SIA Engineering : FY2020/21 Sustainability Report

ENGINEERING A SUSTAINABLE

FUTURE SUSTAINABILITY REPORT 2020/21

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A B O U T

S I A E N G I N E E R I N G C O M PA N Y

The SIA Engineering Company (SIAEC) Group is a leading aviation maintenance, repair and overhaul (MRO) service provider based in Singapore and with presence in Hong Kong, Indonesia, Japan, Philippines, United States

and Vietnam. The Group comprises 23 subsidiaries, joint ventures and associated companies (JVs) and employs more than 9,000 people.

The Group provides a comprehensive suite of MRO services to airline customers and aerospace equipment manufacturers worldwide, ranging from airframe and line maintenance, fleet management, repair and overhaul of engines and components, engineering and material management support, to additive manufacturing. Today, we have a client base of more than 80 international carriers and aerospace equipment manufacturers.

SIA Engineering Company Limited is listed on the Mainboard of the Singapore Exchange (SGX) and is a subsidiary of Singapore Airlines Limited (SIA).

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O U R M I S S I O N A N D C O R E VA L U E S

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Our Mission is underpinned by our Core Values, which define SIAEC's corporate culture.

M I S S I O N S T A T E M E N T

SIA Engineering Company is engaged in providing aviation engineering services

of the highest quality, at competitive prices for customers and a profit to the Company.

C O R E VA L U E S

	PURSUIT OF	SAFETY	CUSTOMER	CONCERN	INTEGRITY	TEAMWORK
	EXCELLENCE		FIRST	FOR STAFF
	We strive for the highest	We regard safety as an	Our customers are	We value our staff and	We strive for fairness	We work with pride as
	professional standards	essential part of all our	foremost in our minds	care for their well-being.	in all our business and	one team to achieve
	in our work and aim	operations. We maintain	at all times. We go the	We treat them with	working relationships.	success together.
	to be the best in	and adopt practices that	extra mile to exceed	respect and dignity and
	everything we do.	promote the safety	their expectations.	seek to provide them
		of our customers		with appropriate training
		and staff.		and development so
				that they can lead
				fulfilling careers.

O U R M E M B E R S H I P S

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The Company is a member of the Singapore Business Federation, Singapore International Chamber of Commerce,

Singapore National Employers Federation, Singapore Institute of Aerospace Engineers and Association of Aerospace Industries (Singapore).

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A B O U T T H I S R E P O R T

Reporting Period

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The report highlights our economic, environmental, social and governance (EESG) initiatives and performance for the financial year 1 April 2020 to 31 March 2021 (FY2020/21). Data and information from past reporting cycles have been included, where available. Our report is published on an annual basis on SIAEC's website, with our last report published in June 2020.

Reporting Scope and Boundary

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All information, including data, statistics and targets presented in this report relates to SIAEC's operations in Singapore, where the majority of our activities are carried out, unless stated otherwise. We aim to progressively expand our reporting to include our key subsidiaries and have started to gather data in preparation for future reporting.

SIAEC's JVs are listed on page 20. Financial information relating to the SIAEC Group's business can be found in the FY2020/21 Annual Report.

This is the fourth Sustainability Report from SIAEC.

Reporting Framework

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Global Reporting Initiative (GRI)

The report has been prepared in accordance with the GRI Standards: Core option. The GRI Standards is selected as it represents the global best practice for reporting an organisation's sustainability impacts.

SGX Sustainability Reporting Listing Rules and Guide The report has been prepared in accordance with the five primary components set out in the SGX- ST Listing Rule 711B, and takes reference from the SGX Sustainability Reporting Guide, which provides guidelines on component requirements and reporting principles.

United Nations Sustainable Development Goals (SDGs)

SIAEC supports the United Nation's 2030 Agenda for Sustainable Development. Recognising that businesses are integral to the achievement of these goals, we have reviewed the aspects important to the Company and our stakeholders against the SDGs and identified 13 SDGs that our sustainability practices are in support of.

Reporting Quality

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SIAEC has not sought external assurance for this report but will consider doing so for future reports.

Feedback

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We value your feedback, which will help us to improve our reporting and sustainability practices. You can reach out to SIAEC's Sustainability Working Group at siaec@ singaporeair.com.sg.

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C E O ' S

M E S S A G E

Over the past year, there has been an increasing focus on a green and resilient recovery from COVID-19 globally and in Singapore. In February 2021, Singapore launched the national blueprint for sustainable development, the Singapore Green Plan 2030, signalling the nation's resolve to work towards a net-zero aspiration. SIAEC recognises the importance and is fully committed to supporting decarbonisation. As part of the aviation ecosystem, we play an important role in contributing to the collective efforts to reduce carbon emissions generated by the aviation industry. In FY2020/21, we established the Sustainability Steering Committee to work closely with the Board on the sustainability strategy and direction, and to accelerate the implementation of sustainability

initiatives in SIAEC.

During the year, we achieved an important milestone of our plan to reduce SIAEC's carbon footprint with the adoption of renewable energy in our operations. We installed solar photovoltaic systems on the roofs of our buildings and hangars, which would reduce our electricity consumption from non- renewable sources by 20%. In addition, one of our hangars achieved the Building and

Construction Authority's Green Mark Platinum rating and Super Low Energy Building status, as well as Public Utilities Board's Water Efficient Building certification. We have also enhanced our waste recycling programme and started to report waste and water data in this report.

Our sustainability drive goes beyond SIAEC and extends to our Group companies. Our subsidiary in the Philippines has installed a solar photovoltaic system, which will be able to supply 15% of its electricity requirements. Several of our joint venture and associated companies have also installed solar photovoltaic systems at their facilities or are planning to embark on similar projects to tap solar energy for their operations.

The COVID-19 pandemic has upended the lives and livelihoods of many people and economies globally. SIAEC Group's businesses had not been spared and were severely impacted by the sharp reduction in flight activities. In response to this unprecedented crisis, tight cost controls were implemented. As the situation escalated, we had to introduce difficult measures including compulsory no- pay leave, furlough and salary cuts. Surplus manpower was redeployed to support areas with increased demand, such as aircraft disinfection and preservation maintenance. Schemes were also rolled out to reskill and upskill employees during the downturn. These measures and support from the Singapore government have protected jobs and avoided layoffs. Throughout this difficult period, we maintained close communication with the unions and provided support to released contract employees, such as arranging job placement fairs to help them seek alternative employment opportunities. We are grateful to have received strong support from our employees and unions to manage costs, as

well as the Singapore government for the wage support.

Protecting the health and safety of our workforce remains a priority during the pandemic. To safeguard the health and well- being of our stakeholders, the Company implemented safe management measures and processes to keep our workplace safe. Under a rostered routine testing programme, frontline employees who are at risk of exposure to COVID-19 have to undergo regular testing, for early detection and to prevent spread of infections. Employees were also strongly encouraged to sign up for COVID-19 vaccination when priority was given to the aviation community. As of July 2021, 92% of our workforce has received at least one dose of the vaccine. We have also set up a one-stopCOVID-19 support portal for employees to access consolidated information on relevant regulatory updates, industry news, health and mental wellness tips and helplines.

Arising from changes in the operating environment, we continually identify and put in place measures to manage new safety risks, such as aircraft towing in the congested airport due to the large number of parked aircraft. Following the success of our Aviation Safety Promotion Centre in 2019, we have set up the Workplace Safety Promotion Centre in FY2020/21 to augment existing safety training and programmes with the aim to reinforce workplace safety culture and mindset amongst our workforce.

In spite of the challenges brought about by the pandemic, we have not forgotten our commitment to contributing to the community. While several of our Corporate Social Responsibility (CSR) activities had to be suspended due to COVID-19 restrictions, our

employee volunteers participated in community events where permissible. We continued to hold our annual charity run virtually and raised funds for beneficiaries of our CSR partner.

Our focus on sustainable growth was not disrupted by the pandemic as we forged ahead with our vision to be the MRO service provider of choice. In January 2021, phase two of our Transformation programme was launched to better strengthen SIAEC's value creation for our stakeholders, and support the aviation community's recovery from the crisis. We are positioning ourselves to emerge stronger by optimising our operational processes through Lean methodology and digital tools, developing new technology-enabled products and services for customers and industry partners, and continually reskilling and upskilling our people. To this end, we are honoured and encouraged to be recognised and awarded the 2021 Asia-Pacific MRO of the Year Award by Airline Economics magazine.

The recovery of the MRO business is contingent on the resumption of global air travel. The roll-out of COVID-19 vaccinations globally has provided some encouraging signs of growing confidence in international air travel, a more meaningful increase in flight frequencies and the subsequent demand for MRO services. Countries that are well- advanced in their vaccination programmes and with effective containment measures in place are easing travel restrictions and re-opening their economies. Through our initiatives to drive sustainability, productivity and innovation, we aim to emerge from this crisis stronger and greener.

NG CHIN HWEE

Chief Executive Officer

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