclosed in note 17. The Company issued financial guarantees to its trading counterparties on behalf of its subsidiary for credit terms extended by the trading counterparties to the subsidiary. The financial guarantees issued to trading counterparties expire on 30 September 2016.

149 Annual Report Notes to the Financial Statements Year ended 31 December LOANS AND BORROWINGS The financial guarantees were given by the Company to a bank on behalf of its subsidiary for banking facilities amounting to US$40,000,000 (2014: US$40,000,000). The financial guarantee issued to the bank expires on 7 May Group Company US$ 000 US$ 000 US$ 000 US$ 000 Current liabilities Intra-group financial guarantee 1,076 1, SHARE-BASED PAYMENT ARRANGEMENTS On 9 November 2001, the Company established a share-based payment programme that entitles directors and employees to purchase shares in the Company. On 9 October 2011, a grant on similar terms (except for exercise price and option period) was offered to directors and employees subject to approval by the State-owned Assets Supervision and Administration Commission of the State Council ( SASAC ) of the People s Republic of China ( PRC ). Subsequently, SASAC granted its approval for the offer of options on 8 November In accordance with this programme, holders of vested options are entitled to purchase shares at the exercise price determined at the date of grant. All options are to be settled by delivery of shares. The number of share options and their related weighted average exercise prices are as follows: Weighted average exercise price No. of options ( 000) Weighted average exercise price No. of options ( 000) At 1 January S$0.91 1,748 S$0.91 3,445 Forfeited during the year S$0.91 (1,748) S$0.91 (1,697) At 31 December S$0.91 1,748 The exercisability of the outstanding options at 31 December 2014 was conditional on the service and non-market performance conditions, as stipulated in the share-based payment programme, being met. As at 31 December 2014, the Company assessed that the service and non-market performance conditions in relation to the outstanding options have not been met. The share-based payment arrangement has also expired and the forfeiture of all outstanding share options has been approved by the Board of Directors on 12 February 2015.

150 148 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December FINANCIAL INSTRUMENTS Credit risk Exposure to credit risk The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was: Group Company US$ 000 US$ 000 US$ 000 US$ 000 Loans and receivables 336, , , ,586 Cash and cash equivalents 170,505 94, ,064 84, ,894 1,051, ,808 1,030,629 Impairment losses The ageing of trade and other receivables (excluding derivative financial assets and prepayments) at the reporting date is: Gross Impairment losses Gross Impairment losses US$ 000 US$ 000 US$ 000 US$ 000 Group Not past due 224, , days 60,935 23, days 9,006 3,795 (2,741) Over 90 days 7,212 (5,429) 6,156 (4,276) 301,465 (5,429) 830,100 (7,017) Company Not past due 235, , days 54,893 23, days 9,006 3,795 (2,741) Over 90 days 7,212 (5,429) 6,156 (4,276) 306,904 (5,429) 820,122 (7,017) The Group and the Company establish an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main component of this allowance is a specific loss component that relates to individually significant exposures.

151 Annual Report Notes to the Financial Statements Year ended 31 December FINANCIAL INSTRUMENTS (CONT D) Credit risk (cont d) Impairment losses (cont d) The movements in the allowance for impairment in respect of trade and other receivables during the year are as follows: US$ 000 US$ 000 Group and Company At 1 January 7,017 4,276 Impairment loss recognised 1,512 2,741 Impairment loss written back (3,100) At 31 December 5,429 7,017 The impairment losses recognised/written back are included in Other operating expenses. Liquidity risk The following are the expected contractual undiscounted cash outflows of financial liabilities, including interest payments and excluding the impact of netting agreements: Carrying amount Contractual cash flows Cash flows Within 1 year US$ 000 US$ 000 US$ 000 Group 2015 Non-derivative financial liabilities Trade and other payables # 206,260 (206,260) (206,260) Derivative financial liabilities Oil commodity derivatives* 36,819 (36,819) (36,819) 243,079 (243,079) (243,079) 2014 Non-derivative financial liabilities Trade and other payables # 713,970 (713,970) (713,970) Derivative financial liabilities Oil commodity derivatives* 98,538 (98,538) (98,538) 812,508 (812,508) (812,508)

152 150 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December FINANCIAL INSTRUMENTS (CONT D) Liquidity risk (cont d) Carrying amount Contractual cash flows Cash flows Within 1 year US$ 000 US$ 000 US$ 000 Company 2015 Non-derivative financial liabilities Trade and other payables # 180,493 (180,493) (180,493) Intra-group financial guarantee 1,277 Derivative financial liabilities Oil commodity derivatives* 36,809 (36,809) (36,809) 218,579 (217,302) (217,302) 2014 Non-derivative financial liabilities Trade and other payables # 686,084 (686,084) (686,084) Intra-group financial guarantee 1,394 (3,200) (3,200) Derivative financial liabilities Oil commodity derivatives* 98,271 (98,271) (98,271) 785,749 (787,555) (787,555) # Excludes derivative financial liabilities, advance receipts and intra-group financial guarantees. * The carrying amount and the contractual cash flows relate to the negative fair value of the derivative financial instruments.

153 Annual Report Notes to the Financial Statements Year ended 31 December FINANCIAL INSTRUMENTS (CONT D) Currency risk Exposure to currency risk The Group and Company s exposures to foreign currency risk were as follows based on notional amounts: Singapore dollar Renminbi Hong Kong dollar British pound US$ 000 US$ 000 US$ 000 US$ 000 Group 2015 Trade and other receivables Cash and cash equivalents 670 1, Trade and other payables (3,358) (255) (2,387) Trade and other receivables Cash and cash equivalents 954 4, Trade and other payables (3,841) (228) (2,510) 4, Singapore dollar Renminbi US$ 000 US$ 000 Company 2015 Trade and other receivables 301 Cash and cash equivalents Trade and other payables (3,339) (255) (2,378) (243) 2014 Trade and other receivables 377 Cash and cash equivalents 936 3,452 Trade and other payables (3,833) (228) (2,520) 3,224

154 152 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December FINANCIAL INSTRUMENTS (CONT D) Currency risk (cont d) Sensitivity analysis At the reporting date, a 10% strengthening of the US dollar against the following currencies would increase/(decrease) profit/ (loss) before tax by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. Group Company Profit/(loss) before tax Profit/(loss) before tax US$ 000 US$ 000 US$ 000 US$ 000 Singapore dollar Renminbi (82) (430) 24 (322) Hong Kong dollar (7) (6) British pound (55) (56) A 10% weakening of the US dollar against the above currencies would have an equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant. Interest rate risk Profile At the reporting date, the interest rate profile of the interest-bearing financial instruments was: Group Company US$ 000 US$ 000 US$ 000 US$ 000 Fixed rate instruments Financial assets 148,433 71, ,433 71,326 Fair value sensitivity analysis The Group and the Company do not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss. Fair values Fair values versus carrying amounts At the reporting date, the carrying amounts of the Group s and the Company s financial instruments carried at cost or amortised cost approximate their fair values because of the short period to maturity.

155 Annual Report Notes to the Financial Statements Year ended 31 December FINANCIAL INSTRUMENTS (CONT D) Fair value hierarchy The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date; Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). Level 1 Level 2 Level 3 Total US$ 000 US$ 000 US$ 000 US$ 000 Group 31 December 2015 Derivative financial assets 40,353 40,353 Derivative financial liabilities (36,819) (36,819) 3,534 3, December 2014 Derivative financial assets 134, ,092 Derivative financial liabilities (98,538) (98,538) 35,554 35,554 Company 31 December 2015 Derivative financial assets 40,269 40,269 Derivative financial liabilities (36,809) (36,809) 3,460 3, December 2014 Derivative financial assets 133, ,481 Derivative financial liabilities (98,271) (98,271) 35,210 35,210 The valuation techniques and the inputs used in the fair value measurements of the financial instruments are disclosed in note 24.

156 154 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December FINANCIAL INSTRUMENTS (CONT D) Offsetting financial assets and financial liabilities The disclosures set out in the tables below include financial assets and financial liabilities that are subject to an enforceable master netting agreement or similar agreement. The Group s derivative transactions that are not transacted on an exchange are entered into under International Swaps and Derivatives Association (ISDA) 2002 Master Agreements. In general, under such agreements the amounts owed by each counterparty that are due on a single day in respect of all transactions outstanding in the same currency under the agreement are aggregated into a single net amount being payable by one party to the other. In certain circumstances for example, when a credit event such as a default occurs, the right of set-off are set aside and the amounts settled gross unless the nondefaulting party chooses to continue the set-off arrangement. As such, the above master netting agreements do not meet the criteria for offsetting in the statement of financial position. The gross amounts of financial assets and financial liabilities and their net amounts as presented in the statement of financial position that are disclosed in the tables below are measured in the statement of financial position at fair value. Financial assets and financial liabilities subject to offsetting and enforceable master netting arrangements Gross amounts of recognised financial instruments included in the statement of financial position Related amounts that are not offset Net amounts US$ 000 US$ 000 US$ 000 Group 31 December 2015 Financial assets Oil physical derivative instruments 26,809 26,809 Oil paper derivative instruments 13,544 (1,875) 11,669 Total 40,353 (1,875) 38,478 Financial liabilities Oil physical derivative instruments 34,860 34,860 Oil paper derivative instruments 1,959 (1,875) 84 Total 36,819 (1,875) 34,944

157 Annual Report Notes to the Financial Statements Year ended 31 December FINANCIAL INSTRUMENTS (CONT D) Offsetting financial assets and financial liabilities (cont d) Financial assets and financial liabilities subject to offsetting and enforceable master netting arrangements (cont d) Gross amounts of recognised financial instruments included in the statement of financial position Related amounts that are not offset Net amounts US$ 000 US$ 000 US$ 000 Group 31 December 2014 Financial assets Oil physical derivative instruments 56,245 56,245 Oil paper derivative instruments 77,847 (42,088) 35,759 Total 134,092 (42,088) 92,004 Financial liabilities Oil physical derivative instruments 25,101 25,101 Oil paper derivative instruments 73,437 (42,088) 31,349 Total 98,538 (42,088) 56,450 Company 31 December 2015 Financial assets Oil physical derivative instruments 26,748 26,748 Oil paper derivative instruments 13,521 (1,875) 11,646 Total 40,269 (1,875) 38,394 Financial liabilities Oil physical derivative instruments 34,860 34,860 Oil paper derivative instruments 1,949 (1,875) 74 Total 36,809 (1,875) 34, December 2014 Financial assets Oil physical derivative instruments 54,814 54,814 Oil paper derivative instruments 78,667 (42,088) 36,579 Total 133,481 (42,088) 91,393 Financial liabilities Oil physical derivative instruments 25,101 25,101 Oil paper derivative instruments 73,170 (42,088) 31,082 Total 98,271 (42,088) 56,183

158 156 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December REVENUE Group US$ 000 US$ 000 Revenue from middle distillates 7,009,516 13,474,524 Revenue from other oil products 1,977,971 3,586,507 8,987,487 17,061,031 Included in revenue is net loss of US$10,320,000 (2014: net loss of US$102,830,000) recognised in relation to derivative financial instruments. 19 PROFIT FOR THE YEAR The following items have been included in arriving at profit for the year: Group US$ 000 US$ 000 Other income Interest income Foreign exchange (loss)/gain net (750) 818 Others (240) 1,168 Audit fees paid and payable to: - auditor of the Company (218) (240) - other auditors (160) (191) Non-audit fees paid and payable to auditor of the Company (38) (23) Reversal/(Allowance) for impairment loss on doubtful debts net 1,588 (2,741) Depreciation of property, plant and equipment (827) (811) Amortisation of intangible assets (731) (687) Operating lease expense (30,185) (31,253) Staff costs (14,133) (10,469) Contributions to defined contribution plans, included in staff costs (579) (273)

159 Annual Report Notes to the Financial Statements Year ended 31 December FINANCE COSTS Group US$ 000 US$ 000 Bank charges 789 1,527 Interest expenses 251 1,548 1,040 3, TAX EXPENSE Group US$ 000 US$ 000 Current tax expense Current year Deferred tax expense Origination and reversal of temporary differences 1, Recognition of previously unrecognised tax losses (1,245) (1,338) 91 (490) Withholding tax expense 1,862 1,757 Total tax expense 2,316 1,869 Reconciliation of effective tax rate Profit before tax 63,597 51,029 Tax using Singapore tax rate of 17% (2014: 17%) 10,811 8,675 Effects of tax rates in foreign jurisdictions Tax effects of revenue at concessionary tax rate (2,308) (1,023) Effects of results of associates presented net of tax (7,190) (7,343) Expenses not deductible for tax purposes 338 1,117 Recognition of previously unrecognised tax losses (1,245) (1,338) Withholding tax expense 1,862 1,757 2,316 1,869 The Company was granted concessionary rate of tax under the Global Trader Programme ( GTP ), which was renewed for a period of 5 years from 1 August 2010 to 31 July The GTP incentive had been extended for a period of 5 years from 1 August Under the GTP, income derived from qualifying trading transactions of approved products by the Company is taxed at the concessionary rate of 5% instead of the normal statutory rate of 17%. This incentive is granted subject to the achievement of certain business volume and other terms and conditions.

160 158 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December EARNINGS PER SHARE Basic earnings per share At the reporting date, the calculation of basic earnings per share was based on the profit attributable to ordinary shareholders of US$61,281,000 (2014: US$49,160,000), and a weighted average number of ordinary shares outstanding of 860,184,000 (2014: 860,184,000). Profit attributable to ordinary shareholders US$ 000 US$ 000 Basic and diluted earnings per share is based on: Net profit attributable to ordinary shareholders 61,281 49,160 Weighted average number of ordinary shares (diluted) Number of shares Number of shares ( 000) ( 000) Issued ordinary shares at 1 January* 860, ,821 Effect of bonus shares issue** 143,363 Weighted average number of ordinary shares (diluted) for the year ended 31 December 860, ,184 * Excludes 6,000,000 ordinary shares held as treasury shares. ** The basic and diluted earnings per share are adjusted for transactions that adjust the number of shares without a corresponding change in resources. The effects of the bonus shares, issued on 10 March 2014 have been included in the basic and diluted earnings per share calculation. 23 OPERATING SEGMENTS The Group has three reportable segments, as described below, which are the Group s strategic business units. The strategic business units offer different products and services, and are managed separately. For each of the strategic business units, the Group s CEO (the chief operating decision maker) reviews internal management reports on at least a quarterly basis. The following summary describes the operations in each of the Group s reportable segments: Middle distillates: Jet fuel and gas oil supply and trading Other oil products: Fuel oil and petrochemicals products supply and trading Investments in oil-related assets: Investments in oil-related assets through the Group s holdings in associates

161 Annual Report Notes to the Financial Statements Year ended 31 December OPERATING SEGMENTS (CONT D) Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before tax, as included in the internal management reports that are reviewed by the Group s CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Middle distillates Other oil products Investment in oil-related assets Total US$ 000 US$ 000 US$ 000 US$ Revenue 7,009,516 1,977,971 8,987,487 Gross profit/(loss) 36,890 (1,446) 35,444 Other administrative/operating expenses (7,487) (2,082) (1,736) (11,305) Depreciation and amortisation (1,558) (1,558) Foreign exchange loss (750) (750) Interest income Other income Finance costs (729) (311) (1,040) Share of profits of associates (net of tax) 42,296 42,296 Tax expense (353) (1,963) (2,316) Reportable segment profit/(loss) after tax 26,523 (3,839) 38,597 61,281 Reportable segment total assets 561,650 22, , , Revenue 13,474,524 3,586,507 17,061,031 Gross profit/(loss) 32,156 (4,759) 27,397 Other administrative/operating expenses (9,118) (3,596) (3,443) (16,157) Depreciation and amortisation (1,498) (1,498) Foreign exchange gain Interest income Other income Finance costs (1,683) (1,392) (3,075) Share of profits of associates (net of tax) 43,194 43,194 Tax expense (450) (1,419) (1,869) Reportable segment profit/(loss) after tax 20,575 (9,747) 38,332 49,160 Reportable segment total assets 955, , ,326 1,378,715

162 160 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December OPERATING SEGMENTS (CONT D) Geographical segments The People s Republic of China is a major market for trading in aviation oil and petroleum products. The Group also operates in other regions including Singapore. In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of the revenue transacted. Segment assets are based on the geographical location of the assets. Geographical information Revenue Non-current assets** US$ 000 US$ People s Republic of China 4,715, ,707 South Korea 66,994 30,935 United States of America 526, Hong Kong 924,042 4,263 Indonesia 314,085 Singapore 1,501,618 6,759 Malaysia 64,460 Other countries 874,715 8,987, , People s Republic of China 8,742, ,708 South Korea 73,521 31,626 United States of America 365, Hong Kong 1,909,991 5,101 Indonesia 1,532,431 Singapore 2,558,258 7,914 Malaysia 123,232 Other countries 1,754,692 17,061, ,302 ** Excludes deferred tax assets Major customers Revenue from two customers (2014: two customers) of the middle distillates segment for the supply of jet fuel amounting to approximately US$4,072,321,000 (2014: US$6,444,596,000), represents 45% (2014: 38%) of the Group s total revenue.

163 Annual Report Notes to the Financial Statements Year ended 31 December FINANCIAL RISK MANAGEMENT Overview The Company has exposure to the following risks from its use of financial instruments: credit risk liquidity risk interest rate risk foreign currency risk market risk commodity price risk This note presents information about the Company s exposure to each of the above risks and the Company s objectives, policies and processes for measuring and managing risk. Additional quantitative disclosures are included throughout these financial statements. Risk management framework The Board of Directors has overall responsibility for the establishment and oversight of the Group s risk management framework. The Board has established the Risk Management Committee, which is responsible for developing and monitoring the Group s risk management policies. The committee reports regularly to the Board of Directors on its activities. The Group s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment which all employees understand their roles and obligations. The Risk Management Committee oversees how management monitors compliance with the Group s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group s receivables from its customers and financial assets. The Group has procedures in place to manage credit risk and exposure to such risk is monitored on an ongoing basis. Trade and other receivables The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. This allowance is a specific loss component that relates to individually significant exposures. The allowance account in respect of trade and other receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible. At that point, the financial asset is considered irrecoverable and the amount charged to the allowance account is written off against the carrying amount of the impaired financial asset.

164 162 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December FINANCIAL RISK MANAGEMENT (CONT D) Credit risk (cont d) Trade and other receivables (cont d) Cash and fixed deposits are placed with banks and financial institutions which are regulated. At 31 December 2015, there was no significant concentration of credit risk except for amounts receivable due from 2 (2014: 2) major customers amounting to US$25,523,000 (2014: US$148,880,000) which accounted for 26% (2014: 37%) of the Group s gross trade receivables. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position. Guarantees The maximum exposure of the Company in respect of the intra-group financial guarantee (see note 14 and 15) at the end of the reporting period is if the subsidiary defaulted on the utilised facilities extended by the bank and trading counterparties amounting to US$ Nil (2014: US$3,200,000) at 31 December Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivery of cash or another financial asset. The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group s operations and to mitigate the effects of fluctuations in cash flows. Typically, the Group ensures that it has sufficient cash on demand to meet expected operational expenses, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition, the Group manages its liquidity risk by maintaining adequate lines of credit. Interest rate risk It is the Group s policy to obtain the most favourable interest rates available without increasing its foreign currency exposure. Surplus funds are placed with reputable banks to earn interest income. As the Group s interest bearing financial assets and liabilities are short term in nature, any future variations in interest rates will not have a material impact on the results of the Group. Foreign currency risk The Group is exposed to foreign currency risk on sales and purchases that are denominated in currencies other than the respective functional currencies of Group entities. The currencies giving rise to this foreign currency risk are primarily the Singapore dollar, the Chinese renminbi and Hong Kong dollar. Currently, the Group does not hedge its foreign currency exposure. The Group monitors its foreign currency exposures on an on-going basis and ensures that the net exposure is kept to an acceptable level. The Group is also exposed to currency translation risk on its net investments in foreign operations. Such exposures are reviewed and monitored on a regular basis.

165 Annual Report Notes to the Financial Statements Year ended 31 December FINANCIAL RISK MANAGEMENT (CONT D) Market risk Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates, will affect the Group s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. The Group buys and sells derivatives in order to manage market risk. All such transactions are carried out within the guidelines set by the Risk Management Committee. Commodity price risk The Group manages its costs of purchase and sales of oil commodities, using commodity paper derivative instruments. Management manages its commodity price risk using a suite of risk management tools which include marginal value at risk limits and hypothetical stress-tests of various scenarios. These risk management tools were designed by management, reviewed by the Risk Management Committee, and approved by the Board of Directors. The Group enters into commodity paper derivative instruments, in which it agrees to exchange the difference between the fixed and floating prices, calculated by reference to an agreed-upon principal quantity, with its counterparties. The commodity paper derivative instruments entered into commit the Group to settle these instruments at various settlement dates. Sensitivity analysis A change of 10% in oil forward price at the reporting date would have increased/(decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis as the financial year ending 31 December Profit or loss 10% increase 10% decrease US$ 000 US$ Oil physical and paper derivative instruments (5,784) 5, Oil physical and paper derivative instruments 5,994 (5,994) The Group considers holding oil inventory as part of their overall trading strategy. An increase of 10% in the fair value of oil inventory would have increased profit or loss by US$5,170,000 (2014: US$3,421,000). A 10% weakening of the fair value of oil inventory would have an equal but opposite effect on oil inventory. The above sensitivity analysis is hypothetical and should not be predictive of the Group s future performance as the physical inventory volume and derivative positions change daily and are not static. Estimation of fair values The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments of the Group and the Company.

166 164 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December FINANCIAL RISK MANAGEMENT (CONT D) Estimation of fair values (cont d) Derivative financial instruments The fair values of oil physical and paper derivative instruments were determined based on price indices. Other financial assets and liabilities The carrying amounts of financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents, and trade and other payables) approximate their fair values because of the short period to maturity. All other financial assets and liabilities are discounted to determine their fair values. 25 CONTINGENT LIABILITIES Fishery damage compensation In 2014, OKYC made enhancements to the shipping berth within its storage terminal site which affected the fisherman operating near to the storage terminal site. OKYC had entered into settlement agreements with the fishermen to pay them compensation sums as determined by the local government. Based on the terms of the settlement, the compensation sums were to be determined by an independent appraiser. As at 31 December 2014, the compensation amount was still under evaluation by an independent appraiser and as such could not be estimated reliably. During the year, the fishery compensation amount of US$3.6 million was finalised by the independent appraisers and has been fully paid by OKYC. Appraisers fees of US$2.3 million was incurred by OKYC in relation to the claim above. 26 OPERATING LEASES Leases as lessee At the reporting date, non-cancellable operating lease rentals are payable as follows: Group Company US$ 000 US$ 000 US$ 000 US$ 000 Within one year 13,760 25,353 13,574 24,956 Between one and five years 11,746 11,556 13,760 37,099 13,574 36,512 The Company leases an office under operating lease. The lease typically runs for a period of 5 years, with an option to renew the lease after that date. Lease payments are increased every 3 years to reflect market rentals based on changes in a local price index. In addition, the Company leases storage facilities and time charter oil vessels for periods ranging from 6 months to 3 years, with options to renew the leases at the end of the respective lease term. Subsidiaries lease office premises under operating leases. The average lease term is approximately one year, with options to renew the leases after that date.

167 Annual Report Notes to the Financial Statements Year ended 31 December RELATED PARTIES Key management personnel compensation Key management personnel compensation comprises: Group US$ 000 US$ 000 Directors fees Directors remuneration Key executive officers remuneration 1,403 2,146 2,209 3,218 The key management personnel compensation for the financial years ended 31 December 2015 and 2014 were made up of short-term employee benefits. The immediate and ultimate holding company, CNAF, is a state-owned enterprise established in the PRC. In accordance with FRS 24 Related Party Disclosures, government-related entities and their subsidiaries, apart from entities under CNAF, which the PRC government has control, joint control or significant influence over are also considered as related parties of the Group. For the purpose of the related party transactions disclosures, the Group applies the exemption on disclosure of related parties transactions as allowed under FRS 24. The Group assessed that these transactions with government-related entities were carried out based on market terms in the ordinary course of business. The Group s transactions with government-related entities include sales and purchases of oil commodities, banking fees and operating lease expenses. For the financial year ended 31 December 2015, the Group s sales and purchases of oil commodities with government-related entities account for approximately 31% (2014: 34%) of the Group s total sales and 61% (2014: 48%) of the Group s total purchases. During the year, approximately 20% (2014: 15%) of the Group s banking fees and 7% (2014: 7%) of the Group s operating expenses were transacted with government-related entities.

168 166 China Aviation Oil (Singapore) Corporation Ltd Notes to the Financial Statements Year ended 31 December RELATED PARTIES (CONT D) Other than those as disclosed elsewhere in the financial statements, the Group had the following significant transactions with related parties: Group US$ 000 US$ 000 Related corporation of a corporate shareholder Sale of jet fuel 562,812 Sale of fuel oil 11,812 Sale of gas oil 64,793 Purchase of jet fuel 60, ,312 Purchase of fuel oil 52,097 Purchase of petrochem 6,904 Related parties under CNAF: Related corporations Sale of jet fuel 2,353,750 3,793,869 Sale of aviation gasoline 2, Purchase of jet fuel 493, ,173 Associate Sale of jet fuel 1,718,571 2,650,727 Purchase of jet fuel 52, ,550 Other related party: Associate Storage tank rental expense 17,047 9, ACCOUNTING ESTIMATES AND JUDGEMENT IN APPLYING ACCOUNTING POLICIES The Group makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group believes the following critical accounting policies involved the most significant judgements and estimates used in the preparation of the financial statements. Key source of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below:

169 Annual Report Notes to the Financial Statements Year ended 31 December ACCOUNTING ESTIMATES AND JUDGEMENT IN APPLYING ACCOUNTING POLICIES (CONT D) Key source of estimation uncertainty (cont d) Valuation of trade receivables At each reporting date, the Group evaluates whether there is any objective evidence that trade receivables are impaired and determine the amount of impairment loss as a result of the inability of the debtors to make required payments. The Group bases the estimates on the ageing of the trade receivables balance, credit-worthiness of the debtors and historical write-off experience. If the financial conditions of the debtors were to deteriorate, actual write-offs would be higher than estimated. Valuation of investment in associates and joint venture The Group evaluates whether there are any indicators of impairment in the investment in associates and joint venture at each reporting date. If there are indicators of impairment, management performs an evaluation of the investment s recoverable amount. The recoverable amount is based on the higher of value-in-use or fair value less cost to sell. Value-in-use is estimated based on management s forecast of future cash flows discounted to present value using the pre-tax discount rate. The fair value less cost to sell requires an estimate of the market value of the investments. Significant estimates and assumptions are made in determining value-in-use and fair value less cost to sell. Taxes Significant judgement is required in determining the capital allowances, taxability of certain income and deductibility of certain expenses during the estimation of the provision for taxes and deferred tax liabilities. The Company exercises significant judgement to determine the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. Fair value of derivative financial instruments The Company holds derivative financial instruments to hedge the changes in oil commodity prices. The Company has not applied hedge accounting to derivative financial instruments that economically hedge the exposure of the changes in oil commodity prices. All outstanding derivative financial instruments are recognised initially at fair value. Subsequent to initial recognition, they are remeasured at fair value. The gain or loss on remeasurement to fair value is recognised immediately in the income statement as revenue. The fair value of the derivative financial instruments is based on the price index, Platts. The use of a different price index may impact the Company s estimate of the fair value of its derivative financial instruments. Critical judgement made in applying accounting policies Classification of investment in associates and joint venture In the prior year, the Company assessed the terms and conditions of the shareholder s agreement entered for each of its investments in associates and joint venture. The Company made critical judgement over its ability to exercise influence or control over its investees. The Company s judgement included considerations of the influence or joint control exercised at the board of the respective investees, and their rights and obligations arising from board reserve matters as agreed with the other shareholders.

170 168 China Aviation Oil (Singapore) Corporation Ltd Supplementary Information INTERESTED PERSON TRANSACTIONS Aggregate value of interested person transactions excluding transactions conducted under shareholders mandate pursuant to Rule 920 of the SGX Listing Manual Aggregate value of interested person transactions conducted under shareholders mandate pursuant to Rule 920 of the SGX Listing Manual US$ 000 US$ 000 US$ 000 US$ 000 Sales revenue from related corporations - - 2,355,777 3,794,788 Sales revenue from related corporation of a corporate shareholder , ,605 Purchases from related corporations , ,173 Purchases from related corporation of a corporate shareholder , ,313 Services rendered from related corporation of a corporate shareholder Gain/(Loss) from trading of derivative financial instruments with related corporation of a corporate shareholder - - (40) 20 Supply chain services rendered from related corporation ,703 Supply chain services rendered from related corporation of a corporate shareholder Transportation revenue earned by associate from related corporations - - 9,429 8,725 Purchases by associate from related corporation Loan granted by associate to related corporation - - 9,847 5,802 Principal deposited with interested person ,698 34,784 Interest earned on principal deposited with interested person Interest income earned by associates from related corporations Loan granted to joint venture - - 3,080 - Interest earned on loan granted to joint venture Purchase from joint venture

171 Annual Report Statistics of Shareholdings As at 7 March 2016 Number of Issued Shares : 866,183,628 Number of Issued Shares (excluding Treasury Shares) : 860,183,628 ordinary shares Number/Percentage of Treasury Shares : 6,000,000 (0.69%) Class of Shares : Ordinary Shares Voting Rights (excluding Treasury Shares) : 1 vote per share Based on information available to the Company as at 7 March 2016, 28.53% (1) 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 has been complied with. Note: (1) Percentage is calculated on the total number of 860,183,628 issued shares excluding treasury shares. DISTRIBUTION OF SHAREHOLDINGS SIZE OF SHAREHOLDINGS NO. OF SHAREHOLDERS % NO. OF SHARES % , ,000 2, ,207, ,001-10,000 7, ,944, ,001-1,000,000 4, ,630, ,000,001 AND ABOVE ,379, TOTAL 14, ,183, TWENTY LARGEST SHAREHOLDERS NO. NAME NO. OF SHARES % 1 DBS VICKERS SECURITIES (SINGAPORE) PTE LTD 443,104, BP INVESTMENTS ASIA LIMITED 173,476, DBS NOMINEES (PRIVATE) LIMITED 9,554, CITIBANK NOMINEES SINGAPORE PTE LTD 6,729, RAFFLES NOMINEES (PTE) LIMITED 5,848, HSBC (SINGAPORE) NOMINEES PTE LTD 5,580, UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED 5,213, OCBC SECURITIES PRIVATE LIMITED 5,096, UOB KAY HIAN PRIVATE LIMITED 4,659, LEE FOOK CHOY 3,000, DB NOMINEES (SINGAPORE) PTE LTD 2,862, BANK OF SINGAPORE NOMINEES PTE. LTD. 2,637, PHILLIP SECURITIES PTE LTD 2,440, OCBC NOMINEES SINGAPORE PRIVATE LIMITED 2,360, CIMB SECURITIES (SINGAPORE) PTE. LTD. 2,243, CHNG GIM HUAT 1,800, KANG HIAN SOON 1,398, LAM YEW CHONG 1,213, MAYBANK KIM ENG SECURITIES PTE. LTD. 1,159, GOH GEOK LOO 901, TOTAL 681,280, SUBSTANTIAL ORDINARY SHAREHOLDERS (As shown in the Register of Substantial Shareholders as at 7 March 2016) NO. OF SHARES NO. NAME DIRECT INTEREST DEEMED INTEREST % 1 China National Aviation Fuel Group Corporation - 441,332,912* BP Investments Asia Limited 173,476, * China National Aviation Fuel Group Corporation is deemed to have an interest in 441,332,912 shares of CAO held by DBS Vickers Securities (Singapore) Pte Ltd.

172 170 China Aviation Oil (Singapore) Corporation Ltd Notice of Annual General Meeting CHINA AVIATION OIL (SINGAPORE) CORPORATION LTD Incorporated in the Republic of Singapore Company Registration No Z NOTICE IS HEREBY GIVEN that the 22 nd Annual General Meeting of the Company will be held at NTUC Centre, 1 Marina Boulevard, Level 7, Auditorium, Singapore on Wednesday, 20 April 2016 at 3:00 p.m. for the following purposes: AS ORDINARY BUSINESS 1. To receive and adopt the Directors statement and the audited financial statements for the financial year ended 31 December 2015 together with the auditors report thereon. (Resolution 1) 2. To declare a first and final (one-tier, tax exempt) dividend of S$0.03 per ordinary share for the financial year ended 31 December (Resolution 2) 3. To approve Directors Fees of S$638,839 for the financial year ended 31 December 2015 (2014: S$638,451). (Resolution 3) 4. To re-elect the following Directors, each of whom will retire by rotation pursuant to Article 91 of the Constitution of the Company and who, being eligible, will offer themselves for re-election:- Dr Zhao Shousen Mr Meng Fanqiu (Resolution 4) (Resolution 5) 5. To re-elect the following Directors, each of whom will retire in accordance with Article 97 of the Constitution of the Company and who, being eligible, will offer themselves for re-election:- Mr Lin Wanli Ms Bella Young Pit Lai Mr Felipe Arbelaez (Resolution 6) (Resolution 7) (Resolution 8) AS SPECIAL BUSINESS To consider and, if thought fit, to pass the following resolutions as Ordinary Resolutions: 6. That pursuant to Section 161 of the Companies Act, Cap. 50 and the Listing Manual of the Singapore Exchange Securities Trading Limited ( SGX-ST ) authority be and is hereby given to the Directors of the Company 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 fit; and (b) (notwithstanding that the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance to any Instrument made or granted by the Directors while this Resolution was in force,

173 Annual Report Notice of Annual General Meeting 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% of the issued shares (excluding treasury shares) in the 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 15% of the issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with subparagraph (2) below); (2) (subject to such manner of calculation as may be prescribed by the 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 shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution, after adjusting for: (a) (b) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding at the time of the passing of this Resolution; and 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 Constitution 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 9) 7. That: (a) (b) (c) approval be and is hereby given for the renewal of, and amendments to, the shareholders general mandate (which was last renewed at the annual general meeting of the Company held on 22 April 2015) for the Company, its subsidiaries and associated companies which fall within the definition of entities at risk under Chapter 9 of the Listing Manual or any of them to enter into any of the transactions falling within the categories of interested person transactions set out in Annex II to the Company s Letter to Shareholders dated 24 March 2016 (the Letter ), with any party who is of the class or classes of interested persons described in Annex II to the Letter, provided that such transactions are made on normal commercial terms and are not prejudicial to the Company and its minority shareholders, and are entered into in accordance with the review procedures for interested person transactions as set out in Annex II to the Letter (such shareholders general mandate, as amended, hereinafter called the IPT Mandate ); the IPT Mandate shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next annual general meeting of the Company or until the date on which the next annual general meeting of the Company is required by law to be held, whichever is the earlier; the audit committee of the Company (comprising Independent Directors Mr Ang Swee Tian, Dr Wang Kai Yuen and Mr Li Runsheng, and Non-Independent, Non-Executive Directors Dr Zhao Shousen and Mr Felipe Arbelaez as at the date of the Letter) be and is hereby authorised to take such action as it deems proper in respect of the procedures and/or to modify or implement such procedures as may be necessary to take into consideration any amendment to Chapter 9 of the Listing Manual which may be prescribed by SGX-ST from time to time; and

174 172 China Aviation Oil (Singapore) Corporation Ltd Notice of Annual General Meeting (d) 8. That: (a) the directors of the Company (the Directors ) and each of them be and are hereby authorised and empowered to complete and to do all such other acts and things as they may consider necessary, desirable or expedient in the interests of the Company in connection with or for the purposes of giving full effect to the IPT Mandate. (Resolution 10) for the purposes of the Companies Act (Chapter 50 of Singapore) (the Companies Act ), the exercise by the Directors of all the powers of the Company to purchase or otherwise acquire fully paid issued ordinary shares in the capital of the Company (the Shares ) not exceeding in aggregate the Maximum Limit (as hereafter defined), at such price or prices as may be determined by the Directors from time to time up to the Maximum Price (as hereafter defined), whether by way of: (i) (ii) on-market purchase(s) on the SGX-ST and/or any other stock exchange on which the Shares may for the time being be listed and quoted (the Other Exchange ); and/or off-market purchase(s) if effected otherwise than on the SGX-ST or, as the case may be, Other Exchange in accordance with any equal access scheme(s) as may be determined or formulated by the Directors as they consider fit, which scheme(s) shall satisfy all the conditions prescribed by the Companies Act; and otherwise in accordance with all other laws, regulations and rules of the SGX-ST or, as the case may be, Other Exchange as may for the time being be applicable, be and is hereby authorised and approved generally and unconditionally (the Share Purchase Mandate ); (b) unless varied or revoked by the Company in a general meeting, the authority conferred on the Directors pursuant to the Share Purchase Mandate may be exercised by the Directors at any time and from time to time during the period commencing from the date of the passing of this Resolution and expiring on the earlier of: (i) (ii) the date on which the next annual general meeting of the Company is held; and the date by which the next annual general meeting of the Company is required by law to be held; and (c) the Directors and each of them be and are hereby authorised and empowered to complete and to do all such other acts and things as they may consider necessary, desirable or expedient in the interests of the Company in connection with or for the purposes of giving full effect to the Share Purchase Mandate. For the purposes of this Resolution: Average Closing Price means the average of the closing market prices of the Shares over the last five (5) market days, on which transactions in the Shares on the SGX-ST were recorded, before the day on which a market purchase was made by the Company or, as the case may be, the date of the announcement of the offer pursuant to an off-market purchase, and deemed to be adjusted in accordance with the listing rules of the SGX-ST for any corporate action which occurs after the relevant period of five (5) market days; Maximum Limit means that number of issued Shares representing ten per cent. (10%) of the total number of Shares excluding treasury shares as at the last annual general meeting or as at the date of the passing of this Resolution (whichever is the higher); and Maximum Price, in relation to a Share to be purchased or acquired, means the purchase price (excluding brokerage, stamp duties, commission, applicable goods and services tax and other related expenses) which shall not exceed:

175 Annual Report Notice of Annual General Meeting (a) (b) in the case of an on-market purchase of a Share, one hundred and five per cent. (105%) of the Average Closing Price of the Shares; and in the case of an off-market purchase of a Share pursuant to an equal access scheme, one hundred and ten per cent. (110%) of the Average Closing Price of the Shares. (Resolution 11) 9. That : (a) (b) Deloitte & Touche LLP be and is hereby appointed as auditors of the Company in place of KPMG LLP and to hold office until the conclusion of the next annual general meeting of the Company and the Directors be authorized to fix the terms of their remuneration (the Proposed Change of Auditors ). The Directors and each of them be and are hereby authorized and empowered to complete and to do all such acts and things (including without limitation, executing all such documents as may be required) as they may consider necessary, desirable or expedient in the interests of the Company in connection with or for the purposes of giving full effect to the Proposed Change of Auditors. (Resolution 12) 10. To transact any other ordinary business which may properly be transacted at an annual general meeting. BY ORDER OF THE BOARD Doreen Nah Company Secretary Singapore, 24 March 2016 NOTES: 1. Except for a member who is a Relevant Intermediary as defined under Section 181(6) of the Companies Act, a member is entitled to appoint not more than two (2) proxies to attend, speak and vote at the meeting. Where a member appoints more than one (1) proxy, the proportion of his concerned shareholding to be represented by each proxy shall be specified in the proxy form. 2. Pursuant to Section 181(1C) of the Companies Act, a member who is a Relevant Intermediary is entitled to appoint more than two (2) proxies to attend, speak and vote at the meeting, but each proxy must be appointed to exercise the rights attached to a different share or shares held by such member. Where such member appoints more than two (2) proxies, the number and class of shares in relation to which each proxy has been appointed shall be specified in the proxy form. 3. A proxy need not be a member of the Company. 4. 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 common seal or under the hand of its attorney or a duly authorised officer. 5. The instrument appointing a proxy or proxies must be deposited at the Company s registered office at 8 Temasek Boulevard, #31-02, Suntec Tower Three, Singapore not later than 3.00 p.m. on 18 April 2016.

176 174 China Aviation Oil (Singapore) Corporation Ltd Notice of Annual General Meeting EXPLANATORY NOTES: Resolution 4 Resolution 5 Resolution 6 Resolution 7 Resolution 8 Resolution 9 Resolution 10 Resolution 11 Dr Zhao Shousen, will upon re-appointment, continue as Deputy Chairman of the Audit Committee and a member of the Risk Management Committee. He is considered a Non-Executive, Non-Independent Director. Mr Meng Fanqiu will upon re-appointment, continue as Chief Executive Officer/Executive Director. Mr Lin Wanli will upon re-appointment, continue as Chairman of the Board. He is considered Non-Executive, Non-Independent Director. Ms Bella Young Pit Lai will upon re-appointment, continue as a member of the Nominating Committee and the Remuneration Committee. She is considered Non-Executive, Non-Independent Director. Mr Felipe Arbelaez will upon re-appointment, continue as Chairman of the Risk Management Committee and a member of the Audit Committee. He is considered Non-Executive, Non-Independent Director. Resolution 9 is to authorise the Directors of the Company, from the date of the above annual general meeting until the next annual general meeting, to issue shares in the Company. The aggregate number of shares which the Directors may issue under this Resolution shall not exceed fifty per cent (50%) of the issued shares (excluding treasury shares) in the capital of the Company, of which the aggregate number of shares to be issued other than on a pro-rata basis to existing shareholders shall not exceed fifteen per cent (15%) of the issued shares (excluding treasury shares) in the capital of the Company. The percentage of issued share capital is based on the Company s issued shares (excluding treasury shares) in the capital of the Company at the time this proposed Ordinary Resolution is passed, after adjusting for (a) new shares arising from the conversion of convertible securities or share options on issue at the time this proposed Ordinary Resolution is passed; and (b) any subsequent consolidation or subdivision of shares. Resolution 10 is to approve the amendment of, and the renewal of the mandate to permit the Company, its subsidiaries and associated companies that are entities at risk (as that term is used in Chapter 9 of the Listing Manual of the SGX-ST), or any of them, to enter into certain types of interested person transactions with certain classes of interested persons as described in the Appendix to the Notice of Annual General Meeting of the Company dated 24 March Resolution 11 is to renew the mandate to permit the Company to purchase or acquire issued ordinary shares in the capital of the Company on the terms and subject to the conditions of the Resolution. The Company may use internal sources of funds, or a combination of internal resources and external borrowings, to finance the purchase or acquisition of its ordinary shares. The amount of funding required for the Company to purchase or acquire its ordinary shares and the impact on the Company s financial position cannot be ascertained as at the date of this Notice of Annual General Meeting as these will depend on the number of ordinary shares purchased or acquired and the price at which such ordinary shares were purchased or acquired and whether the ordinary shares purchased or acquired are held in treasury or cancelled. The Company will not rely on external borrowings to finance purchases or acquisitions of its ordinary shares to such extent that it would materially affect the financial position, working capital requirements or investment ability of the CAO Group. Resolution 12. Resolution 12 is to approve the appointment of Deloitte & Touche LLP as the auditors of the Company in place of KPMG LLP, and to authorize the Directors to fix the terms of their remuneration. Please refer to the Letter to Shareholders dated 24 March 2016 for more details.

177 Annual Report Notice of Annual General Meeting ARTICLE 91 OF THE CONSTITUTION OF THE COMPANY Every Director shall retire from office once every three (3) years and for this purpose, at each annual general meeting, one-third of the Directors for the time being (or, if their number is not a multiple of three, the number nearest to but not less than one-third) shall retire from office by rotation. ARTICLE 97 OF THE CONSTITUTION OF THE COMPANY The Company may by ordinary resolution appoint any person to be a Director either to fill a casual vacancy or as an additional Director. Without prejudice thereto, the Directors shall have power at any time so to do, but so that the total number of Directors shall not thereby exceed the maximum number (if any) fixed by or in accordance with these presents. Any person so appointed by the Directors shall hold office until the next annual general meeting and shall then be eligible for re-election, but shall not be taken into account in determining the number of Directors who are to retire by rotation at such meeting. PERSONAL DATA PRIVACY: By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the 22 nd Annual General Meeting of the Company ( 22 nd AGM ) and/or any adjournment thereof, a member of the Company (i) consents to the collection, use and disclosure of the member s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the 22 nd AGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the 22 nd AGM (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/ or guidelines (collectively, the Purposes ), and (ii) warrants that where the member discloses the personal data of the member s proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies) and/ or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/ or representative(s) for the Purposes. NOTICE OF BOOKS CLOSURE DATE AND PAYMENT DATE FOR FIRST AND FINAL DIVIDEND (ONE-TIER, TAX- EXEMPT) ( DIVIDEND ) The Company gives notice that, subject to the approval of the shareholders being obtained for the Dividend at the 22 nd Annual General Meeting of the Company to be held on 20 April 2016, the Register of Members and the Transfer Books of the Company will be closed on 4 May 2016 for the preparation of dividend warrants. The Register of Members and the Transfer Books will re-open on 5 May Duly completed registered transfers of ordinary shares in the capital of the Company received by the Company s Share Registrar, Boardroom Corporate & Advisory Services Pte Ltd at 50 Raffles Place, Singapore Land Tower, #32-01, Singapore before 5.00 p.m. on 3 May 2016, will be registered in the Register of Members and the Transfer Books of the Company to determine shareholders entitlements to the Dividend. In respect of ordinary shares in securities accounts with The Central Depository (Pte) Limited ( CDP ), the Dividend will be paid by the Company to CDP which will, in turn, distribute the entitlements to the Dividend to CDP account-holders in accordance with its normal practice. The Dividend, if approved by shareholders, will be paid on 17 May 2016.

178 This page has been intentionally left blank

179 CHINA AVIATION OIL (SINGAPORE) CORPORATION LTD Incorporated in the Republic of Singapore Company Registration No Z PROXY FORM IMPORTANT: 1. A relevant intermediary may appoint more than two (2) proxies to attend the Meeting and vote. 2. This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or is purported to be used by them. 3. Please refer to Note 2(b) of the Notes to the Proxy Form. I/We, of being a member/members of China Aviation Oil (Singapore) Corporation Ltd (the Company ), hereby appoint: Name NRIC/Passport No. Proportion of Shareholdings Address Number of Shares % and/or (delete as appropriate) Name NRIC/Passport No. Proportion of Shareholdings Number of Shares % Address or failing him/her/them, the Chairman of the Annual General Meeting (the Meeting ) 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 Meeting of the Company, to be held at NTUC Centre, 1 Marina Boulevard, Level 7, Auditorium, Singapore on Wednesday, 20 April 2016 at 3:00 p.m., and at any adjournment thereof. I/ We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Meeting as indicated hereunder. If no specific directions as to voting are given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the Meeting. (Please indicate your vote For or Against with a tick [ ] within the box provided.) No. Resolutions relating to: For Against 1 To adopt Directors Statement and Audited Financial Statements and Auditors Report thereon 2 To declare a First and Final (One-Tier, Tax Exempt) Dividend 3 To approve Directors Fees for the financial year ended 31 December To re-elect Dr Zhao Shousen as a Director retiring under Article 91 5 To re-elect Mr Meng Fanqiu as a Director retiring under Article 91 6 To re-elect Mr Lin Wanli as a Director retiring under Article 97 7 To re-elect Ms Bella Young Pit Lai retiring under Article 97 8 To re-elect Mr Felipe Arbelaez as a Director retiring under Article 97 Special Business 9 To authorise Directors to issue shares pursuant to Section 161 of the Companies Act, Cap. 50 and the Listing Manual of the Singapore Exchange Securities Trading Limited 10 To approve the Proposed Renewal of, and Amendments to, the General Mandate for Interested Person Transactions 11 To approve the Proposed Renewal of the Share Purchase Mandate 12 To approve the Proposed Appointment of Deloitte & Touche LLP as the Auditors Dated this day of 2016 Signature of Shareholder(s) or Common Seal of Corporate Shareholder Total number of Shares in: (a) CDP Register (b) Register of Members No. of Shares * Delete where inapplicable IMPORTANT: PLEASE READ NOTES OVERLEAF BEFORE COMPLETING THIS FORM

180 Personal Data Privacy: By submitting an instrument appointing a proxy(ies) and/or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of Annual General Meeting dated 24 March Notes: 1. If the member has shares entered against his name in the Depository Register (maintained by The Central Depository (Pte) Limited), he should insert that number of shares. If the member has shares registered in his name in the Register of Members (maintained by or on behalf of the Company), he should insert that number of shares. If the member has shares entered against his name in the Depository Register and shares registered in his name in the Register of Members, he should insert the aggregate number of shares. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by the member. 2. (a) A member who is not a relevant intermediary is entitled to appoint not more than two (2) proxies to attend, speak and vote at the meeting. Where such member s form of proxy appoints more than one (1) proxy, the proportion of the shareholding concerned to be represented by each proxy shall be specified in the form of proxy. (b). In relation to a relevant intermediary who wishes to appoint more than two (2) proxies, it should annex to the proxy form the list of proxies, setting out, in respect of each proxy, the name, NRIC/Passport number and number of Shares in relation to which the proxy has been appointed. For the avoidance of doubt, a CPF Agent Bank who intends to appoint CPF/SRS investors as its proxies shall comply with this Note. relevant intermediary has the meaning ascribed to it in Section 181 of the Companies Act, Chapter A proxy need not be a member of the Company. First fold.glue all sides firmly. Stapling & spot sealing are disallowed. Affix Postage Stamp The Company Secretary CHINA AVIATION OIL (SINGAPORE) CORPORATION LTD 8 Temasek Boulevard #31-02 Suntec Tower Three Singapore Second fold. Glue all sides firmly. Stapling & spot sealing are disallowed. 4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 8 Temasek Boulevard, #31-02, Suntec Tower Three, Singapore not less than 48 hours before the time appointed for the Meeting. 5. Completion and return of this instrument appointing a proxy or proxies shall not preclude a member from attending and voting at the meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy, to the meeting. 6. 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 common seal or under the hand of its attorney or a duly authorised officer. 7. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid. 8. The Company shall be entitled to reject an instrument appointing a proxy or proxies which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument (including any related attachment). In addition, in the case of a member whose shares are entered in the Depository Register, the Company may reject an instrument appointing a proxy or proxies if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at seventy-two (72) hours before the time appointed for holding the meeting, as certified by The Central Depository (Pte) Limited to the Company.

181 This page has been intentionally left blank

182 This page has been intentionally left blank

183 VISION 2020 a collective effort of the CAO team who had come together to create an interconnected multi-canvas artwork, reflecting the Group s aspirations to be a global top-tier integrated transportation fuels provider, as well as a winning corporate culture built on the core values of Fairness, Integrity, Innovation and Transparency 愿 景 此 作 品 是 CAO 全 体 员 工 共 同 协 作 的 成 果, 由 多 幅 帆 布 画 布 拼 接 而 成, 描 绘 了 集 团 成 为 全 球 一 流 的 运 输 燃 料 一 体 化 方 案 提 供 商 的 愿 景, 以 及 基 于 公 平 诚 信 创 新 和 透 明 的 核 心 价 值 观 打 造 的 良 好 公 司 文 化

184 8 Temasek Boulevard #31-02 Suntec Tower Three Singapore Tel : (65) Fax : (65) Website : Company Registration No.: Z