Ar2012 PDF

TABLE OF CONTENTS
Vision & Mission
Group Financial Highlights
Message from Executive Chairman & Group CEO
Board of Directors
11
International Advisory Panel
12
Key Management
13
Geographical Presence
14
Financial Review
17
Operating Review
24
Corporate Social Responsibility
28
Investor Relations
DELIVERING INNOVATIVE SOLUTIONS

LEADING THE WAY
OUR VISION
To be the leading company the world seeks for
innovative and effective environmental solutions.
OUR MISSION
To provide efficient and cost-effective solutions to
meet our clients needs through innovation and
technological advancement.
HYFLUX LTD
ANNUAL REPORT 2012
GROUP
FINANCIAL HIGHLIGHTS
*
All financial information presented in Singapore dollars, unless otherwise stated.
KEY FINANCIAL DATA

for year ended 31 December
($000)
2008
2009
2010
2011
2012
554,224
524,814
569,737
481,975
682,384
Profit before tax
70,375
82,972
100,473
62,043
76,998
Profit after tax
62,218
74,291
88,885
55,725
64,713
Profit attributable to shareholders
59,036
75,036
88,510
53,027
60,994
Shareholders equity
297,547
365,244
502,501
920,591
860,593
Total assets
846,555
1,072,563
1,359,702
2,032,465
2,350,344
Net assets
307,899
393,402
514,507
935,567
877,029
37.80
46.10
58.60
60.60
55.81
Revenue
Net asset value per share (cents) (1)(2)
7.50
9.51
10.52
4.30
4.43
Dividend per share (cents) (2)
2.29
3.33
4.17
2.77
3.20
Return on revenue (%)
10.7
14.3
15.5
11.0
8.9
Return on equity (%)
19.8
20.5
17.6
7.1
8.0
Earnings per share (cents)
(1)
(2)
(3)
(2)(3)
(3)
FY2011 and FY2012 net asset value excluded non-controlling interests and were adjusted for Class A Cumulative Perpetual Preference Shares
(CPS) of $400 million
FY2008 and FY2009 were restated to include December 2010 issue of one bonus share for every two existing ordinary shares
FY2011 and FY2012 were adjusted for CPS
Group Revenue by Country & Region

($ million)
Asia ex-China
800
MENA
700
600
China
16.5
13.0
500
400
75.1
223.0
494.6
330.5
300
343.8
200
226.9
114.4
314.7
100
0
FY08
28.9
181.3
150.8
140.7
158.9
FY09
FY10
FY11
FY12

LEADING THE WAY
GROUP
FINANCIAL HIGHLIGHTS
$61.0m
55.8 cents
net asset value per share (1) (2)
($ million)
100
90
80
70
60
50
40
30
20
10
0
70
88.5
60
75.0
59.0
53.0
61.0
58.6
60.6
FY10
FY11
55.8
46.1
50
40
37.8
30
20
10
FY08
FY09
FY10
FY11
FY12
4.43 cents
4.5
FY12
4.17
4.0
9.51
3.33
3.5
7.50
FY09
(cents)
10.52
10
FY08
dividend per share (2)
(2) (3)
(cents)
12
3.20 cents
earnings per share
3.20
2.77
3.0
2.5
4.30
4.43
2.29
2.0
1.5
1.0
2
0
(cents)
0.5
FY08
FY09
FY10
FY11
FY12
0.0
FY08
FY09
FY10
FY11
FY12
8.0%
return on equity (3)
(%)
25
20
19.8
20.5
17.6
15
10
7.1
8.0
5
0
(1)
(2)
(3)
FY08
FY09
FY10
FY11
FY12
FY2011 and FY2012 net asset value excluded non-controlling interests and were adjusted for CPS
FY2008 and FY2009 were restated to include December 2010 issue of one bonus share for every two existing ordinary shares
FY2011 and FY2012 were adjusted for CPS
HYFLUX LTD
ANNUAL REPORT 2012
MESSAGE FROM
EXECUTIVE CHAIRMAN & GROUP CEO
Dear Stakeholders
Hyflux improved on our financial performance
in FY2012. Our group revenue for the year
ended 31 December 2012 increased by 42%
to $682.4 million from $482.0 million, and
profit after tax and minority interests (PATMI)
rose 15% to $61.0 million from $53.0 million.
Our operations in Asia ex-China contributed
the bulk of revenue and profit growth. The
growth was registered despite the lingering
uncertainties in the global economic outlook
throughout 2012.
Our Board of Directors has recommended a
final dividend of 2.50 cents per ordinary share.
This is in addition to an interim dividend of
0.70 cents per ordinary share that was paid out

on 31 August 2012. The total dividend for the
year represents a 16% rise from the dividend
declared the year before.
Delivering innovative solutions,
leading the way
We decided to retain the innovation theme for
our FY2012 Annual Report as the next phase
of our growth is innovation-based. We believe
that continued innovation in technology
development, systems and processes, and
product offerings and solutions will buttress our
leading position in the global water industry.

LEADING THE WAY
MESSAGE FROM
Today, we are seeing rising recurring income streams from our operations and
maintenance (O&M) business, asset returns, membrane sales and other services.
The almost 100% jump in our O&M order book from a year ago is a reflection of
part of this concerted initiative.
Growing recurring income streams
Over the years, Hyflux has been working on
growing predictable and recurring revenues.
Today, we are seeing rising recurring income
streams from our operations and maintenance
(O&M) business, asset returns, membrane sales
and other services. The almost 100% jump
in our O&M order book from a year ago is a
reflection of part of this concerted initiative.
Our total order book currently stands at $2.9
billion with O&M contributing $1.9 billion.
At the end of FY2011, our total order book
was $1.9 billion with the O&M portion at
$943 million. O&M revenues are contractually
supported over the concession periods of 20
to 30 years.
We believe that our recurring income will
continue to grow substantially. By 2016, our
recurring income will capture the full impact of
our current portfolio of water projects and asset
returns, membrane sales and other services.
Our recurring income streams will complement
our engineering, procurement and construction
(EPC) income streams which are mainly projectdriven.
Key projects progressing well
We are pleased with the progress that has
been made at Tuaspring Desalination Plant,
one of Asias largest seawater reverse osmosis
(SWRO) desalination plants by capacity. The

desalination plant is expected to produce
potable water for PUB in the third quarter of
2013. Construction works on the power plant
facility at the Tuaspring project are progressing
as planned. With the desalination portion
close to completion, we are now working on
non-recourse project financing for the entire
project, for which the total project cost is an
estimated $1.05 billion.
In March 2012, we announced that Hyflux
was a member of the consortium that would
be developing a 336,000 m3/day capacity
SWRO desalination plant for the Dahej Special
Economic Zone (SEZ) in Gujarat, India. I am
pleased to report that in January 2013 the
consortium comprising Hitachi Ltd and Hyflux
has finalised and signed the water purchase
agreement (WPA) with Dahej SEZ Limited
(DSL) for a term of 30 years, including an
estimated three-year construction period.
DSL is committed to purchase 100% of the
water on a take or pay basis. The WPA will
become effective once financial close for
the desalination project is achieved. With an
estimated total project cost of US$600 million,
the Dahej Desalination Plant project will be
funded through a combination of equity and
non-recourse project financing. The consortium
is currently in discussion with financial
institutions to provide non-recourse project
financing.
HYFLUX LTD
ANNUAL REPORT 2012
MESSAGE FROM
Our 500,000 m3/day capacity desalination
project in Magtaa, Algeria, one of the worlds
largest SWRO plants, is currently undergoing
testing and commissioning.
Large municipal water projects back
in the pipeline
Globally, tenders for water infrastructure
projects of significant sizes were few and far
between over the last few years as plans to
build new plants were put on hold due to
economic uncertainties and financing issues.
We are getting indications of more projects
coming back on-stream this year due to pentup demand. Municipal governments could
ill afford to further delay their investments in
water infrastructure projects for both domestic
and industrial consumption.
The insatiable thirst for water will drive longterm demand for sustainable sources of water
through desalination and water recycling.
Increasingly, countries are looking at private
funding for public sector water investments,
hence generating more Build-Operate-Transfer
(BOT) and Public-Private-Partnership (PPP)
opportunities. Hyflux is actively pursuing such
water infrastructure projects in Asia, the Middle
East and other selective markets. I believe we
are in the position to expand our BOT and EPC
portfolios, while growing our O&M business
further.
The trend towards SWRO technology to replace
more energy-intensive thermal desalination
technologies will add to opportunities
especially in the Middle East region.
In China, we will continue to invest in the

organic expansion of projects under Galaxy
NewSpring, our 50/50 joint venture with
Mitsui & Co. We will increase our resources
on industrial-based projects as we see more
available opportunities in this market segment
and in the sales of membrane products and
systems. We intend to reinforce our brand as
a technology partner of choice to state-owned
enterprises for BOT projects.
Market demand for standard
systems
We see heightened interest by industries
and communities for membrane systems with
standard configurations for water treatment
applications, such as seawater and brackish
water desalination, surface water treatment
and wastewater recycling. Typically, these are
industrial and manufacturing plants or small
communities facing water shortages or water
usage restrictions and are in need of a reliable
and high quality water supply in a quick and
cost-effective manner. Apart from tailored
integrated solutions, we now also offer preengineered standard membrane systems that
integrate our proprietary Kristal ultrafiltration
and reverse osmosis membrane units and
components.
Inspiring innovation
On 3 July 2012, Dr Vivian Balakrishnan, Minister
for the Environment and Water Resources,
inaugurated our new HQ building, Hyflux
Innovation Centre (HIC). Developing HIC from
the ground allowed us to create a living space
that encourages interaction and the exchange
of ideas to spark innovation. Our employees,
who spend long hours at work, appreciate the

LEADING THE WAY
MESSAGE FROM
facilities that provide a seamless link between
innovation, creativity, work and play. We have
also put in place family-friendly facilities such as
a child care centre for the mothers and fathers
among our employees.
We want to continue to make a difference

to the community and in the lives of others
by devoting time and energy, in addition to
sponsorships and philanthropic contributions.
International advisory panel
Volunteering and making a

difference
Our Corporate and Social Responsibility (CSR)
efforts in 2012 took on the added dimension of
staff volunteerism.
A group of our employees volunteered to
read and organise activities for the KIDSRead
programme under the Asian Womens Welfare
Associations (AWWA) family service centre
nearby. The weekly reading programme
is targeted at pre-schoolers from less
advantaged families and exposes them to the
English language and reading before they
enter primary school. We will commit to this
project for a second year as it is a meaningful
contribution to the neighbourhood.
In September, we participated in the NTUC
FairPrice Walk for Rice @ Southeast which was
an initiative with the Peoples Association.
We organised a 4.3 km walk from HIC to the
Singapore Flyer. For every 100 m that each of
our staff walked, NTUC FairPrice donated a
bowl of rice to the needy. In total, we raised
9,675 bowls of rice covering a collective
distance of 967.5 km.
We closed the year with a charity car wash,
organised in collaboration with Yong-en Care
Centre. We managed to raise more than
$20,000 to support the activities of Yong-en
Care Centre which sees to the needs of seniors
and low-income families in the Chinatown area.
We welcome Mrs Yu-Foo Yee Shoon and Ms

Liu Jingsheng to our International Advisory
Panel which has been set up to advise on our
continued expansion in international markets.
A former Minister of State who retired from
Singapore politics in 2011, Mrs Yu-Foo is a
passionate advocate on labour and community
issues. Ms Liu brings with her extensive
experience in investment banking at the China
International Capital Corporation Limited. We
will benefit richly from their counsel in public
policy and government relations and intimate
knowledge of the international markets.
Thank you
Finally, on behalf of our Board of Directors, I
would like to thank our shareholders, partners,
customers and suppliers for their support all
these years.
I would also like to thank our employees for
their dedication and hard work through 2012.
I am fully assured that I can count on their
continued support.
OLIVIA LUM
Executive Chairman & Group CEO
HYFLUX LTD
ANNUAL REPORT 2012
BOARD OF
DIRECTORS
Olivia Lum
Executive Chairman & Group CEO
Teo Kiang Kok

Lead Independent Director
Lee Joo Hai

Non-Executive Independent Director
Ms Lum started corporate life as a

chemist with Glaxo Pharmaceutical and
left in 1989 to start up Hydrochem (S)
Pte Ltd, the precursor to Hyflux Ltd.
Mr Teo has been a Non-Executive

Independent Director of Hyflux Ltd
since December 2000. He is also the
Chairman of the Nominating
Committee and a member of the
Remuneration and Risk Management
Committees.
Mr Lee has been a Non-Executive

since December 2000. He is also the
Chairman of the Audit Committee and
a member of the Remuneration and
Risk Management Committees.
Managing the Group for more than 20

years now, Ms Lum is the driving force
behind Hyfluxs growth and business
expansion, and is responsible for policy
and strategy formulation and corporate
direction.
A former Nominated Member of
Singapore Parliament, Ms Lum
currently is a member of the SingaporeTianjin Economic & Trade Council,
the Singapore-Jiangsu Cooperation
Council, Singapore-Zhejiang Economic
& Trade Council and Singapore
Business Federation Council.
Among the many accolades Ms Lum
has received for her entrepreneurial
achievements are: the Winner of the
Regional Growth Award by Nihon
Keizai Shimbun at the 11th Nikkei Asia
Prize 2006, and the Ernst & Young
World Entrepreneur Of The Year 2011.
Ms Lum holds an Honours degree in
Chemistry from the National University
of Singapore.
Mr Teo was admitted to the Singapore

bar in 1983. He was a partner of Shook
Lin & Bok LLP (SLB) from 1988 to 2011.
Prior to joining SLB, he worked as an
associate with Freshfields, an international
law firm and as a corporate finance
executive with Wardley Limited, an
international investment bank. He
obtained his Bachelor of Law (Honours)
degree from the University of Hull and
is a Barrister-at-Law from Lincolns Inn.
Mr Teo headed the Corporate Finance
and China practices of SLB. In his 29
years of legal practice, he has advised
on securities offerings, mergers and
acquisitions, joint ventures, strategic
investments as well as corporate
law and regulatory compliance,
particularly the listing and compliance
requirements of companies listed on
the Singapore Exchange. Mr Teos
regional practice included foreign
investment work in and out of
Singapore, the Peoples Republic of
China, India and the ASEAN countries.
He retired as a senior partner of SLB in
May 2011 and was a consultant to SLB
until May 2012.
Mr Lee is a member of both the

Institute of Certified Public Accountants
of Singapore and the Institute of
Chartered Accountants in England and
Wales. He was a partner in a public
accounting firm in Singapore and has
more than 20 years of experience in
accounting and auditing.
Mr Lee also sits on the boards of other
listed companies, including Lung Kee
(Bermuda) Holdings Ltd.

LEADING THE WAY
BOARD OF
DIRECTORS
Gay Chee Cheong

Christopher Murugasu
Rajsekar Kuppuswami Mitta

Mr Gay has been a Non-Executive

Independent Director of Hyflux
Ltd since August 2001. He is also
the Chairman of the Remuneration
Committee, as well as a member of the
Nominating and Audit Committees.
Mr Murugasu has been a director of

Hyflux Ltd since February 2005. He is
also a member of the Nominating and
Remuneration Committees.
Mr Mitta has been a Non-Executive

since April 2007. He is also Chairman
of the Risk Management Committee
and member of the Audit Committee.
He sits on the Board of Governors of

Temasek Polytechnic; Advisory Board
of the Lee Kong Chian School of
Business at Singapore Management
University; Entrepreneurship Committee
at the National University of Singapore;
Board of Trustees of the United World
College of South East Asia Foundation;
Board of Heliconia Pte Ltd; and Board
of CapitaMall Trust Management Limited.
Mr Gay was the co-founder and CEO
of 2G Capital Private Limited, a private
investment company investing in
equities and private companies in the
Asia Pacific economies. The company
was awarded Highest Net Profit in 2006
and Net Profit Excellence in 2007 in the
annual SME 500 ranking.
Mr Gay graduated from the Royal
Military Academy (RMA), Sandhurst
and Royal Military College of Science,
Shrivenham, United Kingdom. He holds
Honours degrees in Electronics
Engineering from the Royal Military
College of Science, Shrivenham and
in Economics from the University of
London, United Kingdom. He also has a
Master of Business Administration from
the National University of Singapore.
Previously Senior Vice President for

Corporate Services at Hyflux Ltd,
he was responsible for the Group's
human resources, procurement and
general administration functions.
Prior to joining Hyflux, Mr Murugasu
had accumulated over 15 years of
experience in the public sector
as well as with a foreign bank.
He holds an Honours degree in
Computing Science from Imperial
College, United Kingdom, and
a Master's degree from the London
School of Economics, United Kingdom.
Mr Mitta is currently the Chairman of

Essential Value Associates Pte Ltd, a
boutique consulting firm that works
with selected Chairmen and CEOs
who seek to create lasting change
to develop high growth sustainable
businesses with quality governance.
He was Chairman of Arthur D Little
Asia and a Senior Member of Booz
Allen Hamilton. He has advised some
of the world's best consumer goods
and customer-intensive companies,
technology-intensive corporations,
conglomerates and regional governments.
Prior to consulting, Mr Mitta worked
in senior marketing roles with Pepsico
and Mars Inc.
Mr Mitta is a seasoned negotiator
and deal maker with well developed
cross cultural sensitivity developed
through living and working across
multiple countries and consulting with
a diverse list of clients. His main areas
of professional interest are in strategy
development and value extraction
through enhancing marketing and
sales effectiveness, the competitive
repositioning of brands/services and
issues relating to managing change
within organisations.
Mr Mitta holds a Bachelor's degree in
Chemical Engineering and a Master's
in Business Administration.
9
HYFLUX LTD
ANNUAL REPORT 2012
BOARD OF
DIRECTORS
Simon Tay
Mr Tay has been a Non-Executive
since May 2011. He is also a member of
the Risk Management Committee.
He is a public intellectual as well as
private advisor to major corporations
and policymakers. He is concurrently
Chairman of the Singapore Institute
of International Affairs, the country's
oldest think tank and founding
member of the ASEAN network of
think tanks, and Associate Professor,
teaching international law at the
National University of Singapore.
Mr Tay is also Senior Consultant at
WongPartnership, a leading Asian law
firm with practices across the region.
He serves on Toyota Corporation's
Global Advisory Board and Far East
Organization Group. Previously, he has
been corporate advisor to Temasek
Holdings, the Singapore government's
investment firm. He has spoken at
leading business conferences including
the World Economic Forum, APEC
CEO Summits and SIBOS, and briefed
leading banks and major corporate
boards.
From 1992 to 2008, he served in public
positions for Singapore, including as
Chairman of the National Environment
Agency and reporting to the Minister,
and a Nominated Member of Parliament.
10
Gary Kee
Non-Executive Non-Independent
Director
Mr Kee has been a Non-Executive NonIndependent Director of Hyflux Ltd
since May 2011. He is also a member of
the Audit Committee.
Mr Kee was the Chief Executive Officer
of the Trustee-Manager and NonIndependent Executive Director of
Hyflux Water Trust Management Pte
Ltd. Prior to that, he held numerous
senior regional management positions
in Finance, Operations and Strategic
Business Development in his 23-year
tenure at Hewlett Packard. He last
served as Director, Head of Strategy
and Corporate Development for Asia
Pacific & Japan.
Before joining Hewlett Packard, Mr
Kee was a Management Consultant
with Arthur Andersen Associates (now
known as Accenture). Mr Kee has also
served as a Board Director of various
companies and JTC Corporation.
Mr Kee holds a Bachelor of Commerce
from McMaster University in Canada and
a Master of Business Administration
from the University of Texas at Arlington
in the USA.

LEADING THE WAY
INTERNATIONAL
ADVISORY PANEL
Yu-Foo Yee Shoon

Senior Advisor
Liu Jingsheng
Senior Advisor
Mrs Yu-Foo Yee Shoon retired from

Singapore politics in 2011, having
been an elected Member of Parliament
from 1984 to 2011. She was Minister
of State for the Ministry of Community
Development, Youth and Sports from
August 2004 until her retirement.
Before that, Mrs Yu-Foo was Mayor
of the South West CDC and Senior
Parliamentary Secretary for the then
Ministry of Community Development
and Sports.
Ms Liu Jingsheng joined China

International Capital Corporation
Limited (CICC) in 1996 and currently
serves as Senior Advisor. Previously,
she was the Managing Director of
CICC, Chairman and CEO of CICC
(Singapore) Pte Ltd, and the Head of
Strategy Research Department. Ms Liu
worked in the Investment Banking
Department for years, boasting rich
experience in restructuring, reforming,
listing and financing for state-owned
companies, and abundant client resources
in the energy and mining sectors.
Mrs Yu-Foo started her career with

the National Trades Union Congress
(NTUC), rising through the ranks to
become Deputy Secretary-General
at the labour movement. She was the
first woman to chair the NTUC Central
Committee in 1980. An active figure
in social and volunteer work, she is
the Founder Patron for Singapores
Breast Cancer Foundation and
Chairman of the NTUC Ong Teng
Cheong Institute Training Foundation.
She advises and sits on the boards
of various organisations, including
NTUC Childcare, Global Yellow Pages,
Singapura Finance and is an executive
council member of Hainan University,
China. In 2011, she was accorded
"NTUC Stalwart" award at the NTUC
50th Anniversary May Day celebrations.
She holds a Masters degree in Business
from the Nanyang Technological University
and Honourary Doctorate of Education
from Wheelock College of Boston, USA.
At CICC, Ms Liu led and participated in

a number of restructuring, reforming
and overseas listing projects in the
energy, mining, and electricity sectors
for state-owned industrial leaders,
which included China Shenhua Energy
Company Limited, Huadian Power
International Corporation Limited,
Aluminum Corporation Of China
Limited, PetroChina Company Limited
and Peoples Insurance Company of
China. Of her many years in CICC, she
had raised more than US$70 billion
worth of funds in total. Before joining
CICC, Ms Liu had been working in the
National Development and Reform
Commission, P.R.China for 11 years.
Ms Liu holds a Masters degree in
Developing Economics from Khon
Kaen University Thailand, and a
Bachelors degree in Planning
Economics from Renmin University
of China.
11
HYFLUX LTD
ANNUAL REPORT 2012
KEY
MANAGEMENT
Olivia Lum
Executive Chairman &
Group CEO
Sam Ong
Group EVP &
Group Deputy CEO
Cho Wee Peng

Group EVP & Group CFO
Oon Jin Teik

Group EVP & CEO, China
Dr Andrew Ngiam
Group EVP & Group COO
Peter Wu
Group Senior MD & CEO,
Galaxy NewSpring
12
Winnifred Heap
Group EVP, Capital Markets

LEADING THE WAY
GEOGRAPHICAL
PRESENCE
Our offices
Landmark plants
Membrane installations
China
France
Algeria
Saudi Arabia
India
Malaysia
Singapore
MORE THAN
PLANTS IN OVER
1,300
400
MEMBRANE PRODUCTS
AND SYSTEMS INSTALLED
LOCATIONS
WORLDWIDE
World's Largest SWRO Desalination Plant
Singapore's First SWRO Desalination Plant
Singapore's First NEWater Plant
Magtaa Desalination Plant
SingSpring Desalination Plant
Bedok NEWater Plant
China's Largest SWRO Desalination Plant
Singapore's Largest SWRO Desalination Plant
Tianjin Dagang Desalination Plant
Tuaspring Desalination Plant
Singapore's Largest Membrane

Bioreactor Plant
Landmark projects
Jurong Membrane Bioreactor
13
HYFLUX LTD
ANNUAL REPORT 2012
FINANCIAL
REVIEW
For year ended 31 December
($ million)
2011
2012
Revenue
% change
482.0
682.4
42
Profit before tax
62.0
77.0
24
53.0
61.0
15
4.30
4.43
Group revenue by segment

($ million)
Municipal
Industrial
58.8
(12%)
5.4
(1%)
49.8
(7%)
417.8
(87%)
3.5
(1%)
Others
629.1
(92%)
FY11
FY12
OVERVIEW
REVENUE
Hyflux as a group achieved revenue of $682.4 million and

profit attributable to shareholders of $61.0 million for
FY2012. Basic earnings per share increased by 3% to 4.43
cents for FY2012.
Group revenue for FY2012 increased by 42% to $682.4

million as compared to $482.0 million for FY2011 mainly
due to higher contributions from projects in Asia ex-China.
14

LEADING THE WAY
FINANCIAL
REVIEW
Revenue from the municipal sector continued to be the main
contributor to Hyflux's growth as evidenced by the increase
from $417.8 million in FY2011 to $629.1 million in FY2012.
This represented a 5% point increase from 87% in FY2011
to 92% in FY2012 of our total revenue. Hyflux's municipal
projects are in Asia and Middle East & North Africa (MENA).
Industrial sector sales contributed 7% or $49.8 million in
FY2012 as compared to 12% or $58.8 million in FY2011.
The Asia ex-China market continued to be the major revenue
contributor. Revenue went up from $226.9 million in FY2011
to $494.6 million revenue in FY2012, representing a rise
from 47% in FY2011 to 73% in FY2012 of our total revenue.
On the other hand, we saw marginal contributions from
the MENA market. Revenue contributions decreased from
$114.4 million in FY2011 to $28.9 million in FY2012. This
decline from 24% in FY2011 to 4% in FY2012 of our total
revenue reflected the shift in geographical mix of projects
as major desalination projects in MENA were completed
during the year.
Revenue from China was $158.9 million or 23% of the total

revenue in FY2012 as compared to $140.7 million or 29%
in FY2011.

COSTS AND EXPENSES
Raw materials and consumables used and subcontractors
costs rose from $259.5 million in FY2011 to $413.5 million
in FY2012, largely driven by construction activities for
projects in Asia ex-China. The increase in project-based
employees also resulted in a rise in staff costs by 43% from
$60.0 million in FY2011 to $85.9 million in FY2012.
Finance costs increased by 26%, from $22.6 million in
FY2011 to $28.5 million in FY2012 due to higher bank
borrowings.
Depreciation, amortisation and impairment decreased from
$36.6 million in FY2011 to $29.4 million in FY2012.
Other expenses increased from $50.1 million for FY2011
to $60.1 million for FY2012 as a result of operating lease
expense incurred during the year as well as a gain on sales
of machinery and equipment in FY2011.
Group revenue by country

($ million)
Asia ex-China
China
MENA
226.9
(47%)
140.7
(29%)
158.9
(23%)
28.9
(4%)
114.4
(24%)
FY11
494.6
(73%)
FY12
15
HYFLUX LTD
ANNUAL REPORT 2012
FINANCIAL
REVIEW
The effective tax rate in FY2012 was about 16.9% mainly
due to higher contributions from entities in jurisdictions
that attracted higher statutory tax rates.
offset by repayments of fixed rate unsecured notes (Notes)

of $88.5 million issued under the Multicurrency Debt
Issuance Programme.
EARNINGS PER SHARE
Non-current liabilities increased to $1,081.5 million as at

31 December 2012 from $740.7 million as at 31 December
2011 due to the increase in loans and borrowings. Included
in the loans and borrowings as at 31 December 2012 was
$553.2 million of Notes that mature between 2014 and 2019.
Basic and fully diluted earnings per share, adjusted for

dividends on Class A Cumulative Perpetual Preference
Shares (CPS), for FY2012 increased by 3.0% and 3.3%
to 4.43 and 4.42 cents respectively as compared to FY2011.
BALANCE SHEET REVIEW
Shareholders equity decreased to $860.6 million as at 31
December 2012 from $920.6 million as at 31 December
2011. This was mainly attributable to the purchase of
33,935,000 treasury shares of $47.0 million, dividend
payments of $47.6 million and movements of $34.6
million on translation of foreign operations as a result of
the strengthening of the Singapore dollar against the US
dollar and Chinese renminbi during the financial year. The
decrease was offset by net profit for the year.
Current assets decreased to $914.9 million as at 31
December 2012 from $1,099.5 million as at 31 December
2011. This was largely due to lower cash and cash
equivalents as well as gross amounts due for contract work.
Non-current assets increased to $1,435.4 million as at 31
2011 as a result of intangible assets arising from service
concession arrangements of $205.4 million and financial
receivables of $286.5 million arising from the Groups
activities in Asia ex-China.
Current liabilities increased to $391.8 million as at 31
2011 mainly due to an increase in trade payables. This was
16
Our net gearing ratio remained a healthy 0.67 times as at 31

December 2012.
CASHFLOW AND LIQUIDITY
Hyfluxs cash position decreased to $541.2 million as at 31
2011.
In FY2012, net cash of $243.9 million was used in our
operating activities, mainly towards service concession
arrangement projects. Excluding cash used in these projects,
net cash generated in the operating activities was $270.9
million in FY2012, mostly contributed by collections from
projects executed.
Cash used in investing activities in FY2012 was for the
construction of Hyfluxs new headquarters and
manufacturing facility at Tuas Hub.
Cash generated from financing activities in FY2012 was
mainly from borrowings to fund Hyfluxs projects. Excluding
cash flow from borrowings, cash was used for payments of
dividends and purchases of treasury shares.

LEADING THE WAY
OPERATING
REVIEW
Hyflux's Kristal ultrafiltration membranes at Tuaspring Desalination Plant, Singapore
ENGINEERING, PROCUREMENT AND CONSTRUCTION (EPC)

Hyflux delivered a creditable performance in 2012 despite a pullback in projects as a result
of the combined effects of global economic uncertainties and Arab Spring. Our EPC order
book at the end of FY2012 was $1.03 billion.
In March 2012, Hyflux and our Japanese consortium partner Hitachi Ltd signed a Codeveloper Agreement with Dahej SEZ Limited to design, build, own and operate a
336,000 m3/day seawater reverse osmosis (SWRO) desalination plant to be located in the
Dahej Special Economic Zone in the state of Gujarat, India. This marks Hyfluxs first largescale water project in India. The total project cost is estimated at US$600 million and will
be funded through a combination of equity and non-recourse project finance. Hyflux is
expected to undertake a portion of the EPC services amounting to an estimated US$420
million. The water purchase agreement which will be for a period of 30 years, including an
estimated three-year construction period, was signed in January 2013 and we are currently
working on the financial close.
In Singapore, the 318,500 m3/day Tuaspring Desalination Plant is scheduled to start
operations in the third quarter of 2013 for a concession period of 25 years. Construction on
Singapores second and largest desalination plant commenced in the third quarter of 2011
under a tight project timeline. Work on the on-site 411 MW combined cycle gas turbine
power plant is also progressing as planned.
With the desalination plant close to completion, we are working on non-recourse project
financing for the entire project which has an estimated total project cost of $1.05 billion.
17
HYFLUX LTD
ANNUAL REPORT 2012
OPERATING
REVIEW
ORDER BOOK
($ million)
3,000
2,500
2,897
EPC
O&M
1,025
2,000
1,874
1,848
1,480
1,500
1,117
1,000
500
465
435
30
Dec 05
601
1,378
931
423
1,145
1,872
863
435
166
Dec 06
748
254
335
Dec 07
Dec 08
1,100
955
943
Dec 09
Dec 10
Dec 11
Dec 12
Note:
1. O&M order book is a summation of future revenues of our portfolio of plants over 20 30 year concession periods.
2. Dec 2012 EPC order book includes DahejSpring Desalination Plant; WPA was signed in January 2013.
3. Dec 2012 O&M order book includes Tuaspring and Magtaa projects.
In Algeria, our 500,000 m3/day Magtaa Desalination Plant,

one of the largest SWRO plants in the world, has recently
entered into the testing and commissioning stage after
electrical power was supplied to the site. Testing and
commissioning is an essential process prior to the startup
of the desalination plant.
During the year, Hyflux also undertook expansion and
enhancement works estimated at $88 million at six
wastewater treatment plants in China to raise the combined
treatment capacity by 100,000 m3/day. The plants are under
the Galaxy NewSpring portfolio, our 50/50 joint venture with
Mitsui & Co. At the close of FY2012, the expansion works
were more than 50% completed.
Asias Largest SWRO Desalination Plant
At 336,000 m3/day, DahejSpring Desalination Plant which is to be
located in the Dahej Special Economic Zone in the state of Gujarat,
India, will be Asias largest SWRO desalination plant. The co-developer
and water purchase agreements were signed in March 2012 and
January 2013 respectively, and the project will be undertaken by Hyflux
and Hitachi on a design, build, own and operate basis once financial
close is achieved.
18
OPERATIONS & MAINTENANCE (O&M)

Our O&M order book doubled to $1.87 billion in FY2012
with the addition of two large-scale desalination projects in
Singapore and Algeria which are expected to start operation
in FY2013. At the close of FY2011, our O&M order book was
$943 million. We expect our O&M revenue to capture the full
impact of our current portfolio of water projects by FY2016.
The growth of our O&M order book is part of Hyfluxs

LEADING THE WAY
OPERATING
REVIEW
At Hyflux, we strive for continuous innovation in designs, techniques and processes
as well as invest in the development of new products and technologies that will create
new value for communities, industries and consumers.
concerted initiative to develop recurring and predictable
income streams. A stronger O&M order book translates to
a higher proportion of steady and predictable revenues for
the Group as the O&M revenues are contractually supported
over the concession periods of 20 to 30 years. We are also
seeing rising recurring income streams from asset returns,
membrane sales and other services within our Group. These
will complement that of our EPC revenues which are mainly
project-driven.
INNOVATION
Sustainable, Integrated Water Solutions for Industries and

Communities
Hyfluxs Standard Membrane Systems, a series of compact, preengineered seawater and brackish water reverse osmosis systems that
incorporate Hyfluxs proprietary Kristal ultrafiltration pre-treatment
technology, were launched in 2012 to provide a quick, cost-effective
and sustainable solution for industries and communities facing water
shortages or water usage restrictions.
In 2012, we launched Standard Membrane Systems, a series

of compact, pre-engineered seawater and brackish water
reverse osmosis systems that integrate our proprietary
Kristal ultrafiltration membranes with reverse osmosis
membrane units and components. These systems are
suitable for a wide range of water treatment applications
such as seawater and brackish water desalination, surface
water treatment and wastewater recycling. They can be
rapidly installed and started up and offer a reliable, costeffective and high quality water supply to industries and
small communities facing water shortages or water usage
restrictions.
The Standard Membrane Systems are backed by Hyfluxs
years of expertise and experience in design, development,
process engineering, installation, operation and maintenance
of small to large-scale desalination facilities worldwide.
At Hyflux, we strive for continuous innovation in designs,
techniques and processes as well as invest in the development
of new products and technologies that will create new value
for communities, industries and consumers. Our team of
researchers and scientists work closely with the engineering
design and technology commercialisation departments that
integrate the technologies developed out of our research
and development laboratories into viable, cost-effective and
sustainable solutions for the global water industry.
We also collaborate with a network of research institutes
around the world to provide us with access to new technologies,
techniques and methodologies, and to enable us to anticipate
tomorrows challenges.
19
HYFLUX LTD
ANNUAL REPORT 2012
OPERATING
REVIEW
Hyflux Innovation Centre, Hyflux's new global headquarters
On 3 July 2012, Dr Vivian Balakrishnan, Singapores Minister for the Environment and Water
Resources, inaugurated our new global headquarters, Hyflux Innovation Centre (HIC). HIC is
our design, R&D and commercialisation centre to spearhead the development of membrane
technologies for municipal and industrial applications. Developing HIC from the ground up
allowed us to create a working environment that encourages interaction and the exchange
of ideas to spark innovation.
To us, innovation is more than research and development. Innovation encompasses every
other aspect of the water value chain in which we are present, from the way we design and
develop membrane systems and plants, to the way we structure, bid and finance large-scale
water projects.
It is this approach to innovation that has propelled us to become one of the worlds leading
fully-integrated water solutions companies and will continue to be crucial for the next phase
of our growth.
20

LEADING THE WAY
OPERATING
REVIEW
present opportunities for Hyflux. PUB, the national water
agency, has outlined in a report released in March 2013 its
2030 targets for 50% of Singapores water demand to be
met by NEWater and 20% of water demand to be met by
desalinated water. Together, these two alternative water
sources will be able to meet up to 80% of water demand
in 2060. As PUB continues to expand and invest in water
infrastructure projects to meet the future demand for water,
new projects are expected to be unveiled in the coming years.
In India, Hyflux and Hitachi are working on the financial close
for a 336,000 m3/day SWRO desalination plant to be located
in the Dahej Special Economic Zone after signing a Codeveloper Agreement and water purchase agreement with
Dahej SEZ Limited. Set to be Asias largest desalination plant,
Hyfluxs first large-scale municipal water project in India
will increase our profile in India and pave the way for our
participation in more municipal water projects.
Artist's impression of 411 MW power plant at Tuaspring project
GEOGRAPHICAL MARKETS
Asia ex-China
In FY2012, revenue from Asia ex-China was $494.6 million
or 73% of Group revenue. This more than doubled from
FY2011 due to higher contributions from projects in Asia
ex-China. The development of Tuaspring Desalination
Plant in Singapore went into full swing in FY2012. The
desalination plant is scheduled to start operations in the
third quarter of 2013. Construction work on the 411 MW
combined cycle gas turbine plant facility which is being
integrated with Tuaspring Desalination Plant is progressing
as planned. Hyflux is undertaking the structural, mechanical
and electrical works while Siemens will supply an F-class gas
turbine. In the meantime, Tuaspring Desalination Plant will
obtain electricity from the grid until its on-site power plant
starts operations.
In Singapore, Hyfluxs consumer products arm has made
inroads into the residential development market. Our
antioxidant alkaline ultrafiltration drinking water system will
soon come fitted in the residential units of some upcoming
developments. Sales through our on-line store, HyfluxShop,
have progressively increased with greater awareness created
for the channel. Our consumer products are also available at
certain retail chains.
Singapore which has a very comprehensive road map for
water sustainability and management will continue to
India is also gaining importance as Hyflux seeks to expand

our engineering capabilities. During the year, we opened
an Engineering Resource Centre in Pune that will support
our long-term growth. When the centre becomes fully
operational, it will provide engineering services for the Dahej
desalination project and other projects around the world.
Hyfluxs New Global Headquarters

Hyflux Innovation Centre, which was opened by Dr Vivian Balakrishnan,
Singapores Minister for the Environment and Water Resources on 3 July
2012, serves as the nerve centre of Hyfluxs global operations. Besides
accommodating the executive and corporate offices, it houses the
engineering design and technology commercialisation departments
that integrate the technologies developed out of the Groups research
and development laboratories into viable, cost-effective and sustainable
solutions for the global water industry.
21
HYFLUX LTD
ANNUAL REPORT 2012
OPERATING
REVIEW
Magtaa Desalination Plant, Algeria
There is huge growth potential for the desalination and water

recycling markets in India as many states are increasingly
facing water shortages due to low ground water levels and
high demand. Desalination and water recycling are costefficient and sustainable solutions for cities and industries to
address the challenges of securing reliable water supplies
and effective wastewater management.
China
Revenue contribution from the Group's operations in China
was $158.9 million or 23% of Group revenue in FY2012.
The total revenue from China was 13% higher than that
registered in FY2011. During the year, we undertook
expansion and enhancement works at six wastewater
treatment plants in China which had reached high utilisation
levels to increase their combined capacity by 100,000 m3/day.
The plants, Changshu Wastewater Treatment Plant, Tiantai
Wastewater Treatment Plant, Yangzhou Wastewater
Treatment Plant, Wuxi Wastewater Treatment Plant,
Mingguang Wastewater Treatment Plant and Langfang
Wastewater Treatment Plant, are under the Galaxy
NewSpring portfolio. As at end 2012, the $88 million organic
expansion was more than 50% completed. When fully
completed, the total designed capacity of the entire Galaxy
NewSpring portfolio of plants will exceed 1 million m3/day.
Hyflux will continue to invest in the organic expansion of
Galaxy NewSprings portfolio of water projects. Our Group
will also invest more resources on industrial-based projects
where there are more available opportunities as well as in
the sales of membrane products and systems.
22
Middle East and North Africa

The Middle East and North Africa (MENA) region recorded
revenue of $28.9 million or 4% of Group revenue in FY2012
compared to a contribution of $114.4 million or 24% of
Group revenue in FY2011. This reflected the shift in the
geographical mix of projects as major desalination projects
in MENA were completed during the year. The rise of the
Arab Spring in 2011 and the ensuing political and social
upheavals in some countries also explained the lack of
opportunities in the region over the last two years.
However, we are now seeing signs of recovery in the region
due to pent-up demand. Water infrastructure projects that
have been put on hold have been revived and governments
in several Gulf and African countries are pushing forward with
their plans for large-scale desalination plants to meet rising
water demand for potable and industrial use.
Singapores Second Desalination Plant to Operate in 3Q2013

The 318,500 m3/day Tuaspring Desalination Plant in Tuas is scheduled
to start operations in the third quarter of 2013. Permanent Secretary
Mr Choi Shing Kwok of the Ministry of Environment and Water Resources
(second from right) visited the plant in November 2012 and was
impressed with the progress made in such a short period.

LEADING THE WAY
OPERATING
REVIEW
Organic Expansion of Six

Galaxy NewSpring Plants
Expansion and enhancement
works at six Galaxy NewSpring
wastewater treatment plants in
China which had reached high
utilisation levels would raise the
total capacity of these plants by
100,000 m3/day. At the end of
2012, some 50% of the works had
been completed.
INDUSTRY OUTLOOK
The global water industry went through a challenging year in FY2012 as the financial crisis
and the Arab Spring unrest continued to have an impact on projects. In particular, the
desalination industry experienced a dramatic contraction for the second year in a row due
to delays and cutbacks in desalination programmes. According to Desaldata, this trend is
expected to start to reverse in 2013 and the desalination market could deliver an average
compound annual growth rate of 12% over the next five years.
Water is a vital resource for human life and a wide range of activities. The need for clean, safe
water for domestic consumption and for use in industries and agriculture is tremendous.
However, water is becoming scarcer, exacerbated by a combination of climate change, rapid
population and economic growth. At the same time, industrialisation and urbanisation have
outpaced wastewater treatment and management in some countries. Wastewater is often
discharged into waterways even though it may not meet water quality discharge standards.
Such practices cause water pollution and great environmental stress for ecosystems.
Improving economic conditions and the growing urgency for water treatment solutions such
as wastewater treatment, water recycling and seawater desalination will drive investments in
water infrastructure projects. Countries and industries are increasingly seeking to develop
not only sustainable and reliable water sources but also effective wastewater treatment
systems that will secure water and the environment for generations to come.
As more countries look toward private funding for public sector water investments, BuildOperate-Transfer (BOT) opportunities will grow. This is an area which Hyflux has the knowhow and experience through the expertise we have developed in engineering, procurement
and construction, project management, operations and maintenance, and project financing
many water treatment plants around the world. We continue to actively pursue BOT water
infrastructure projects in Asia, the Middle East and other selective markets.
23
HYFLUX LTD
ANNUAL REPORT 2012
CORPORATE SOCIAL
RESPONSIBILITY
Hyflux's marching contingent celebrates Singapore's 47th birthday
The Hyflux team is a global, diverse and

passionate group. We focus on recruiting,
engaging, motivating and retaining
individuals who are passionate, willing
to dream big, to tread untried paths and
to learn along the journey.
HUMAN CAPITAL
Hyflux has a workforce of some 2,400 employees around
the world. We work to deliver solutions to improve lives
in the communities we serve and to translate science and
technology into lasting contributions that mitigate global
water scarcity.
The Hyflux team is a global, diverse and passionate group.
We focus on recruiting, engaging, motivating and retaining
individuals who are passionate, willing to dream big, to
tread untried paths and to learn along the journey. It is
this philosophy and enthusiasm that spurs us to constantly
innovate and to find creative ways of doing things better.
We recognise that our people are the foundation of the
company and believe that by creating spaces for interaction
and the exchange of ideas, ingenious and innovative
outcomes can result. With this in mind, we have created in
our new global headquarters, Hyflux Innovation Centre (HIC),
a seamless link between innovation, creativity, work and
play through facilities like a fully-equipped gym, staff lounge
and landscaped gardens. To meet the needs of working
parents among our employees, we have a child care centre
operating in our premises.
To promote family life, the highly popular Bring Your Child to
Work Day was held in October in conjunction with Childrens
24

LEADING THE WAY
CORPORATE SOCIAL
RESPONSIBILITY
GLOBAL WORKFORCE
Distribution by regions, 2012 (%)
1.1%
1.1%
3.5%
Distribution by gender, 2012 (%)
Singapore
Male
China
42.8%
51.5%
Female
25.9%
Malaysia
74.1%
India
MENA & Others
rotation and overseas postings to equip them with in-depth

experience and build skills that are crucial to our evergrowing operations and long-term success. We also run the
Hyflux Helping Hands Fund to provide financial assistance,
scholarships and bursaries to employees with financial
difficulties.
We engage employees through regular dialogue sessions
between senior management and employees, the company
intranet, workshops and work-life balance programmes.
Our employee-run club Hyfun, made up of representatives
from various departments, organises activities that foster
interaction and bonding.
Outstanding employees are recognised for the significant
contributions made to the company with the annual CEO
Award. Five employees from our office in Singapore
received the award in 2012.
"Bring Your Child To Work" Day
Day for the fifth consecutive year. A total of 54 children

followed their parents to the office and spent a thrilling
day being entertained with games, a magic show, balloon
sculpting, a movie and party food. Best of all for the children
and their parents, it was the opportunity of spending quality
time together on an otherwise work-day.
As Hyflux continues to evolve and grow, our employees will
have tremendous career development and progression
opportunities. We are committed to their learning and
development, and invest in a range of training programmes
relevant to employees at different career stages, job
ENVIRONMENT
Hyflux plays a part in sustainable development by helping
to meet the worlds growing water needs in environmentally
and socially responsible ways. Our water solutions ease
the strain on water resources by enabling industries and
communities to tap on non-traditional sources such as
used water and seawater, and limit environmental impact
by treating wastewater before it is released into the natural
environment.
At the same time, we are also conscious about water
consumption in our operations. To reduce the amount of
water consumed, innovative greywater recycling systems
25
HYFLUX LTD
ANNUAL REPORT 2012
CORPORATE SOCIAL
RESPONSIBILITY
using Hyfluxs proprietary membranes have been installed at
HIC and at Hyflux Production Hub to tap on wastewater for
re-use.
For our efforts in incorporating best practices in
environmental design and construction and the adoption
of green building technologies, including meeting the key
criteria of energy efficiency, water efficiency, environmental
protection, indoor environmental quality and other green
and innovative features that contribute to better building
performance, HIC was awarded the BCA Green Mark
Platinum Award in May 2012. The BCA Green Mark Platinum
Award meets the most stringent criteria set by the Building &
Construction Authority of Singapore.
We continuously seek to improve the efficiency of water
and wastewater treatment methods through innovative
design, layout and processes so that we can mitigate the
effects of our activities on the surroundings. By enhancing
the performance of our membrane products and water
treatment plants, we are able to deliver high quality water
for domestic and industrial use at better energy efficiency,
smaller plant footprint, lower chemical requirements, and
lower costs.
At Hyflux, we are passionate about continually creating
solutions to make water clean, safe, accessible and
affordable for all.
HEALTH & SAFETY
It is our mission to create an accident-free environment
and nurture a safety culture that keeps our employees and
contractors safe at every Hyflux facility and project. Our
approach is guided by a health and safety management
system which has been certified to OHSAS18001 standards.
With a workforce that comes from different cultures and
countries, it is important that the concept of safety is
easy to understand and follow and becomes a way of
life for everyone. Safety practices are integrated into our
work processes and emphasis is placed on personal and
collective accountability.
To support Hyfluxs aim of an accident-free environment,
our Environment, Safety and Health Committee continues
to promote initiatives to strengthen our safety culture and
reward positive safety performance and behaviour.
COMMUNITY
Hyflux seeks to contribute in meaningful ways to the local
communities in which we operate by supporting a variety
26
COMMUNITY INVESTMENT SPENDING,

2012 (%)
16%
Community
Education/
Entrepreneurship
7%
20%
57%
Environment
Others
of initiatives close to our heart: the environment, education,

entrepreneurship and community relations.
Hyflux believes that a good education will help to set the
foundation for the future. The knowledge and skills that
children learn in school today will determine whether we as
a society can meet our greatest challenges in the years to
come. We continued to partner educational institutions in
the sponsorship of scholarships, bursaries and book prizes
so that deserving students continued to have access to
quality education.
For the second year running, a Hyflux contingent marched
in the National Day Parade held at The Float @ Marina Bay
to celebrate our nations 47th birthday. For more than 20
members of our 42-strong contingent, it was their second
time marching under the Hyflux flag.
Some 49 runners among our employees participated in the
JP Morgan Chase Corporate Challenge for a 5.6 km race to
raise funds for charity.
In 2012, our corporate social responsibility efforts also took
on the added dimension of staff volunteerism.
During the year, some of our employees started volunteering
to read and organise activities for the KIDSRead programme
under the Asian Womens Welfare Associations (AWWA)
family service centre in our neighbourhood. The weekly
reading programme, targeted at pre-schoolers from less
advantaged families, gives them exposure to the English
language and seeks to cultivate their interest in reading at

LEADING THE WAY
CORPORATE SOCIAL
RESPONSIBILITY
Hyflux supports Walk for Rice to raise bowls of rice for the needy
Just as we have been able to grow through the opportunities that were presented
to us in our early days, we hope to reciprocate and make a difference in the lives of
others by devoting time and energy in addition to corporate philanthropy.
an early age. This meaningful project enables us to reach
out and engage the community around us, and we intend to
commit to it for a second year.
In September, we participated in the NTUC FairPrice Walk
for Rice @ Southeast. We organised a 4.3 km walk from
Hyflux Innovation Centre to the Singapore Flyer. For every
100 m that each of our staff walked, NTUC FairPrice donated
a bowl of rice to some 7,000 needy families. We covered a
total distance of 967.5 km and raised 9,675 bowls of rice.
Towards the end of the year, we also organised a charity
car wash together with Yong-en Care Centre. We managed
to raise more than $20,000 to support the activities of the
centre which runs a dementia day care centre, home care
and counseling services as well as seeing to the needs of
seniors and low-income families.
We will continue to foster the spirit of volunteerism among
our employees. Just as we have been able to grow through
the opportunities that were presented to us in our early days,
we hope to reciprocate and make a difference in the lives of
others by devoting time and energy in addition to corporate
philanthropy.
Hyflux employees wash cars for charity
27
HYFLUX LTD
ANNUAL REPORT 2012
INVESTOR
RELATIONS
Our investor relations efforts are guided by the principle of providing clear, consistent
and timely information about the companys performance, strategies and business
outlook to facilitate informed investment decisions, nurture continued confidence in
the company and foster strong, enduring relations with the investment community.
2012 was a year characterised by global economic volatility.
This led to delays in planned municipal infrastructure
investments for a second consecutive year.
During the year, Hyfluxs senior management and investor
relations team reassured and informed the investment
community of Hyfluxs financial discipline and typical
financing model for large-scale water projects. The strategic
decision to use corporate funding through a combination
of the proceeds from preference shares issued in 2011
and medium term notes for the Tuaspring project was
taken in anticipation of the tight project timeline to deliver
the desalination plant by 2013, as requested by PUB. This
corporate funding route was chosen to provide a suitable
bridge financing strategy until the desalination plant of the
Tuaspring project was close to completion. Hyflux is currently
in discussions with many financial institutions to put in place
long-term non-recourse project financing. When this project
financing exercise is completed, we will be in an even
stronger financial position to capture more opportunities in
the global water industry.
Our investor relations efforts are guided by the principle of
providing clear, consistent and timely information about the
companys performance, strategies and business outlook to
facilitate informed investment decisions, nurture continued
confidence in the company and foster strong, enduring
relations with the investment community.
28
Hyflux uses multiple communication channels such as

shareholder meetings, briefings to analysts, investors and
the media, conference calls, investor conferences and
the investor relations website to achieve this. All financial
information, announcements, briefing materials to analysts
and the media as well as annual reports are made available
on www.hyflux.com.
In FY2012, the directors have recommended a final dividend
of 2.50 cents per ordinary share. This, together with the interim
dividend of 0.70 cents paid earlier in the year, brings the
total dividend for FY2012 to 3.20 cents per ordinary share.

LEADING THE WAY
FINANCIAL STATEMENTS
30
DIRECTORS' REPORT
37
STATEMENT BY DIRECTORS
38
INDEPENDENT AUDITORS' REPORT
39
STATEMENTS OF FINANCIAL POSITION
40
CONSOLIDATED INCOME STATEMENT
41
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
42
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
46
CONSOLIDATED STATEMENT OF CASH FLOWS
48
NOTES TO THE FINANCIAL STATEMENTS
115
CORPORATE GOVERNANCE STATEMENT
126
SUPPLEMENTARY INFORMATION
127
STATISTICS OF SHAREHOLDINGS
129
SUBSTANTIAL ORDINARY SHAREHOLDERS
130
HYFLUX GROUP OF COMPANIES
132
CORPORATE INFORMATION
29
ANNUAL REPORT 2012

HYFLUX LTD
DIRECTORS' REPORT
We are pleased to submit this annual report to the members of the Company together with the audited financial statements for the
financial year ended 31 December 2012.
Directors
The directors in office at the date of this report are as follows:
Olivia Lum Ooi Lin
Teo Kiang Kok
Lee Joo Hai
Gay Chee Cheong
Simon Tay
Gary Kee Eng Kwee
Executive Chairman and Group CEO
Directors interests
According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the Act),
particulars of interests of directors who held office at the end of the financial year (including those held by their spouses and infant
children) in shares, debentures, warrants and share options in the Company are as follows:
Direct interest
Name of director and
corporation in which interests
are held
At beginning
of the year
At end
of the year
Deemed interest
At
At
21 January At beginning
At end
21 January
2013
of the year
of the year
2013
252,351,211
1,000,000
842,343
267,351,211
1,000,000
926,718
267,351,211
1,000,000
926,718
15,000,000
375,000
180,000
375,000
180,000
375,000
180,000
8,020
3,000
12,000
1,000
8,020
3,000
12,000
1,000
8,020
3,000
12,000
1,000
20,000
20,000
20,000
The Company
Ordinary shares
Olivia Lum Ooi Lin
Teo Kiang Kok
Gay Chee Cheong
Preference shares
Olivia Lum Ooi Lin
Teo Kiang Kok
Gay Chee Cheong
30

LEADING THE WAY
DIRECTORS' REPORT
Direct interest
Name of director and
corporation in which interests
are held
Deemed interest
At
At
21 January At beginning
At end
21 January
2013
of the year
of the year
2013
At beginning
of the year
At end
of the year
6,750,000
425,000
425,000
425,000
678,125
425,000
6,750,000
425,000
425,000
425,000
593,750
425,000
6,750,000
425,000
425,000
425,000
593,750
425,000
8,598,000
8,598,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
8,598,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
The Company
Share options (2001 Scheme)
Olivia Lum Ooi Lin
Teo Kiang Kok
Lee Joo Hai
Gay Chee Cheong
Share options (2011 Scheme)
Olivia Lum Ooi Lin
Teo Kiang Kok
Lee Joo Hai
Gay Chee Cheong
Simon Tay
Gary Kee Eng Kwee
By virtue of Section 7 of the Act, Olivia Lum Ooi Lin is deemed to have interests in the other subsidiaries of the Company, at the
beginning and at the end of the financial year.
Except as disclosed in this report, no director 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.
There were no changes in any of the above mentioned interests in the Company between the end of the financial year and 21
January 2013, except as disclosed above.
Except as disclosed under the Share Options section of this report, 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.
Except salaries, bonuses and fees and those benefits that are disclosed in this report and in note 32 to the financial statements,
since the end of the last financial year, no director has received or become entitled to receive, a benefit by reason of a contract
made by the Company or a related corporation with the director, or with a firm of which he is a member, or with a company in which
he has a substantial financial interest.
31
ANNUAL REPORT 2012

HYFLUX LTD
DIRECTORS' REPORT
Share options
The Hyflux Employees Share Option Scheme (the 2001 Scheme) of the Company was approved and adopted by its members at an
Extraordinary General Meeting held on 27 September 2001.
On 24 November 2003, the members of the Company approved a modification to the 2001 Scheme which allowed Olivia Lum Ooi
Lin, Executive Chairman and Group CEO, and a substantial shareholder of the Company, to participate in the 2001 Scheme. The
maximum entitlement of Olivia Lum Ooi Lin is 10% of the total number of shares which may be issued by the Company under the
2001 Scheme.
The 2001 Scheme expired on 26 September 2011.
On 27 April 2011, the members of the Company approved the implementation of new share option scheme (the 2011 Scheme)
to replace the 2001 Scheme that expired on 26 September 2011 and allowed Olivia Lum Ooi Lin, Executive Chairman and Group
CEO, and a substantial shareholder of the Company, to participate in the 2011 Scheme. The implementation of the 2011 Scheme
and replacement of expired scheme do not affect the rights of holders of the options under the expired scheme. The maximum
entitlement of Olivia Lum Ooi Lin is 10% of the total number of shares which may be issued by the Company under the 2011
Scheme. The aggregate number of scheme shares available to Olivia Lum Ooi Lin and her associates (as defined in the Listing
Manual of Singapore Exchange Securities Trading Limited (SGX-ST's Listing Manual)) shall not exceed 25% of the total number of
scheme shares available under the 2011 Scheme.
The 2011 Scheme is administered by the Companys Remuneration Committee. It has been in force since 27 September 2011 and
shall expire on 26 September 2021.
32
0.2749
0.3624
0.3776
0.3997
0.4835
0.7054
0.6798
0.7085
1.2400
1.5378
1.6995
1.7671
1.7747
1.5747
1.5813
1.7493
1.7387
1.8613
2.4187
0.9813
1.2720
1.1987
2.0733
2.3600
2.3600
2.1907
1.8920
1.8920
1.4660
1.4690
2011 Scheme
18/10/2011
05/03/2012
2001 Scheme
11/01/2002
28/03/2002
08/07/2002
07/01/2003
07/04/2003
16/10/2003
08/12/2003
29/12/2003
07/02/2005
09/05/2005
01/06/2005
08/06/2005
28/03/2006
18/10/2006
07/12/2006
05/04/2007
23/05/2007
25/09/2007
26/05/2008
31/10/2008
09/01/2009
15/05/2009
22/10/2009
26/02/2010
26/02/2010
16/11/2010
04/03/2011
04/03/2011
Date of grant
of options
8,598,000
41,713,681
125
797
125
750
18,509
255,625
50,000
54,000
1,355,250
6,750,000
27,000
40,500
165,000
1,470,000
1,698,000
390,000
30,000
2,289,000
1,950,000
4,376,000
750,000
405,000
225,000
1,665,000
2,250,000
2,025,000
4,575,000
300,000
Options
outstanding
Exercise
at
price
1 January
per share
2012
7,305,000
7,305,000
Options
granted
(50,000)
(50,000)
Options
granted but
not
accepted
(478,875)
(1,000)
(85,375)
(50,000)
(73,500)
(239,000)
(30,000)
-
Options
exercised
(350,000)
(3,072,329)
(125)
(797)
(125)
(375)
(1,157)
(750)
(180,000)
(261,000)
(90,000)
(75,000)
(390,000)
(153,000)
(270,000)
(45,000)
(375,000)
(345,000)
(485,000)
(50,000)
Options
forfeited
8,598,000
6,905,000
45,417,477
375
16,352
170,250
53,250
1,101,750
6,750,000
27,000
40,500
165,000
1,470,000
1,437,000
300,000
30,000
2,214,000
1,560,000
3,984,000
750,000
105,000
225,000
1,620,000
1,875,000
1,680,000
4,090,000
250,000
Options
outstanding
at 31
December
2012
1
80
376
2
2
5
3
22
1
1
1
6
3
35
1
1
25
25
60
1
2
2
7
5
21
59
5
Number of
holders as
at 31
December
2012
18/10/2012 17/10/2021
05/03/2013 04/03/2022
11/01/2003 10/01/2012
28/03/2003 27/03/2012
08/07/2003 07/07/2012
07/01/2004 06/01/2013
07/04/2004 06/04/2013
16/10/2004 15/10/2013
08/12/2004 07/12/2013
29/12/2004 28/12/2013
07/02/2006 06/02/2015
09/05/2006 08/05/2015
01/06/2006 31/05/2015
08/06/2006 07/06/2015
28/03/2007 27/03/2016
18/10/2007 16/10/2016
07/12/2007 06/12/2016
05/04/2008 04/04/2017
23/05/2008 22/05/2017
25/09/2008 24/09/2017
26/05/2009 25/05/2018
31/10/2009 30/10/2018
09/01/2010 08/01/2019
15/05/2010 14/05/2019
22/10/2010 21/10/2019
26/02/2011 25/02/2020
26/02/2011 25/02/2015
16/11/2011 15/11/2020
04/03/2012 03/03/2021
04/03/2012 03/03/2016
Exercise period
At the end of the financial year, details of the options granted under the 2001 and 2011 Schemes on the unissued ordinary shares of the Company, are as
follows:

LEADING THE WAY
DIRECTORS' REPORT
33
ANNUAL REPORT 2012

HYFLUX LTD
DIRECTORS' REPORT
Except as discussed above, there were no unissued shares of the Company or its subsidiaries under options granted by the
Company or its subsidiaries as at the end of the financial year.
Details of options granted to directors of the Company under the 2001 Scheme and 2011 Scheme (collectively as the Schemes) are
as follows:
Name of director
Aggregate
Aggregate
Options
options
options
granted for
granted since
exercised since
Aggregate
the financial commencement of
commencement
options
year ended
Schemes to
of Schemes to outstanding as at
31 December 2012 31 December 2012 31 December 2012 31 December 2012
2001 Scheme
Olivia Lum Ooi Lin
Teo Kiang Kok
Lee Joo Hai
Gay Chee Cheong
Total
6,750,000
800,000
800,000
725,000
1,409,375
425,000
10,909,375
(375,000)
(375,000)
(300,000)
(815,625)
(1,865,625)
6,750,000
425,000
425,000
425,000
593,750
425,000
9,043,750
2011 Scheme
Olivia Lum Ooi Lin
Teo Kiang Kok
Lee Joo Hai
Gay Chee Cheong
Simon Tay
Gary Kee Eng Kwee
Total
50,000
50,000
50,000
50,000
50,000
50,000
50,000
350,000
8,598,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
8,948,000
8,598,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
8,948,000
Except as disclosed in this report, since the commencement of the Schemes to the end of the financial year:

No options have been granted to the controlling shareholders of the Company or their associates;
No participant has been granted 5% or more of the total options available under the Schemes;
No options have been granted to directors and employees of the holding company and its related corporations under the
Schemes;
No options that entitle the holders of the options to participate, by virtue of such holding, to any share issue of any other
corporation have been granted; and
The exercise price of the options is set at the market price, as defined in the Schemes, at the time of grant. No options have
been granted at a discount.
34

LEADING THE WAY
DIRECTORS' REPORT
Audit Committee
The members of the Audit Committee at the date of this report are:
Lee Joo Hai (Chairman), non-executive independent director
Gay Chee Cheong, non-executive independent director
Rajsekar Kuppuswami Mitta, non-executive independent director
Gary Kee Eng Kwee, non-executive non-independent director
The members of the Audit Committee, collectively, have expertise and extensive experience in accounting, financial management
and business, and are qualified to discharge the Audit Committees responsibilities.
The primary functions of the Audit Committee are as follows:
1.
assists the Board in discharging its statutory responsibilities on financial and accounting matters;
2.
reviews the financial and operating results and accounting policies of the Group;
3.
reviews significant financial reporting issues and judgements relating to financial statements for each financial year, interim
and annual results announcement before submission to the Board for approval;
4.
reviews the adequacy of the Companys internal control (financial and operational) and risk management policies and
systems established by the management;
5.
reviews the audit plans and reports of the external and internal auditors and considers the effectiveness of the actions taken
by the management on the auditors recommendations;
6.
appraises and reports to the Board on the audits undertaken by the external and internal auditors, the adequacy of the
disclosure of information, and the appropriateness and quality of the system of management and internal controls;
7.
reviews the independence of external auditors annually and considers the appointment or re-appointment of external
auditors, reviews the level of audit and non-audit fees and matters relating to the resignation or removal of the auditors and
approves the remuneration and terms of engagement of the external auditors; and
8.
reviews interested person transactions, as defined in the SGX-ST's Listing Manual.
The Audit Committee has held 4 meetings since the last directors report. In fulfilling its responsibilities, the Audit Committee
receives regular reports from the management. The Audit Committee has full access to and co-operation of the management and
meets with KPMG LLP in private at least once a year, and more frequently if necessary.
35
ANNUAL REPORT 2012

HYFLUX LTD
DIRECTORS' REPORT
The Audit Committee has explicit authority within the scope of its responsibilities to seek any information it requires or investigate
any matter within its terms of reference. The Audit Committee has adequate resources to enable it to discharge its responsibilities
properly.
The Board has put in place a confidential communication programme as endorsed by the Audit Committee. Employees may, in
confidence, raise concerns about possible corporate improprieties in matters of financial reporting or other matters and to ensure
that arrangements are in place for the independent investigations of such matters and for appropriate follow-up actions. The
details of the confidential communication policies and arrangements have been made available to all employees.
The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to the
Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming Annual General
Meeting of the Company.
In appointing our auditors for the Company, subsidiaries and significant associates, we have complied with Rules 712, 715 and 716
of the SGX-ST's Listing Manual.
Auditors
The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.
On behalf of the Board of Directors
Olivia Lum Ooi Lin

Teo Kiang Kok

Director
25 March 2013
36

LEADING THE WAY
STATEMENT BY DIRECTORS
In our opinion:
(a)
the financial statements set out on pages 39 to 114 are drawn up so as to give a true and fair view of the state of affairs of
the Group and of the Company as at 31 December 2012 and the results, 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
(b)
at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they fall due.
The Board of Directors has, on the date of this statement, authorised these financial statements for issue.
On behalf of the Board of Directors
Olivia Lum Ooi Lin

Teo Kiang Kok

Director
25 March 2013
37
ANNUAL REPORT 2012

HYFLUX LTD
INDEPENDENT AUDITORS' REPORT

MEMBERS OF THE COMPANY
HYFLUX LTD
Report on the financial statements

We have audited the accompanying financial statements of Hyflux Ltd (the Company) and its subsidiaries (the Group), which
comprise the statements of financial position of the Group and the Company as at 31 December 2012, the income statement,
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 39 to 114.
Managements 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 profit and loss accounts and balance sheets 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 auditors 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 entitys 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 entitys 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 to give a true and fair
view of the state of affairs of the Group and of the Company as at 31 December 2012 and the results, 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 subsidiaries
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
Certified Public Accountants
Singapore
25 March 2013
38

LEADING THE WAY
STATEMENTS OF FINANCIAL POSITION

As at 31 December 2012
Group
Note
Company
2012
2011
$000
$000
2012
$000
2011
$000
4
5
207,071
42,444
188,571
43,876
6
7
8
9
10
11
12
360,366
104,092
704,811
14,594
2,050
1,435,428
154,937
108,887
418,320
15,552
2,829
932,972
177,420
3,125
14,109
760,736
955,390
169,420
3,125
13,704
445,312
631,561
13
14
10
11
15
119,059
32,456
12,548
209,621
541,232
914,916
176,910
24,195
4,937
231,093
662,358
1,099,493
490,628
176,216
666,844
729,141
96,407
825,548
16
17
318,205
64,435
9,152
391,792
227,840
118,121
10,262
356,223
34,813
10,000
2,868
47,681
135,567
88,438
2,983
226,988
523,124
743,270
619,163
598,560
1,054,306
27,217
1,081,523
712,301
28,374
740,675
908,519
908,519
573,811
573,811
Net assets
877,029
935,567
666,034
656,310
Equity
Share capital
Reserve for own shares
Capital reserve
Foreign currency translation reserve
Hedging reserve
Employees share option reserve
Retained earnings
Total equity attributable to owners of the Company
Non-controlling interests
Total equity
605,196
(51,484)
9,094
(30,480)
656
22,457
305,154
860,593
16,436
877,029
604,740
(4,461)
6,467
3,635
(3,996)
19,647
294,559
920,591
14,976
935,567
605,196
(51,484)
1,858
22,457
88,007
666,034
666,034
604,740
(4,461)
796
19,647
35,588
656,310
656,310
Non-current assets
Property, plant and equipment
Intangible assets
Intangible assets arising from service concession
arrangements
Investments in subsidiaries
Investments in joint ventures
Investments in associates
Financial receivables
Trade and other receivables
Deferred tax assets
Total non-current assets
Current assets
Gross amounts due for contract work
Inventories
Trade and other receivables, including derivatives
Cash and cash equivalents
Total current assets
Current liabilities
Trade and other payables, including derivatives
Loans and borrowings
Tax payable
Total current liabilities
Net current assets
Non-current liabilities
Deferred tax liabilities
Total non-current liabilities
17
12
18
The accompanying notes form an integral part of these financial statements.
39
ANNUAL REPORT 2012

HYFLUX LTD
CONSOLIDATED INCOME STATEMENT

Year ended 31 December 2012
Revenue
Other income
Changes in inventories of finished goods and work-in-progress
Raw materials and consumables used and subcontractors cost
Staff costs
Depreciation, amortisation and impairment
Other expenses
Finance costs
Share of profit of associates, net of income tax
Profit before income tax
Tax expense
Profit for the year
Note
2012
$000
21
682,384
6,964
792
(413,496)
(85,924)
(29,392)
(60,123)
(28,460)
4,253
76,998
(12,285)
64,713
481,975
8,064
(408)
(259,473)
(60,040)
(36,637)
(50,067)
(22,597)
1,226
62,043
(6,318)
55,725
60,994
3,719
64,713
53,027
2,698
55,725
4.43
4.42
4.30
4.28
22
23
24
Profit attributable to:

Owners of the Company
Profit for the year
Basic earnings per share
Diluted earnings per share
40
25
25
2011
$000

LEADING THE WAY
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Profit for the year

Other comprehensive income
Foreign currency translation differences for foreign operations
Share of hedging reserve of associates
Effective portion of changes in fair value of cash flow hedges
Net change in fair value of cash flow hedges transferred to profit or loss
Other comprehensive income for the year, net of income tax
Total comprehensive income for the year
Total comprehensive income attributable to:
Owners of the Company
Total comprehensive income for the year
2012
$000
2011
$000
64,713
55,725
(35,609)
499
3,001
1,152
(30,957)
33,756
18,831
342
(778)
18,395
74,120
31,072
2,684
33,756
70,863
3,257
74,120
41
42
(4,461)
604,740
6,467
(34,574)
(34,574)
3,635
Foreign
currency
Capital translation
reserve
reserve
$000
$000
Other comprehensive
income
Foreign currency
translation differences
for foreign operations
Share of hedging reserve
of associates
Effective portion of
changes in fair value of
cash flow hedges
Net change in fair value
of cash flow hedges
transferred to profit or
loss
Total comprehensive
income for the year
Total comprehensive
income for the year
Profit for the year
At 1 January 2012
Group
Share
capital
$000
Reserve
for own
shares
$000
4,652
1,152
3,001
499
(3,996)
19,647
Employees
share
Hedging
option
reserve
reserve
$000
$000
60,994
60,994
294,559
31,072
1,152
3,001
499
(34,574)
60,994
920,591
Total
equity
attributable
to owners
Retained
of the
earnings
Company
$000
$000
Total
equity
$000
64,713
2,684
33,756
1,152
3,001
499
(1,035) (35,609)
3,719
14,976 935,567
Noncontrolling
interests
$000
ANNUAL REPORT 2012

HYFLUX LTD
18
(47,023)
456
(51,484)
(47,023)
456
605,196
Reserve
for own
shares
$000
9,094
2,627
2,753
(126)
(30,480)
459
459
At 31 December 2012
Transactions with
owners, recognised
directly in equity
Contributions by and
distributions to
owners
Dividends paid/
payable
Issue of shares for cash
under Employees
Share Option
Schemes
Own shares acquired
Value of employee
services received for
issue of share options
Liquidation of
subsidiary
Transfer to capital
reserve
Total transactions
with owners
Group
Note
Share
capital
$000
Foreign
currency
Capital translation
reserve
reserve
$000
$000
656
22,457
2,810
2,810
Employees
share
Hedging
option
reserve
reserve
$000
$000
305,154
(50,399)
(2,753)
(47,646)
860,593
(91,070)
333
2,810
456
(47,023)
(47,646)
Total equity
attributable
to owners
Retained
of the
earnings
Company
$000
$000
Total
equity
$000
333
2,810
456
(47,023)
16,436
877,029
(1,224) (92,294)
(1,224) (48,870)
Noncontrolling
interests
$000

LEADING THE WAY
43
44
(1,292)
207,474
Reserve
for own
shares
$000
4,752
18,272
18,272
(14,637)
Other comprehensive
income
Foreign currency
translation differences
for foreign operations
Share of hedging reserve
of associates
Effective portion of
changes in fair value of
cash flow hedges
Total comprehensive
income for the year
Total comprehensive
income for the year
Profit for the year
At 1 January 2011
Group
Share
capital
$000
Foreign
currency
Capital translation
reserve
reserve
$000
$000
(436)
(778)
342
(3,560)
18,609
Employees
share
Hedging
option
reserve
reserve
$000
$000
53,027
53,027
291,155
70,863
(778)
342
18,272
53,027
502,501
3,257
559
2,698
12,006
Total equity
attributable
to owners
NonRetained
of the controlling
earnings
Company
interests
$000
$000
$000
74,120
(778)
342
18,831
55,725
514,507
Total
equity
$000
ANNUAL REPORT 2012

HYFLUX LTD
(3,169)
(3,169)
4,697
392,569
397,266
604,740
At 31 December 2011
6,467
1,715
1,715
3,635
(4,461)
18
Reserve
for own
shares
$000
Transactions with
owners, recognised
directly in equity
Contributions by and
distributions to
owners
Dividends paid/ payable
Issue of shares for cash
under Employees
Share Option Scheme
Issue of Class A
Cumulative Perpetual
Preference Shares
(CPS)
Own shares acquired
Value of employee
services received for
issue of share options
Transfer to capital
reserve
Capital contributions
from non-controlling
interests of a
subsidiary
Liquidation of
subsidiaries
Total transactions with
owners
Group
Note
Share
capital
$000
(3,996)
Foreign
currency
Capital translation Hedging
reserve
reserve reserve
$000
$000
$000
19,647
1,038
1,038
Employees
share
option
reserve
$000
294,559
(49,623)
(1,715)
(47,908)
920,591
347,227
1,038
392,569
(3,169)
4,697
(47,908)
Total equity
attributable
to owners
Retained
of the
earnings
Company
$000
$000
(337)
50
1,038
392,569
(3,169)
4,697
(47,908)
Total
equity
$000
14,976
935,567
(287) 346,940
(337)
50
Noncontrolling
interests
$000

LEADING THE WAY
45
ANNUAL REPORT 2012

HYFLUX LTD

Note
Cash flows from operating activities

Adjustments for:
Allowance for inventory obsolescence
Amortisation of transaction costs related to borrowings
Employees share option expense
Fair value loss on derivative financial instruments
Finance costs
Financial receivables written off
Gain on sale of property, plant and equipment
Impairment of trade and other receivables
Intangible assets written off
Interest income
Loss/(gain) on liquidation of subsidiaries
Change in inventories
Change in gross amounts due for contract work
Change in trade and other receivables
Change in trade and other payables
Cash from operating activities before service concession arrangement projects
Change in financial receivables from service concession arrangements
Change in intangible assets arising from service concession arrangements
Cash used in operating activities after service concession arrangement projects
Income tax paid
Net cash used in operating activities
46
14
2012
$000
2011
$000
76,998
62,043
644
636
29,392
2,810
895
28,460
(5,223)
520
35
(3,312)
603
(4,253)
128,205
(9,764)
58,187
22,494
71,776
270,898
(294,102)
(209,274)
(232,478)
(11,398)
(243,876)
113
36,637
1,038
594
22,597
3,056
(11,899)
2,889
25
(3,041)
(296)
(1,226)
112,530
1,576
75,747
(49,861)
25,595
165,587
(194,308)
(20,052)
(48,773)
(7,373)
(56,146)

LEADING THE WAY

Note
2012
$000
2011
$000
(5,901)
(39,878)
1,770
1,757
7,835
(34,417)
(5,094)
(53,366)
(33,079)
50
(427)
1,470
2,657
(178)
2,429
26,280
(59,258)
Cash flows from financing activities

Dividends paid
(Increase)/decrease in deposits pledged
Interest paid
Net proceeds from CPS issue
Proceeds from borrowings
Proceeds from exercise of share options
Purchases of treasury shares
Repayment of borrowings
Net cash from financing activities
(47,646)
(9,589)
(36,191)
653,842
456
(47,023)
(371,619)
142,230
(47,908)
204
(17,702)
392,569
605,085
4,697
(3,169)
(399,125)
534,651
Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at 1 January
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at 31 December
(136,063)
641,415
(15,165)
490,187
419,247
222,082
86
641,415
Cash flows from investing activities

Acquisition of intangible assets
Acquisition of property, plant and equipment
Additional investment in an associate
Capital contribution from non-controlling interests of a subsidiary
Change in amounts due from related parties (non-trade)
Dividends received from associates
Interest received
Net cash outflow from liquidation of subsidiaries
Proceeds from sale of other investments
Proceeds from sale of property, plant and equipment
Net cash used in investing activities
15
47
ANNUAL REPORT 2012

HYFLUX LTD
These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Board of Directors on 25 March 2013.
Domicile and activities
Hyflux Ltd (the Company) is incorporated in the Republic of Singapore. The address of the Companys registered office is
Hyflux Innovation Centre, 80 Bendemeer Road, Singapore 339949.
The financial statements of the Group as at and for the year ended 31 December 2012 comprise the Company and its
subsidiaries (together referred to as the Group and individually as Group entities) and the Groups interests in associates
and joint ventures.
The principal activities of the Company are those relating to investment holding.
The principal activities of the subsidiaries comprise the following:
Water
-
Seawater desalination, raw water purification, wastewater cleaning, water recycling, water reclamation and ultra pure
water production for municipal and industrial clients as well as home consumer filtration and purification products;
and
Design, building and sale of water treatment plants, seawater desalination plants, wastewater treatment plants and
water recycling plants under service concession arrangements.
Renewable Resources Management

-
-
Development of membrane applications in resource recovery, waste recycling and energy reclamation, including
applications such as used oil recovery and recycling;
Development and commercialisation of specialty materials, such as L-lactic acid from natural renewable resources;
and
Separation, concentration and purification treatments for manufacturing process streams.
-

Energy

Design, building and operation of power plants and trading in the electricity markets.
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 for derivative financial instruments which
are measured at fair value.
48

LEADING THE WAY
2.3
Functional and presentation currency
These financial statements are presented in Singapore dollars, which is the Companys functional currency. Other significant
entities within the Group have Chinese Renminbi, US dollars and Algerian Dinar as their functional currency. All financial
information presented in Singapore dollars has been rounded to the nearest thousand, unless otherwise stated.
2.4 Use of estimates and judgements

The preparation of the 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.
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 is included in note 5 on capitalisation of development costs.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment
within the next financial year are included in the following notes:
Note 4
Note 5
Notes 4 and 5
Note 20
Note 31
residual values and useful lives of property, plant and equipment;

useful lives and recoverability of intangible assets;
key assumptions used in discounted cash flow projections;
recoverability of trade and other receivables; and
contingencies.
2.5
Changes in accounting policies
The Group has adopted all the new or revised FRSs that became mandatory from 1 January 2012. The adoption of these new
FRSs has no significant impact to the Group.
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, except as explained in note 2.5 which addresses changes in accounting
policies.
3.1
Basis of consolidation
Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which
control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to
obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are
currently exercisable.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such
amounts are generally recognised in profit or loss.
49
ANNUAL REPORT 2012

HYFLUX LTD
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration 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 acquirees employees
(acquirees awards) and relate to past services, then all or a portion of the amount of the acquirers replacement awards
is included in measuring the consideration transferred in the business combination. This determination is based on the
market-based value of the replacement awards compared with the market-based value of the acquirees awards and the
extent to which the replacement awards relate to past and/or future service.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the
acquirees net assets in the event of liquidation are measured either at fair value or at the non-controlling interests
proportionate share of the recognised amounts of the acquirees identifiable net assets, at the acquisition date. The
measurement basis taken is elected on a transaction-by-transaction basis. All other non-controlling interests are measured
at acquisition-date fair value or, when applicable, on the basis specified in another standard.
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.
Acquisition of non-controlling interests
Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and
therefore no goodwill is recognised as a result. Adjustments to non-controlling interests arising from transactions that do
not involve the loss of control are based on a proportionate amount of the net assets of the subsidiary.
Subsidiaries

Subsidiaries are entities controlled by the Group. 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.
Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and
the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised
in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the
date that control is lost. Subsequently, it is accounted for as a jointly-controlled entity, an equity-accounted investee or as
an available-for-sale financial asset depending on the level of influence retained.
Joint ventures
Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement
and requiring unanimous consent for strategic financial and operating decisions. Joint ventures are accounted for using
proportionate consolidation. The financial statements of joint ventures are proportionately consolidated from the date
that joint control commences until the date that joint control ceases. The accounting policies of joint ventures have been
changed where necessary to align them with the policies adopted by the Group.
50

LEADING THE WAY
Associates

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating
policies of these entities. Significant influence is presumed to exist when the Group holds between 20% and 50% of voting
power of another entity.
Associates are accounted for using the equity method and are recognised initially at cost. The cost of investments
includes transaction costs. The consolidated financial statements include the Groups share of the profit or loss and other
comprehensive income of associates, after adjustments to align the accounting policies with those of the Group, from the
date that significant influence commences until the date that significant influence ceases.
When the Groups share of losses exceeds its interest in an associate, the carrying amount of that interest, including any
long-term investments, 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 associates operations or has made payments on behalf of the associate.
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 joint ventures are eliminated to the extent of the Groups interest in the
joint ventures. Unrealised losses are eliminated in the same way as unrealised gains except that losses are recognised
immediately when they represent a reduction in the net realisable value of assets or an impairment loss. Balances with joint
ventures are eliminated to the extent of the Groups interest in the joint ventures.
Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Groups
interest in the associates. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that
there is no evidence of impairment.
Accounting for subsidiaries, joint ventures and associates in the separate financial statements
Investments in subsidiaries, joint ventures and associates are stated in the Companys 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 the exchange
rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of 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 the exchange rate at the date of the transaction.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences which are
recognised in other comprehensive income arising on the retranslation of available-for-sale equity instruments (except
on impairment in which case foreign currency differences that have been recognised in other comprehensive income are
reclassified to profit or loss); and qualifying cash flow hedges to the extent the hedge is effective.
51
ANNUAL REPORT 2012

HYFLUX LTD
Foreign operations
The assets and liabilities of foreign operations, excluding goodwill and fair value adjustments arising on acquisition, are
translated to Singapore dollars at exchange rates at the end of the reporting date. The income and expenses of foreign
operations are translated to Singapore 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 end of the reporting period. 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 (translation reserve) in equity. However, if the foreign operation is a non-wholly-owned subsidiary,
then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a
foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the
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 as
equity in the translation reserve.
3.3
Financial instruments
Non-derivative financial assets
The Group initially recognises loans and receivables and deposits 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 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. 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 classifies non-derivative financial assets into the following categories: loans and receivables and available-forsale financial assets.
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, trade and other receivables, including service concession
receivables, and gross amounts due from contract work.
52

LEADING THE WAY
Cash and cash equivalents comprise cash balances and bank deposits.
For the purpose of the statement of cash flows, pledged deposits are excluded whilst bank overdrafts that are repayable in
demand and that form an integral part of the Groups cash management are included in cash and cash equivalents.
Service concession arrangements
The Group recognises a financial asset arising from a service concession arrangement when it has an unconditional
contractual right to receive cash or another financial asset from or at the direction of the grantor for the construction or
upgrade services provided. Such financial assets are measured at fair value upon initial recognition. Subsequent to initial
recognition, the financial assets are measured at amortised cost.
If the Group is paid for the construction services partly by a financial asset and partly by an intangible asset, then each
component of the consideration is accounted for separately and is recognised initially at the fair value of the consideration
(see also note 3.5).
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not
classified in any of the above categories of financial assets. Available-for-sale financial assets are recognised initially at fair
value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and
changes therein, other than impairment losses and foreign currency differences on available-for-sale debt instruments,
are recognised in other comprehensive income and presented in the fair value reserve in equity. When an investment is
derecognised, the gain or loss accumulated in equity is reclassified to profit or loss.
Non-derivative financial liabilities
The Group initially recognised debt securities issued and subordinated liabilities on the date that they are originated.
Financial liabilities for contingent consideration payable in a business combination are recognised at the acquisition date.
All other 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 expired.
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.
53
ANNUAL REPORT 2012

HYFLUX LTD
Intra-group financial guarantees
Financial guarantees are financial instruments issued by the Group 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 guarantees 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 and share
options are recognised as a deduction from equity, net of any tax effects.
Preference share capital
Preference share capital is classified as equity as it is non-redeemable, or redeemable only at the Companys option, and
any dividends are discretionary. Dividends thereon are recognised as distributions within equity upon approval by the
Board of Directors.
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 transferred to/from retained earnings.
Derivative financial instruments, including hedge accounting
The Group holds derivative financial instruments to hedge its foreign currency risk exposures. Embedded derivatives
are separated from the host contract and accounted for separately if the economic characteristics and risks of the host
contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded
derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through
profit or loss.
On initial designation of the derivative as the hedging instruments, the Group formally documents the relationship between
the hedging instrument and the hedged item, including the risk management objectives and strategy in undertaking the
hedge transaction and the hedged risk, together with the methods that will be used to assess the effectiveness of the
hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an
ongoing basis, of whether the hedging instruments are expected to be highly effective in offsetting the changes in the fair
value or cash flows of the respective hedged items attributable to the hedged risk, and whether the actual results of each
hedge are within a range of 80% - 125%. For a cash flow hedge of a forecast transaction, the transaction should be highly
probable to occur and should present an exposure to variations in cash flows that could ultimately affect reported profit or
loss.
54

LEADING THE WAY
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss as incurred.
Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as described
below.
Cash flow hedges
When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a
particular risk associated with a recognised asset or liability or a highly probable forecast transaction that could affect profit
or loss, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income
and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is
recognised immediately in profit or loss.
When the hedged item is a non-financial asset, the amount accumulated in equity is included in the carrying amount of the
asset when the asset is recognised. In other cases, the amount accumulated in equity is reclassified to profit or loss in the
same period that the hedged item affects profit or loss. If the hedging instrument no longer meets the criteria for hedge
accounting, expires or is sold, terminated or exercised, or the designation is revoked, then hedge accounting is discontinued
prospectively. If the forecast transaction is no longer expected to occur, then the balance in equity is reclassified to profit
or loss.
Separable embedded derivatives
Changes in the fair value of separated embedded derivatives are recognised immediately in profit or loss.
Other non-trading derivatives
When a derivative financial instrument is not designated in a hedge relationship that qualifies for hedge accounting, all
changes in its fair value are recognised immediately in profit or loss.
3.4 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. The cost of self-constructed assets
includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working
condition for their intended use, when the Group has an obligation to move the asset or restore the site, an estimate of the
costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing
costs.
Cost may also include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases
of property, plant and equipment. 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 and loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from
disposal with the carrying amount of property, plant and equipment, and is recognised net within other expenses in profit
or loss.
55
ANNUAL REPORT 2012

HYFLUX LTD
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 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, since this most closely reflects the expected pattern of consumption of the future
economic benefits embodied in the 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. Construction-inprogress is not depreciated.
Depreciation is recognised from the date that the property, plant and equipment are installed and are ready for use, or in
respect of internally constructed assets, from the date that the asset is completed and ready to use.
The estimated useful lives for the current and comparative years are as follows:
Plant and machinery

Motor vehicles
Computers
Office equipment
Leasehold properties and improvements
Furniture and fittings
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if
appropriate.
3.5
Intangible assets
-
-
-
-
-
-
4 to 10 years
4 to 5 years
1 to 5 years
4 to 5 years
4 to 5 years or over the lease period ranging from 5 to 36 years
4 to 5 years
Goodwill

Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. The Group measures goodwill at
the acquisition date as:

56
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 existing equity interest in the acquiree,
over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

LEADING THE WAY
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 investee.
Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and
understanding, is recognised in profit or loss as incurred.
Development activities involve a plan or design for the production of new or substantially improved products and processes.
Development expenditure is capitalised only if development costs can be measured reliably, the product or process is
technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient
resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials,
direct labour, overhead costs that are directly attributable to preparing the asset for its intended use, and capitalised
borrowing costs. Other development expenditure is recognised in profit or loss as incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment
losses.
The Group recognises an intangible asset arising from a service concession arrangement when it has a right to charge
for usage of the concession infrastructure. An intangible asset received as consideration for providing construction or
upgrade services in a service concession arrangement is measured at fair value upon initial recognition. Subsequent to
initial recognition the intangible asset is measured at cost, which includes capitalised borrowing costs, less accumulated
amortisation and accumulated impairment losses.
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.
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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, since this most closely reflects the expected pattern
of consumption of the future economic benefits embodied in the asset. The estimated useful lives for the current and
comparative years are as follows:
Intellectual property rights

Capitalised development costs
Licensing fees
Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if
appropriate.
The estimated useful life of an intangible asset in a service concession arrangement is the period from when the Group is
able to charge for the use of the infrastructure to the end of the concession period.
3.6
Leased assets
Leases in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases.
Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present
value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the
accounting policy applicable to that asset.
Other leases are operating leases and are not recognised in the Groups statement of financial position.
-
-
-
-
10 years
8 years
10 to 20 years
10 to 25 years
3.7 Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted
average cost principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and
other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and
work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. Cost
may also include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of
inventories.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses.
3.8
Gross amounts due for contract work represent the gross unbilled amount expected to be collected from customers for
contract work performed to date. It is measured at cost plus profit recognised to date less progress billings and recognised
losses. Cost includes all expenditure related directly to specific projects and an allocation of fixed and variable overheads
incurred in the Groups contract activities based on normal operating capacity.
Gross amounts due for contract work are presented as part of assets in the statement of financial position for all contracts
in which costs incurred plus recognised profits exceed progress billings. If progress billings exceed costs incurred plus
recognised profits, the difference is presented as part of trade and other payables in the statement of financial position.
58

LEADING THE WAY
3.9 Impairment

Non-derivative financial assets
A financial asset not carried at fair value through profit or loss 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 has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated
future cash flows of that asset that can be estimated reliably.
Objective evidence that financial assets 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, and indications that a debtor will enter
bankruptcy.
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 managements 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 assets 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 a subsequent event causes the amount of impairment loss
to decrease, the decrease in impairment loss is reversed through profit or loss.
Available-for-sale financial assets
Impairment losses on available-for-sale investment securities are recognised by reclassifying the losses accumulated in
the fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the
difference between the acquisition cost, net of any principal repayment and amortisation, and the current fair value, less any
impairment loss previously recognised in profit or loss. Changes in cumulative impairment provisions attributable to time
value are reflected as a component of interest income. If, in a subsequent period, the fair value of an impaired available-forsale debt security increases and the increase can be related objectively to an event occurring after the impairment loss was
recognised, then the impairment loss is reversed. The amount of the reversal is recognised in profit or loss. However, any
subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive
income.
Non-financial assets
The carrying amounts of the Groups 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
assets 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.
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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 Groups 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 amount 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 assets 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.
3.10 Non-current assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through
sale rather than through continuing use, are classified as held for sale. Immediately before classification as held for sale, the
assets, or components of a disposal group, are remeasured in accordance with the Groups accounting policies. Thereafter,
generally the assets, or disposal group, are generally measured at the lower of their carrying amount and fair value less costs
to sell. Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on
a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets,
and investment property, which continue to be measured in accordance with the Groups accounting policies. Impairment
losses on initial classification as held for sale, and subsequent gains or losses on remeasurement, are recognised in profit or
loss. Gains are not recognised in excess of any cumulative impairment loss.
Intangible assets and property, plant and equipment once classified as held for sale are not amortised or depreciated. In
addition, equity accounting of associates ceases once classified as held for sale.
3.11 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 pension plans are recognised as an employee benefit expense in profit or loss in the periods during which
related services are rendered by employees.
60

LEADING THE WAY
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 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 do meet the related service and non-market performance conditions at the vesting date. For sharebased 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.
The fair value of the amount payable to employees in respect of share appreciation rights, which are settled in cash, is
recognised as an expense with a corresponding increase in liabilities, over the period that the employees become
unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date. Any changes
in the fair value of the liability are recognised as personnel expense in profit or loss.
Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity
instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments
are obtained by the Group.
3.12 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.
3.13 Revenue

Construction revenue - Construction contracts and sale of plants under service concession arrangements
Contract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and incentive
payments, to the extent that it is probable that they will result in revenue and can be measured reliably. As soon as the
outcome of a construction contract can be estimated reliably, contract revenue is recognised in profit or loss in proportion
to the stage of completion of the contract. Contract expenses are recognised as incurred unless they create an asset related
to future contract activity.
The stage of completion is assessed by reference to the proportion that contract costs incurred for work performed to
date bear to the estimated total contract costs. When the outcome of a construction contract cannot be estimated reliably,
contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable. An expected
loss on a contract is recognised immediately in profit or loss. Net revenue from the sale of plants under service concession
arrangements previously not recognised as construction revenue under the service concession arrangements is recognised
when significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is
probable, the associated costs can be estimated reliably, and the amount of revenue can be measured reliably.
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Revenue relating to construction or upgrade services under a service concession arrangement is recognised based on
the stage of completion of the work performed, consistent with the Groups accounting policy on recognising revenue
on construction contract (see above). Operation or service revenue is recognised in the period in which the services
are provided by the Group. When the Group provides more than one service in a service concession arrangement, the
consideration received is allocated by reference to the relative fair values of the services delivered.
Operating and maintenance income
Revenue from the provision of operating and maintenance services is recognised when the services are rendered.
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, the discount is recognised as a reduction of revenue as the sales are recognised.
Transfers of risks and rewards occur upon delivery to customers.
Finance income
Finance income represents the interest income on the financial receivable arising from a service concession arrangement,
and is recognised in profit or loss using the effective interest method.
Finance lease income
Finance lease income is recognised on accrual basis, taking into account the effective yield of the asset.
Others

Rental income from investment property is recognised in profit or loss on a straight-line basis over the term of the lease.
Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.
Interest income from funds invested (including available-for-sale financial assets) is recognised as it accrues as other income
in profit or loss, using the effective interest method.
3.14 Government grants

The government grants are deducted against the carrying amounts of the assets when there is reasonable assurance that
government grants will be received to compensate the Group for the cost of an asset and the Group will comply with the
conditions associated with the grant.
3.15 Lease payments

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.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of
the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant
periodic rate of interest on the remaining balance of the liability.
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LEADING THE WAY
Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease
when the lease adjustment is confirmed.
Determining whether an arrangement contains a lease
At inception of an arrangement, the Group determines whether such an arrangement is or contains a lease. A specific asset
is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement
conveys the right to use the asset if the arrangement conveys to the Group the right to control the use of the underlying
asset.
3.16 Finance costs

Finance costs comprise interest expense on borrowings that are recognised in profit or loss. Borrowing costs that are not
directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using
the effective interest method.
3.17 Tax

Tax expense comprises current and deferred tax. Current tax and deferred tax are 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 and jointly controlled entities to the extent that the
Group is able to control the timing of 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 end of the reporting period, 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.
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 account 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 judgements about future events. New
information may become available that causes the Group to change its judgement 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.
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3.18 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, which comprise share options granted to employees
and directors. Both basic and diluted EPS of the Group are adjusted for the effect of any provision for preference shares
dividends.
3.19 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 Groups other components. All
operating segments operating results are reviewed regularly by the Groups CEO (the chief operating decision maker) to
make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial
information is available.
Segment results that are reported to the Groups 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 Companys
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.
3.20 New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after
1 January 2012, and have not been applied in preparing these financial statements. Those new standards, amendments to
standards and interpretations that are not expected to have a significant effect on the financial statements of the Group and
the Company in future financial periods, and which the Group does not plan to early adopt except as set out below:
FRS 110 Consolidated Financial Statements,

FRS 111 Joint Arrangements,
FRS 112 Disclosure of Interests in Other Entities,
Revised FRS 27 Separate Financial Statements, and
Revised FRS 28 Investments in Associates and Joint Ventures
The Group will early adopt these FRSs from the financial period beginning 1 January 2013. These FRSs mandatory effective
date would have been from 1 January 2014 onwards.
FRS 110 changes the definition of control such that an investor controls an investee when it is exposed, or has rights, to
variable returns from its involvement with the investee and has the ability to affect those returns through its power with the
investee. FRS 110 introduces a single control model with a series of indicators to assess control. FRS 110 also adds additional
context, explanation and application guidance based on the principle of control.
The Group has re-evaluated its involvement with investees under the new control model. Based on its assessment, there are
no changes to the existing classification of its investments in the various investees.
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LEADING THE WAY
FRS 111 establishes the principles for classification and accounting of joint arrangements. The adoption of this standard
would require the Group to re-assess and classify its joint arrangements as either joint operations or joint ventures based
on its rights and obligations arising from the joint arrangements. Under this standard, interests in joint ventures will be
accounted for using the equity method whilst interests in joint operations will be accounted for using the applicable FRSs
relating to the underlying assets, liabilities, revenue and expense items arising from the joint operations.
The Group has re-evaluated the rights and obligations of the parties to respective existing joint arrangements and has
determined that the parties in the respective joint arrangements have rights to the net assets of the arrangements.
Accordingly, all the existing joint arrangements will be classified as joint ventures under FRS 111 and will be accounted for
using the equity method.
The Group currently accounts for its investments in joint arrangements using proportionate consolidation method. Arising
from the application of FRS 111, all the existing joint arrangements will be classified as joint venture and will be accounted
for using the equity method.
These changes will be applied retrospectively and prior periods in the Groups 2013 financial statements will be restated.
The effect of the application of FRS 111 is decreases in total revenue of $31.7 million for 2012; and total assets and total
liabilities as at 31 December 2012 of $200.1 million respectively. There will be no change to the Groups net assets as at 31
December 2012 and net profits for 2012.
FRS 112 sets out the disclosures required to be made in respect of all forms of an entitys interests in other entities, including
subsidiaries, joint arrangements, associates and unconsolidated structured entities. The adoption of this standard would
result in more extensive disclosures being made in the Groups financial statements in respect of its interests in other
entities; as FRS 112 is primarily a disclosure standard, there will be no financial impact on the results and financial position
of the Group and the Company upon early adoption of this standard by the Group in 2013. The Group is currently collating
the information of the additional disclosures required.
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HYFLUX LTD
4 Property, plant and equipment
Plant
and
Motor
Office
Note machinery vehicles Computers equipment
$000
Leasehold
properties Furniture
and
and Constructionimprovements
fittings
in-progress
$000
Total
$000
$000
$000
$000
$000
$000
2,883
197
(10)
11,567
735
715
2,558
95
45
73,376
1,712
4,767
2,214
356
(53)
67,412 200,360
45,592 53,366
(15,666)
7,057
(14,399)
(434)
(157)
(212)
(4,794)
(7)
(89)
6,968
(323) (20,326)
86
37
(155)
20
3,017
107
47,975
2,051
1,177
(1,386)
2,673
191
(292)
12,705
939
622
(588)
2,506
1,167
367
(556)
78,078
20,981
54,261
(427)
2,617
2,492
110
(232)
99,364 245,918
18,279 46,100
(56,537)
(2,447) (5,928)
(1,405)
48,412
(119)
2,453
(129)
13,549
(60)
3,424
(2,806)
150,087
(88)
4,899
(2,709) (7,316)
55,950 278,774
Group
Cost
At 1 January 2011
Additions
Transfers
Transfer from/(to)
intangible assets
Disposals
Effect of movements
in exchange rates
At 31 December 2011
and 1 January 2012
Additions
Transfers
Disposals
Effect of movements
in exchange rates
At 31 December 2012
66
40,350
4,679
10,202
5
2,438
5,550

LEADING THE WAY
Plant
and
Note machinery
Accumulated
depreciation and
impairment losses
At 1 January 2011
Depreciation for the
year
Disposals
Impairment loss
Transfer
Transfer from
intangible assets
Effect of movements
in exchange rates
At 31 December 2011
and 1 January 2012
Depreciation for the
year
Disposals
Impairment loss
Effect of movements
in exchange rates
At 31 December 2012
Carrying amounts
At 1 January 2011
At 31 December 2011
and 1 January 2012
At 31 December 2012
Leasehold
properties Furniture
Motor
Office
and
and Constructionvehicles Computers equipment improvements
fittings
in-progress
Total
$000
$000
$000
$000
$000
$000
$000
$000
17,201
1,557
7,614
1,695
10,402
1,109
4,956
44,534
5,453
(4,046)
466
(381)
(4)
2,354
(148)
363
(107)
3,717
12,386
(5,608)
3,717
1,157
23
19,770
1,661
5,174
(1,336)
380
(240)
1,909
(568)
(520)
23,088
(82)
1,719
23,149
28,205
25,324
245
(177)
(4)
3,505
(749)
1,157
(92)
10
1,200
15
1,161
9,728
1,769
14,358
1,388
8,673
57,347
347
(542)
5,270
(408)
571
(217)
5,321
13,651
(3,311)
5,321
(89)
10,980
(38)
1,536
(432)
18,788
(144)
1,598
13,994
(1,305)
71,703
1,326
3,953
863
62,974
1,105
62,456 155,826
1,012
734
2,977
2,569
737
1,888
63,720
131,299
1,229
3,301
90,691 188,571
41,956 207,071
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ANNUAL REPORT 2012

HYFLUX LTD
Furniture
Computers and fittings
$000
$000
Total
$000
Company
Cost
At 1 January 2011, 31 December 2011, 1 January 2012 and 31 December 2012
1,018
11
1,029
Accumulated depreciation
1,018
11
1,029
Carrying amounts
Estimation of residual values and useful lives of property, plant and equipment
The Group reviews the useful lives of the property, plant and equipment at the end of each reporting period in order to
determine the amount of depreciation expense to be recorded during any reporting period. The useful lives are based on
the Groups historical experience with similar assets and taking into account anticipated technological changes. Changes
in the expected level of usage and technological developments could impact the economic useful lives and the residual
values of these assets. Therefore future depreciation charges could be revised.
Impairment loss
In 2012, due to the unfavourable market conditions, the Group has deferred the production and expected launch date
of a new product in the industrial segment, which was originally expected to be available for sale in 2013. The Group has
assessed the recoverable amount of the related production plant.
The recoverable amount was estimated based on its value in use, assuming that the production line would go live in 2015
using a pre-tax discount rate of 13% (2011: 11%). Based on the assessment, the Group recognised an impairment loss of
$5,321,000 (2011: $3,717,000). The production plant is included in the Peoples Republic of China Industrial (PRC) CGU.
The calculation of the value in use was based on the cash flows that were projected from financial budgets approved by
management covering a five-year period. The key assumptions made are regarding the commencement period of the
production plant, revenue and costs.
The anticipated annual revenue growth included in the cash flow projections was 6% (2011: 5%) for the years 2015 to 2017
(2011: 2013 to 2016). From 2018 (2011: 2017) onwards, management has assumed that the revenue would remain constant.
The costs are assumed to increase with the increase in revenue growth adjusted for the trend of the raw material prices
based upon the published market rates of the futures.
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Sensitivity to changes in assumptions
Following the impairment in the PRC CGU, the recoverable amount is equal to the carrying amount. Therefore, any adverse
movement in a key assumption would lead to further impairment.
Property, plant and equipment under construction
In 2011, the Group commenced the construction of its new headquarters and research center. In 2012, total capitalised
construction costs of the new premises amounting to $49,836,000 was transferred to leasehold properties and improvements
upon completion of the construction.
Included in the carrying value of the new premises was capitalised borrowing costs related to the acquisition of the land and
the construction of the new premises amounting to $1,085,000 (2011: $652,000), with a capitalisation rate of 2.41% (2011:
2.09%).
Intangible assets
Note
Goodwill
$000
Intellectual
property
rights
$000
Development
costs
$000
Licensing
fees
$000
Total
$000
Group
Cost
At 1 January 2011
Additions
Disposal of subsidiaries to a joint venture
Additions internally developed
Transfer to property, plant and equipment
Disposals
Effect of movements in exchange rates
At 31 December 2011 and 1 January 2012
Additions
Additions internally developed
Liquidation of subsidiary
Disposals
At 31 December 2012
22,408
1,124
23,532
(1,146)
22,386
4,860
40
2
4,902
71
(295)
(19)
4,659
52,643
3,930
(6,968)
(147)
(1)
49,457
5,101
(3,461)
(80)
51,017
8,399
(18)
8,381
(3,898)
(223)
4,260
88,310
40
1,124
3,930
(6,968)
(147)
(17)
86,272
71
5,101
(1,146)
(7,654)
(322)
82,322
69
ANNUAL REPORT 2012

HYFLUX LTD
Note
Accumulated amortisation and

impairment losses
At 1 January 2011
Amortisation for the year
Impairment loss
Disposals
Transfer to property, plant and equipment
Impairment loss
Disposals
Liquidation of subsidiary
At 31 December 2012
Carrying amounts
At 1 January 2011
At 31 December 2012
Goodwill
$000
Intellectual
property
rights
$000
Development
costs
$000
Licensing
fees
$000
Total
$000
3,927
8,484
12,411
(954)
11,457
999
59
2
1,060
220
(260)
74
1,094
16,836
5,130
3,326
(89)
(1,157)
82
24,128
4,250
1,451
(3,461)
(175)
26,193
4,473
324
4,797
310
(3,898)
(75)
1,134
26,235
5,513
11,810
(89)
(1,157)
84
42,396
4,780
1,451
(7,619)
(954)
(176)
39,878
18,481
11,121
10,929
3,861
3,842
3,565
35,807
25,329
24,824
3,926
3,584
3,126
62,075
43,876
42,444
Intellectual
property
rights
$000
Licensing
fees
$000
Total
$000
Cost
At 1 January 2011
Disposals
At 31 December 2011, 1 January 2012 and 31 December 2012
1,779
(1,779)
137
(137)
1,916
(1,916)
Accumulated amortisation
At 1 January 2011
Disposals
96
18
(114)
41
14
(55)
137
32
(169)
Carrying amounts
At 1 January 2011
1,683
Company
70
96
1,779

LEADING THE WAY
Capitalisation of development costs
Initial capitalisation of costs is based on managements judgement that technological and economical feasibility is
confirmed, usually when a product development project has reached a defined milestone according to an established
project management model. In 2011, development costs with carrying amount of $5,811,000 were reclassified to property,
plant and equipment to better reflect the nature of the assets.
Recoverability of development costs
The recoverable amounts of the cash-generating units are estimated based on their value in use. When value in use
calculations are undertaken, management estimates the expected future cash flows from the cash-generating unit and
chooses a suitable discount rate in order to calculate the present value of those cash flows. The recoverable amounts were
estimated to be higher than the carrying amounts of the units, and no impairment was required, except for the amounts
discussed below.
Impairment loss on development costs
Annually, the management will perform specific review on the development projects to identify projects that no longer
meet the recognition criteria set forth in the FRS.
Accordingly, in 2012, taking into consideration the changes in the Groups business plan, an impairment loss of $1,451,000
(2011: $3,326,000) was recognised in profit or loss.
Estimation of useful lives of development costs
Significant judgement is required in estimating the useful lives of development projects, which are affected by various
factors, such as technological developments.
Impairment testing for cash-generating units (CGUs) containing goodwill
For the purpose of impairment testing, goodwill is allocated to the Groups operating divisions which represent the lowest
level within the Group at which the goodwill is monitored for internal management purposes, which is not higher than the
Groups operating segments as reported in note 26. The aggregate carrying amounts of goodwill allocated to each unit are
as follows:
Singapore Others
Kingdom of Saudi Arabia Industrial
Peoples Republic of China Municipal
2012
$000
2011
$000
1,585
9,344
10,929
192
1,585
9,344
11,121
71
ANNUAL REPORT 2012

HYFLUX LTD
In 2012, following a management review of the business portfolio, no impairment loss was recognised in profit or loss.
Impairment losses for 2011 were as follows:
Industrial
- The Netherlands
- Kingdom of Saudi Arabia
- Peoples Republic of China
2012
$000
2011
$000
2,402
4,217
1,865
8,484
The Netherlands Industrial CGU
In 2011, management had fully written off the carrying amount of goodwill and recorded an impairment loss against the
remaining goodwill amount from the Netherlands Industrial CGU of $2,402,000. As at 31 December 2012, the carrying
amount of the goodwill from the Netherlands Industrial CGU was $Nil.
Kingdom of Saudi Arabia Industrial CGU
The recoverable amount of the Kingdom of Saudi Arabia Industrial CGU was determined based upon the fair value less
costs to sell method. The fair value less costs to sell has been estimated based on indicative quotes obtained from potential
buyers. Based on this basis of estimated recoverable amount, the Group recorded an impairment loss of $4,217,000 to the
goodwill arising from Kingdom of Saudi Arabia Industrial CGU in 2011.
Peoples Republic of China Municipal CGU
The recoverable amounts of the Peoples Republic of China Municipal CGU were based on the values in use. Values in use
were determined by discounting the future cash flows generated from the continuing use of the units. Unless indicated
otherwise, values in use in 2012 were determined in a similar manner as in 2011.
Calculation of value in use is derived from the financial projections approved by management with key assumptions made
relating to forecast period, revenue and costs, growth rates and discount rates. Cash flows were projected over 20 to 30
years in accordance with the duration of the concession agreements.
The anticipated annual revenue growth included in the cash flow projections was 5% (2011: 5%). The forecast revenue and
costs, and growth rates are based on past performance of operating plants, expectations of market development as well as
industry reports.
A pre-tax discount rate of 10% (2011: 10%) was applied in determining the recoverable amounts of the CGUs and reflect
specific risks related to the relevant segments.
The values assigned to the key assumptions represent managements assessment of future trends in the industries and are
based on both external sources and internal sources (historical data).
72

LEADING THE WAY
Intangible assets arising from service concession arrangements

$000
Group
Cost
At 1 January 2011
Additions
Additions
At 31 December 2012
129,934
22,769
6,400
159,103
217,825
(8,504)
368,424
Accumulated amortisation
At 1 January 2011
At 31 December 2012
440
3,211
515
4,166
4,189
(297)
8,058
Carrying amounts
At 1 January 2011
At 31 December 2012
129,494
154,937
360,366
At 31 December 2012, the Group owns water plants in PRC, including water treatment plants (WTPs) and wastewater
treatment plants (WWTPs), through the special project companies (SPCs) incorporated in PRC. The principal activities of
the SPCs are development and operation of WTPs and WWTPs, as well as sales of treated and recycled water. Each of
these SPCs has entered into service concession arrangements with the respective local municipals (the grantor), via either
Transfer-Operate-Transfer (TOT) or Build-Operate-Transfer (BOT) arrangements.
Under the TOT arrangements, the rights of use of the water plants were transferred to the Group and the Group is responsible
for any upgrading services to bring the water plants into proper working conditions. Under the BOT arrangements, the
Group is responsible for the construction of the water plants. Upon completion of the construction, the Group is responsible
for operating the water plants and sale of the treated and recycled water to the industrial or domestic customers. The
concession periods range from 20 years to 30 years.
During the concession period, the Group received the right to charge the customers for the sale of water. Additionally, some
of the service concession arrangements provide the Group a guaranteed minimum annual payment for the initial years of
the concession period, ranging from 3 years to 30 years. These guaranteed minimum annual payments are recognised as
financial receivables to the extent that the Group has contractual rights under the concession arrangements (see note 10).
The financial receivables are measured on initial recognition at their fair value.
Intangible assets arising from service concession arrangements represent the right to operate the water plants and to sell
the water to the customers.
At the end of the concession period, the water plants will be transferred to the grantor.
73
ANNUAL REPORT 2012

HYFLUX LTD
The service concession agreement does not contain a renewal option. The standard rights of the grantor to terminate the
agreement include poor performance by the Group and in the event of a material breach in the terms of the agreement.
The standard rights of the Group to terminate the agreement include failure of the grantor to make payment under the
agreement, a material breach in the terms of the agreement, and any changes in law that would render it impossible for the
Group to fulfill its obligations under the agreement.
Investments in subsidiaries
Company
2012
2011
$000
$000
Unquoted equity securities, at cost
Impairment losses
Loans to subsidiaries
164,011
(11,100)
152,911
24,509
177,420
156,011
(11,100)
144,911
24,509
169,420
Loans to subsidiaries are unsecured and interest-free, and settlement is neither planned nor likely to occur in the foreseeable
future. As these balances are, in substance, part of the Companys net investments in the subsidiaries, they are stated at cost
less impairment losses, if any.
In 2012, the Company has assessed the recoverable amount of its investments in subsidiaries that have been loss-making
since the previous financial years. The recoverable amount was estimated based on value in use.
When value in use calculations are undertaken, management estimates the expected future cash flows from the cashgenerating unit and chooses a suitable discount rate in order to calculate the present value of those cash flows. The
recoverable amounts were estimated to be higher than the carrying amounts of the units, and no additional impairment
was required in 2012.
74

LEADING THE WAY
Details of major subsidiaries are as follows:
Name of subsidiary
Country of
incorporation
Ownership
interest
2012
2011
%
%
Held by the Company

Hydrochem (S) Pte Ltd
Hyflux Membrane Manufacturing (S) Pte. Ltd.
SinoSpring Utility Ltd
Spring China Utility Ltd
TuaSpring Pte Ltd
Hyflux Engineering Pte Ltd
Singapore
Singapore
British Virgin Islands
Singapore
Singapore
100
100
100
100
100
100
100
100
100
100
100
100
Peoples Republic of China (PRC)

PRC
PRC
PRC
PRC
100
71
71
100
100
100
71
71
100
100
PRC
Algeria
Algeria
PRC
100
51
100
100
100
51
100
100
Held through subsidiaries

Hydrochem Engineering (Shanghai) Co., Ltd
Hyflux Filtech (Shanghai) Co., Ltd
Hyflux Unitech (Shanghai) Co., Ltd
Hyflux Hi-tech Product (Yangzhou) Co., Ltd
Hyflux NewSpring Construction Engineering (Shanghai)
Co., Ltd
Hyflux Engineering (Shanghai) Co., Ltd
Hyflux-TJSB Algeria SPA
Hyflux Engineering Algeria EURL
Sinolac (Huludao) Biotech Co., Ltd

KPMG LLP, Singapore is the auditor of all significant Singapore-incorporated subsidiaries. The foreign-incorporated
subsidiaries that are considered significant are Hyflux NewSpring Construction Engineering (Shanghai) Co., Ltd, and Hyflux
Engineering Algeria EURL. Their respective statutory auditors are Shanghai Hongyi CPA Co., Ltd, PRC and Guerza Rafik
Expert Comptable G.R.E.C.
75
ANNUAL REPORT 2012

HYFLUX LTD
Investments in joint ventures

Company
2012
2011
$000
$000
Unquoted equity securities, at cost
3,125
3,125
Details of major joint ventures are as follows:
Name of joint venture
Country of
incorporation
Ownership interest
2012
2011
%
%
Held by the Company

Hyflux Marmon Development Pte. Ltd.
Singapore
50
50
Singapore
Hong Kong
50
50
50
50
Peoples Republic of China (PRC)

Singapore
Singapore
PRC
PRC
PRC
PRC
PRC
PRC
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
50
PRC
PRC
PRC
PRC
50
50
50
50
50
50
50
50

Galaxy NewSpring Pte. Ltd.
H.J. NewSpring Limited
Held through joint ventures
Tianjin Dagang NewSpring Co., Ltd
Galaxy Newspring Capital Pte. Ltd.
Hyflux Water Trust
Galaxy Operation and Management (Shanghai) Co., Ltd
Hyflux NewSpring (Dezhou) Co., Ltd
Hyflux NewSpring (LiaoYang GongChangLing) Co., Ltd.
Hyflux NewSpring Sewage Disposal (Rudong) Co., Ltd
Hyflux NewSpring (Tianjin) Co., Ltd.
Hyflux NewSpring Waste Water Treatment (Mingguang)
Co., Ltd
Hyflux NewSpring (Yangzhou) Co., Ltd
Hyflux NewSpring (Zunhua) Co., Ltd.
Langfang Hyflux NewSpring Co., Ltd.
Wuxi Hyflux NewSpring Sewage Disposal Co., Ltd

76
KPMG LLP, Singapore is the auditor of the Singapore-incorporated joint ventures. The foreign-incorporated joint venture
that is considered significant is Tianjin Dagang NewSpring Co., Ltd and the statutory auditor is KPMG Huazhen, Shanghai,
PRC.

LEADING THE WAY
The summarised financial information of the joint ventures, which are adjusted for the percentage of ownership held by the
Group, are as follows:
2012
$000
2011
$000
Assets and liabilities

Non-current assets
Current assets
Total assets
396,925
68,030
464,955
405,518
53,603
459,121
Current liabilities
Total liabilities
(143,539)
(56,543)
(200,082)
(131,904)
(48,678)
(180,582)
Results
Revenue
Expenses
Loss before income tax
31,731
(37,628)
(5,897)
38,218
(39,264)
(1,046)
Contingent liabilities in respect of bank guarantees for which the Group is liable
(57,257)
(62,652)
Group
Unquoted equity securities
2012
$000
2011
$000
104,092
108,887
Company
2012
2011
$000
$000
14,109
13,704
Unquoted equity securities of the Group with a carrying amount of $81,686,000 (2011: $88,195,000) have been pledged as
collateral for banking facilities granted to the associates.
Details of major associates are as follows:
Name of associate
Country of
incorporation
Ownership
interest
2012
2011
%
%
Held by the Company

SingSpring Trust
Singapore
30
30
77
ANNUAL REPORT 2012

HYFLUX LTD
Name of associate
Country of
incorporation
Ownership
interest
2012
2011
%
%

Ningxia Hypow Bio-Technology Co., Ltd
Tlemcen Desalination Investment Company SAS
Tahlyat Myah Magtaa SPA
Peoples Republic of China

France
Algeria
25
30
47
25
30
47
SingSpring Trust is audited by Ernst & Young Singapore and Tahlyat Myah Magtaa SPA is audited by Cabinet Benmahsour
Med El Bachir. An associated company is considered significant as defined under the SGX-ST's Listing Manual if the Groups
share of its net tangible assets represents 20% or more of the Groups consolidated net tangible assets, or if the Groups
share of its pre-tax profits accounts for 20% or more of the Groups consolidated pre-tax profits. None of the Groups
associates is considered significant in accordance with SGX-ST's Listing Manual.
The summarised financial information of the associates, which are adjusted for the percentage of ownership held by the
Group, are as follows:
2012
$000
10
Assets and liabilities

Total assets
Total liabilities
340,297
(241,217)
Results
Revenue
Profit after income tax
29,544
4,253
2011
$000
345,251
(296,566)
27,227
1,226
Group
Non-current
Current
Lease receivables
Total

78
2012
$000
2011
$000
704,811
418,320
12,548
12,548
4,874
63
4,937
717,359
423,257

LEADING THE WAY
The financial receivables represent the unconditional rights to receive cash or other financial asset from or at the direction
of the grantors for the construction or upgrade services provided. See note 6 for the background of the service concession
arrangements.
At 31 December 2012, the Group has no receivables under finance lease. In 2011, the Group had receivables under finance
leases as follows:
Minimum
lease payment
receivables
2011
$000
Unearned finance
income
2011
$000
Present value
of minimum lease
payment receivables
2011
$000
82
19
63
Group
Within one year

Under the terms of the lease arrangements, no contingent rents were recognised and there were no unguaranteed residual
values accruing to the Group.
The weighted average effective interest rate of the lease receivables at 31 December 2011 was 5.5% per annum.
11

Group
Non-current
Trade receivables
Amounts due from:
- subsidiaries (non-trade)
- an associate (non-trade)
Current
Trade receivables
Prepayments
Deposits
Advances to suppliers
Staff advances
Other receivables
Derivatives
Amounts due from:
- subsidiaries (trade)
- joint ventures (trade)
- joint ventures (non-trade)
- associates (trade)
- an associates (non-trade)
Total
Company
2012
2011
$000
$000
2012
$000
2011
$000
66
14,594
14,594
15,486
15,552
760,736
760,736
445,312
445,312
99,375
6,477
2,425
28,768
231
9,822
21
90,691
4,927
2,512
19,826
323
12,801
546
3,631
12
3,276
514
34,634
1,815
15,328
10,725
209,621
30,015
1,688
64,955
2,809
231,093
17,073
464,295
509
5,108
490,628
17,548
701,871
527
5,405
729,141
224,215
246,645
1,251,364
1,174,453
79
ANNUAL REPORT 2012

HYFLUX LTD
At 31 December 2012, trade receivables for the Group included a retention sum of $10,001,000 (2011: $9,353,000) relating
to construction contracts in progress.
Included in current trade receivables of the Group are note receivables of $5,187,000 (2011: $6,356,000) relating to bank
promissory notes for payment within the next six months.
Outstanding balances with subsidiaries, joint ventures and associates are unsecured. There is no allowance for doubtful
debts arising from the outstanding balances.
Except for balances amounting to $744,858,000 (2011: $428,462,000) that bear interest at rates of 5% to 6.5% (2011: 5% to
6.5%), remaining non-current non-trade amounts due from subsidiaries are interest-free, have no fixed terms of repayment
and are not expected to be repaid within the next 12 months. As these amounts are in substance, a part of the entitys net
investment in the subsidiaries, they are stated at cost.
The non-current non-trade amount due from an associate bears interest at rate of 5.94% (2011: 5.94%) per annum and is
repayable in 2014.
The current amounts due from subsidiaries, joint ventures and associates are interest-free and are repayable on demand.
The Groups and the Companys exposure to credit and currency risks, and impairment losses related to trade and other
receivables, are as set out in note 20.
80

LEADING THE WAY
12
Deferred tax assets and liabilities
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Group
Tax losses
Deductible temporary differences
2012
$000
2011
$000
18,914
18
18,932
17,880
18
17,898
Company
2012
2011
$000
$000
The tax losses and deductible temporary differences are subject to agreement by the tax authorities and compliance with
tax regulations in the respective countries in which the Company and certain subsidiaries operate. Tax losses of $8,358,000
(2011: $7,545,000) expire in 2013 to 2017 (2011: 2012 to 2016). Remaining tax losses and deductible temporary differences
do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because
it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom.
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
2012
$000
Assets
2011
$000
Liabilities
2012
2011
$000
$000
(417)
(1,633)
(2,050)
(417)
(2,412)
(2,829)
1,009
4,056
22,152
27,217
Group
Intangible assets
Intangible assets arising from service concession arrangements
Tax loss carry-forwards
Deferred tax (assets)/liabilities
182
4,445
23,747
28,374
81
82

Intangible assets
Intangible assets arising
from service concession
arrangements
Tax loss carry-forwards
Group
2,729
2,729
20,348
(847)
24,024
$000
791
3,732
$000
(613)
(1,536)
(2,045)
(609)
713
$000
From
acquisition of Recognised
Balance as at subsidiaries
in
1 January
by a joint
profit or loss
2011
venture
(note 24)
Movement in temporary differences during the year
866
(29)
837
$000
Exchange
differences
23,330
(2,412)
25,545
182
4,445
$000
Balance as at
31 December
2011
(296)
689
831
827
(389)
$000
Recognised
in
profit or loss
(note 24)
(1,299)
90
(1,209)
$000
Exchange
differences
21,735
(1,633)
25,167
1,009
4,056
$000
Balance as at
31 December
2012
ANNUAL REPORT 2012

HYFLUX LTD

LEADING THE WAY
13

Group
Note
Costs incurred and attributable profits

Progress billings
Comprising of:
Gross amounts due from contract work
Progress payments from customers
16
2012
$000
2011
$000
837,243
(730,223)
107,020
1,127,765
(964,410)
163,355
119,059
(12,039)
107,020
176,910
(13,555)
163,355
14 Inventories
Group
Raw materials and consumables

Work in progress
Finished goods
2012
$000
2011
$000
19,267
8,541
4,648
32,456
11,798
11,010
1,387
24,195
During the year, the write-down of inventories to net realisable value amounted to $644,000 (2011: $113,000) for the Group.
The write-down is included as part of other expenses in profit or loss.
15

Group
Note
Bank balances
Fixed deposits with financial institutions
Cash and cash equivalents in the statements of
financial position
Deposits pledged
Bank overdrafts used for cash management purposes
Cash and cash equivalents in the statement of
cash flows

17
Company
2012
2011
$000
$000
2012
$000
2011
$000
304,280
236,952
198,789
463,569
170,741
5,475
13,782
82,625
541,232
(9,589)
(41,456)
662,358
(20,943)
176,216
96,407
490,187
641,415
Deposits pledged represent bank balances of certain subsidiaries and joint venture pledged as securities for performance
guarantees and credit facilities, respectively.
83
ANNUAL REPORT 2012

HYFLUX LTD
16
Trade and other payables

Group
Note
Trade payables
Progress payments from customers
Derivatives
Accrued expenses
Other payables
Amounts due to:
13
Company
2012
2011
$000
$000
2012
$000
2011
$000
261,378
12,039
81
18,725
25,131
183,335
13,555
395
13,958
15,412
1,019
8,219
354
762
8,403
623
228
318,205
1,001
184
227,840
36
25,539
34,813
41
126,007
135,567
Amounts due to subsidiaries, joint ventures and associates are unsecured, interest-free and repayable on demand.
The Groups and the Companys exposure to currency and liquidity risk related to trade and other payables are described
in note 20.
17
This note provides information about the contractual terms of the Groups and the Companys interest-bearing loans and
borrowings, which are measured at amortised cost. For more information about the Groups and Companys exposures to
interest rate, foreign currency and liquidity risks, see note 20.
Group
Note
Secured bank loans
Unsecured bank loans
Unsecured notes
Current liabilities
Bank overdraft
Secured bank loans
Unsecured notes
Total
84
15
Company
2012
2011
$000
$000
2012
$000
2011
$000
89,178
411,899
553,229
1,054,306
78,096
180,950
453,255
712,301
355,290
553,229
908,519
120,556
453,255
573,811
41,456
9,284
13,695
64,435
20,943
6,482
2,258
88,438
118,121
10,000
10,000
88,438
88,438
1,118,741
830,422
918,519
662,249

LEADING THE WAY
Secured bank loans of the Group at 31 December 2012 and 31 December 2011 were secured by land and building of a
subsidiary with carrying amount of $67,559,000 (2011: $41,787,000), a joint ventures mortgages of its shares of various
subsidiaries and deposits pledged of $2,502,000 (2011: $Nil).
Unsecured bank loans and overdraft of the Group totalling $514,272,000 (2011: $256,291,000) are guaranteed by the
Company and a subsidiary of the Group.
Unsecured bank loans of the Company totalling $355,291,000 (2011: $120,556,000) are guaranteed by a subsidiary of the
Group.
At the reporting date, the Group does not consider it probable that a claim will be made against the Group under the
guarantees as described above.
In 2011, the Company increased the unsecured multi-currency debt established in 2008 from $300 million to $800 million,
pursuant to which the Company may issue notes which bear currency, interest and maturity terms that vary with each series,
as may be agreed between the Company and the dealers. As at 31 December 2012, $555 million (2011: $544 million) of
unsecured fixed rate notes were in issue.
Terms and debt repayment schedule
Terms and conditions of outstanding loans and borrowings are as follows:
Currency
Nominal
interest rate
Year
of maturity
SGD
SGD
USD
SGD
SGD
SGD
RMB
USD
USD
SGD
USD
SGD
DZD
SIBOR + 1.95%
SOR + 1.0%
LIBOR + 1.66%
LIBOR + 1.66%
COF* + 2.25%
COF* + 1.75%
6.6% - 7.05%
COF* + 2.5%
LIBOR + 2.5%
COF* + 1.5%
1.41%-3.73%
3.5% - 5.68%
6% - 9%
2017
2014
2016
2016
2013
2013
2023
2012 - 2017
2012 - 2014
2015
2023
2014 - 2019
2013
2012
Face Carrying
value
amount
$000
$000
2011
Face Carrying
value
amount
$000
$000
Group
Secured bank loans
Secured bank loans
Unsecured notes
Bank overdraft
Total loans and
borrowings
100,000
30,000
125,825
25,000
50,000
10,000
57,725
28,585
70,507
25,000
3,011
555,000
41,456
99,465
30,000
125,825
25,000
50,000
10,000
57,293
28,585
69,877
25,000
3,011
553,229
41,456
120,556
63,281
33,704
51,963
543,500
20,943
120,556
62,652
33,704
50,874
541,693
20,943
1,122,109
1,118,741
833,947
830,422
85
ANNUAL REPORT 2012

HYFLUX LTD
Currency
Nominal
interest rate
Year
of maturity
SGD
SGD
USD
SGD
SGD
SGD
SGD
SGD
SIBOR + 1.95%
SOR + 1.0%
LIBOR + 1.66%
LIBOR + 1.66%
COF* + 2.25%
COF* + 1.75%
COF* + 1.50%
3.5% - 5.68%
2017
2014
2016
2016
2013
2013
2015
2014 - 2019
2012
Face Carrying
value
amount
$000
$000
2011
Face Carrying
value
amount
$000
$000
Company
Unsecured notes
Total loans and
borrowings
COF* :
100,000
30,000
125,825
25,000
50,000
10,000
25,000
555,000
99,465
30,000
125,825
25,000
50,000
10,000
25,000
553,229
120,556
543,500
120,556
541,693
920,825
918,519
664,056
662,249
Costs of funds, the rate per annum determined by the bank to be the aggregate of :
i.
The rate at which the bank would be able to acquire funds in the Singapore interbank market (or from such
sources as the bank may select for the purpose), and
ii.
The rate determined by the bank to represent the banks costs of compliance with liquidity, reserve or
similar requirements imposed by any relevant authority (if any).
18
Capital and reserves
Share capital
Ordinary shares
2012
2011
No. of shares
000
000
CPS*
2012
2011
No. of shares
000
000
Group and Company

On issue at 1 January
Issue of CPS
Exercise of share options
Purchase of treasury shares
On issue at 31 December
858,679
479
(33,935)
825,223
857,931
3,459
(2,711)
858,679
4,000
4,000
4,000
4,000
* 6% Cumulative Non-convertible Non-voting Perpetual Class A Preference Shares

All shares rank equally with regard to the Companys residual assets, except that CPS shareholders which rank senior to the
ordinary shareholders participate only to the extent of the face value of the CPS.
All issued shares are fully paid, with no par value.
86

LEADING THE WAY
Ordinary shares
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. In respect of the Companys shares that are held by the Group, the rights are
suspended until these shares are issued.
Issuance of ordinary shares
479,000 (2011: 3,459,000) ordinary shares were issued as a result of the exercise of vested options arising from the 2001
share option programme granted to key management staff. Options were exercised at an average price of $0.953 (2011:
$1.364) per option.
All issued shares were fully paid.
CPS
Group and Company
2012
2011
$000
$000
At 1 January
Proceeds from issue of CPS
Transaction costs
At 31 December
392,569
392,569
400,000
(7,431)
392,569
On 25 April 2011, the Company issued 4,000,000 CPS listed on the Main Board of the Singapore Exchange Securities
Trading Limited.
The CPS do not carry the right to vote at general meeting except in certain limited circumstances as specified in the Offer
Information Statement dated 13 April 2011 (the OIS) and rank senior to the ordinary shares with regard to the Companys
residual assets, to the extent of the face value of the CPS. All issued shares are fully paid.
The CPS carry a dividend rate of 6% per annum of their liquidation preference (being $100 per CPS), payable semi-annually
when, as and if declared by the Board, in arrears on 25 April and 25 October of each year, subject to certain conditions
specified in the OIS.
The Company has the right, but not the obligation, to redeem the CPS on or after 25 April 2018, at the liquidation preference
for each CPS plus accrued but unpaid dividends up to (but excluding) the redemption date. If the CPS are not redeemed by
the Company on 25 April 2018, dividends will accrue on the CPS at the rate of 8% per annum of their liquidation preference
on and from 25 April 2018.
The CPS are perpetual securities with no maturity date and are not redeemable at the option of the holders of the CPS.
The Company may at its sole discretion, redeem the CPS for cash, in whole or in part (on a pro rata basis), under certain
circumstances, subject to the terms and conditions of the OIS.
87
ANNUAL REPORT 2012

HYFLUX LTD
Reserve for own shares
The reserve for the Companys own shares comprises the cost of the Companys shares held by the Group. At 31 December
2012, the Group held 37,146,000 (2011: 3,211,000) of the Companys shares.
Capital reserve
The capital reserve comprises:

(a)
Capital gain arising from the payment of the Groups subscription to the share capital of a subsidiary by a noncontrolling interest.
(b)
Statutory Reserve Fund (SRF)
In accordance with the Foreign Enterprise Law in the Peoples Republic of China (PRC), the Groups subsidiaries
in the PRC are required to appropriate earnings to a SRF. 10% of the statutory profits after tax as determined in
accordance with the applicable PRC accounting standards and regulations are allocated to the SRF annually until
the cumulative total of the SRF reaches 50% of the subsidiaries registered capital. Subject to approval from the
relevant PRC authorities, the SRF may be used to offset any accumulated losses or increase the registered capital of
the subsidiaries. The SRF is not available for dividend distribution to shareholders.
(c)
Difference between the consideration paid and net assets acquired in acquisition of non-controlling interest.
(d)
Accumulated amortisation of transaction costs incurred in the issuance of redeemable preference shares.
Foreign currency translation reserve
The translation reserve comprises foreign currency differences arising from the translation of the financial statements of
foreign operations.
Hedging reserve
The hedging reserve comprises:

(a)
The effective portion of the cumulative net change in the fair value of cash flow hedging instruments relating to
hedged transactions that have not yet occurred; and
(b)
The Groups share of the hedging reserve of associates.
Employees share option reserve
The employees share option reserve represents the equity-settled share options granted to employees. This reserve is
made up of the cumulative value of services received from employees recorded over the vesting period commencing from
the grant date of equity-settled share options.
88

LEADING THE WAY
Dividends

The following dividends were declared and paid by the Group and the Company:
For the year ended 31 December

Group and Company
2012
2011
$000
$000
Final tax-exempt dividend paid of 2.10 cents (2010: 3.50 cents) per share in respect of
previous financial year
Interim tax-exempt dividend paid of 0.70 cent (2011: 0.67 cent) per share in respect of current
financial year
$6 (2011: $3) per CPS
17,805
30,108
5,775
24,066
47,646
5,767
12,033
47,908
After the respective reporting dates, the following dividends were proposed by the directors. As at the respective year end,
the dividends were not provided for and there were no income tax consequences.
Group and Company
2012
2011
$000
$000
Final proposed tax-exempt dividend of 2.50 cents (2011: 2.10 cents) per share
20,631
18,032
19
Share-based payment
Description of the share-based payment arrangements
At 31 December 2012, the Group has the following share-based payment arrangements:
Share option scheme (equity-settled)
On 27 April 2011, the members of the Company have approved the implementation of new share option scheme (the Scheme)
to replace the 2001 Scheme that expired on 26 September 2011. The implementation of the Scheme and replacement of
expired scheme do not affect the rights of holders of the options under the expired scheme. The maximum entitlement
of Olivia Lum Ooi Lin is 10% of the total number of shares which may be issued by the Company under the Scheme. The
aggregate number of scheme shares available to Olivia Lum Ooi Lin and her associates (as defined in SGX-ST's Listing
Manual) shall not exceed 25% of the total number of scheme shares available under the Scheme. It was in force since 27
September 2011 and shall expire on 26 September 2021.
The Scheme is administered by the Remuneration Committee.
Once these options have vested, the options are exercisable by an employee during a contractual option term of 10 years
from the date of grant of that option. 20% of the options granted are exercisable after the director or employee completed
each year of service from the date of the grant. All options are to be settled by physical delivery of shares.
The duration of the Scheme may be extended with the approval of the members of the Company at a general meeting of
the Company and of any relevant authorities which may then be required. The vesting of the options under the Schemes
are conditional upon various factors including the directors and employees completing their years of service to the Group.
89
ANNUAL REPORT 2012

HYFLUX LTD
Disclosure of share option scheme
The number and weighted average exercise prices of share options are as follows:
Weighted
average
exercise
price
2012
$
Number
of options
2012
Weighted
average
exercise
price
2011
$
Number
of options
2011
Outstanding at 1 January
Forfeited during the year
Exercised during the year
Granted during the year
Option granted but not accepted
Outstanding at 31 December
1.658
1.831
0.953
1.469
1.469
1.623
41,713,681
(3,072,329)
(478,875)
7,305,000
(50,000)
45,417,477
1.656
1.782
1.364
1.631
1.658
35,640,369
(4,517,572)
(3,437,116)
14,028,000
41,713,681
Exercisable at 31 December
1.565
22,028,677
1.564
19,588,481
The options outstanding at 31 December 2012 have an exercise price in the range of $0.3997 to $2.4187 (2011: $0.2749 to
$2.4187) and a weighted average contractual life of 5.78 years (2011: 6.66 years).
The weighted average share price at the date of exercise for share options exercised in 2012 was $1.366 (2011: $1.990) per
share.
Inputs for measurement of grant date fair values
The grant date fair value of the share-based payment plans was measured based on the Black-Scholes standard option
valuation model. Expected volatility is estimated by considering historic average share price volatility. The inputs used in
the measurement of the fair values at grant date of the share-based payment plans are the following:
Fair value of share options and assumptions

Date of grant of options
Fair value at grant date
Share price at grant date
Exercise price
Expected volatility (weighted average volatility)
Option life (expected weighted average life)
Expected dividends
Risk-free interest rate (based on government bonds)
90
5 March 2012
$0.405
$1.430
$1.469
46%
100 days
2.77%
0.46%

LEADING THE WAY
20
Financial instruments
Credit risk
Exposure to credit risk
The carrying amount of financial assets in the statements of financial position represents the Group's and the Companys
respective maximum credit exposure. The maximum exposure to credit risk at the reporting date was:
Group
Note
Trade receivables
Deposits
Advances to suppliers
Staff advances
Other receivables
Amounts due from:
- associates (trade)
- associates (non-trade)
Derivatives
Recognised financial assets
Company
2012
2011
$000
$000
2012
$000
2011
$000
10
11
11
11
11
11
717,359
99,375
2,425
28,768
231
9,822
423,257
90,757
2,512
19,826
323
12,801
12
11
11
11
11
11
11
15
34,634
1,815
15,328
25,319
541,232
1,476,308
21
1,476,329
30,015
1,688
64,955
18,295
662,358
1,326,787
546
1,327,333
17,073
1,225,031
509
5,108
176,216
1,423,949
1,423,949
17,548
1,147,183
527
5,405
96,407
1,267,070
514
1,267,584
11
The Groups revenue is earned from a wide range of customers whose credit quality have not changed significantly.
The maximum exposure to credit risk for loans and receivables at the reporting date by type of counterparty was:
Group
Municipal
Industrial
Subsidiaries
Joint ventures
Associates
Others
2012
$000
2011
$000
1,364,204
84,222
27,882
1,476,308
1,150,088
138,227
38,472
1,326,787
Company
2012
2011
$000
$000
1,242,104
509
5,108
176,228
1,423,949
1,164,731
527
5,405
96,407
1,267,070
91
ANNUAL REPORT 2012

HYFLUX LTD
The credit quality of trade and other receivables is assessed based upon the credit policy in place. At the reporting date,
the Group and the Company believe that the credit quality of trade and other receivables that were not past due or impaired
is of acceptable risk.
The Group does not require collateral in respect of trade and other receivables.
Impairment losses
The ageing of loans and receivables at the reporting date was:

Gross Impairment
2012
2012
$000
$000
Gross Impairment
2011
2011
$000
$000
Group
Not past due
Past due 0 to 60 days
Past due 61 to 180 days
More than 180 days
1,416,774
11,702
6,530
46,872
1,481,878
5,570
5,570
1,275,441
10,271
10,249
35,753
1,331,714
4,922
4,927
1,423,949
1,267,070
Company
Not past due

The movement in the allowance for impairment in respect of loans and receivables during the year was as follows:
Group
At 1 January
Impairment loss recognised
Impairment loss written off
Impairment loss written back
At 31 December
2012
$000
2011
$000
4,927
1,311
(55)
(455)
(158)
5,570
5,280
1,980
(1,503)
(903)
73
4,927
At 31 December 2012, an impairment loss of the Group of $1,311,000 (2011: $1,980,000) relates to several customers that
have indicated that they are not expecting to be able to pay their outstanding balances, mainly due to financial difficulties.
The impairment losses recognised and written back during the year are included as part of other expenses in profit or loss.
The Group and the Company believe that the unimpaired amounts that are past due are still collectible, based on historic
payment behaviour and analysis of the customers underlying credit ratings.
Based on historic default rates, the Group believes that, apart from the above, no impairment allowance is necessary in
respect of the Groups loans and receivables that are unimpaired at 31 December 2012 as these loans and receivables are
mainly due from governing bodies or agencies of the Peoples Republic of China, or customers that have a good payment
record with the Group. Management believes that no additional impairment allowance is necessary on the Companys loans
and receivables as at 31 December 2012.
92

LEADING THE WAY
The Group held cash and cash equivalents of $541,232,000 at 31 December 2012 (2011: $662,358,000), which represents
its maximum credit exposure on these assets. The cash and cash equivalents are held with bank and financial institution
counterparties, which are rated A+ to AA-, based on rating agency Standard & Poors ratings.
Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the
impact of netting agreements:
Group
2012
Bank overdraft
Variable interest rate loans
Fixed interest rate notes
Trade and other payables*
Derivative financial instruments
Forward exchange contracts (gross-settled)
- Outflow
- Inflow
Interest rate swaps used for hedging (net-settled)
2011
Bank overdraft
- Outflow
- Inflow
Carrying Contractual
amount
cash flows
$000
$000
41,456
524,056
553,229
306,085
1,424,826
Cash flows
Between
Within
1 and
1 year
5 years
$000
$000
More than
5 years
$000
(44,306)
(580,897)
(667,200)
(306,085)
(1,598,488)
(44,306)
(37,259)
(23,705)
(306,085)
(411,355)
(498,094)
(359,865)
(857,959)
(45,544)
(283,630)
(329,174)
(1,975)
1,989
(1,640)
1,652
(335)
337
81
60
(81)
(67)
(56)
(44)
(25)
(23)
20,943
267,786
541,693
213,890
1,044,312
(22,427)
(315,818)
(642,636)
(213,890)
(1,194,771)
(22,427)
(20,799)
(110,674)
(213,890)
(367,790)
(236,586)
(351,302)
(587,888)
(58,433)
(180,660)
(239,093)
(80,961)
81,611
(80,961)
81,611
(38,955)
38,640
(38,955)
38,640
(65)
270
(41)
294
(24)
(24)
(21)
(546)

- Outflow
- Inflow
354
Interest rate swaps used for hedging (net-settled)
41
(151)
* Exclude derivatives (shown separately) and progress payments from customers.
93
ANNUAL REPORT 2012

HYFLUX LTD
Company
2012
2011

- Outflow
- Inflow
- Outflow
- Inflow
Carrying Contractual
amount
cash flows
$000
$000
Cash flows
Between
Within
1 and
1 year
5 years
$000
$000
More than
5 years
$000
365,290
553,229
34,813
953,332
(390,712)
(667,200)
(34,813)
(1,092,725)
(17,219)
(23,705)
(34,813)
(75,737)
(373,493)
(359,865)
(733,358)
(283,630)
(283,630)
120,556
541,693
135,213
797,462
(131,365)
(642,636)
(135,213)
(909,214)
(2,358)
(110,674)
(135,213)
(248,245)
(129,007)
(351,302)
(480,309)
(180,660)
(180,660)
(77,910)
78,527
(77,910)
78,527
(38,955)
38,640
302
(38,955)
38,640
302
(514)
354
(160)

* Excludes derivatives (shown separately).
The maturity analysis shows the undiscounted cash flows of the financial liabilities of the Group and the Company on the
basis of their earliest possible contractual maturity.
For derivative financial instruments, the cash inflows/(outflows) represent the contractual undiscounted cash flows relating
to these instruments. Gross inflows and outflows are included for derivatives that are gross-settled on a simultaneous basis.
Except for the cash flow arising from the intragroup financial guarantee, it is not expected that the cash flows included in the
maturity analysis could occur significantly earlier, or at significantly different amounts.
At the reporting date, the Company does not consider it probable that a claim will be made against the Company under the
intragroup financial guarantee.
94

LEADING THE WAY
Currency risk
Exposure to currency risk
The Groups and Companys exposure to foreign currency risk is as follows based on notional amounts:
31
December
2012
US dollars
$000
31
December
2011
US dollars
$000
160,743
39,873
(227,298)
(156,542)
(183,224)
245,732
75,478
(154,260)
(96,952)
69,998
4,382
19,176
(125,825)
(152)
(102,419)
302,601
808
(120,556)
(9,912)
172,941
Group
Company
Sensitivity analysis
A 10% strengthening of the Singapore dollar, as indicated below, against the US dollar at 31 December would have increased
equity and profit before income tax in profit or loss by the amounts shown below. This analysis is based on foreign currency
exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period. The
analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same
basis for 2011, although the reasonably possible foreign exchange rate variances were different, as indicated below:
Group
Company
Profit
before
income tax
Equity
$000
$000
Profit
before
income tax
$000
Equity
$000
31 December 2012
US dollars (10% strengthening)
18,322
10,242
31 December 2011
US dollars (10% strengthening)
(7,000)
(17,294)
A weakening of the Singapore dollar against the above currency at 31 December would have had the equal but opposite
effect to the amounts shown above, on the basis that all other variables remain constant.
95
ANNUAL REPORT 2012

HYFLUX LTD
Interest rate risk
Profile

At the reporting date, the interest rate profile of the interest-bearing financial instruments was:
Group
Carrying amount
2012
2011
$000
$000
Fixed rate instruments
Bank overdraft
Unsecured notes
Variable rate instruments

Company
Carrying amount
2012
2011
$000
$000
(41,456)
(553,229)
(594,685)
(20,943)
(541,693)
(562,636)
(553,229)
(553,229)
(541,693)
(541,693)
(524,056)
(267,786)
(365,290)
(120,556)
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group
does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model.
Therefore a change in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable rate instruments
A change of 75 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit before
income tax in 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 for 2011.
Group
Profit before
income tax
75 bp
75 bp
increase
decrease
$000
$000
Equity
75 bp
increase
$000
75 bp
decrease
$000
31 December 2012
(3,943)
3,943
31 December 2011
(2,008)
2,008
31 December 2012
(2,744)
2,744
31 December 2011
(904)
904
Company
96

LEADING THE WAY
Accounting classifications and fair values
Fair values versus carrying amounts
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statements of financial
position, are as follows:
Group
31 December 2012
Trade and other receivables*
Financial assets designated at fair value
through profit or loss
Secured bank loans

Unsecured notes
Trade and other payables#
Financial liabilities designated at fair
value through profit or loss
Bank overdraft
Designated
Loans and
Note at fair value receivables
$000
$000
Other
financial
liabilities
within the
scope of
FRS 39
$000
Total
carrying
amount
$000
Fair value
$000
15
11
10
13
541,232
217,717
717,359
119,059
541,232
217,717
717,359
119,059
541,232
217,888
722,251
119,059
11
21
21
1,595,367
21
1,595,388
21
1,600,451
17
17
17
16
(98,462)
(425,594)
(553,229)
(306,085)
(98,462)
(425,594)
(553,229)
(306,085)
(98,462)
(425,594)
(582,816)
(306,085)
16
17
(81)
(81)
(41,456)
(1,424,826)
(81)
(41,456)
(1,424,907)
(81)
(41,456)
(1,454,494)
* Excluding derivatives (shown separately) and prepayment.

# Excluding progress payments from customers and derivatives (shown separately).
97
ANNUAL REPORT 2012

HYFLUX LTD
Group
31 December 2011
Secured bank loans

Unsecured notes
Bank overdraft
98
Total
carrying
amount
$000
Fair value
$000
15
11
10
13
662,358
241,172
423,257
176,910
662,358
241,172
423,257
176,910
662,358
241,356
424,527
176,910
11
546
546
1,503,697
546
1,504,243
546
1,505,697
17
17
17
16
(84,578)
(183,208)
(541,693)
(213,890)
(84,578)
(183,208)
(541,693)
(213,890)
(84,578)
(183,208)
(563,951)
(213,890)
(20,943)
(1,044,312)
(395)
(20,943)
(1,044,707)
(395)
(20,943)
(1,066,965)
Other
financial
liabilities
within the
scope of
FRS 39
$000
Total
carrying
amount
$000
Fair value
$000
176,216
1,247,733
1,423,949
176,216
1,247,733
1,423,949
16
17
(395)
(395)
* Excluding derivatives (shown separately) and prepayments.

# Excluding progress payments from customers and derivatives (shown separately).
Company
Designated
Loans and
$000
$000
Other
financial
liabilities
within the
scope of
FRS 39
$000
Designated
Loans and
$000
$000
31 December 2012
15
11
176,216
1,247,733
1,423,949

Unsecured notes
17
17
16
* Excluding prepayments.
(365,290)
(553,229)
(34,813)
(953,332)
(365,290)
(553,229)
(34,813)
(953,332)
(365,290)
(582,816)
(34,813)
(982,919)

LEADING THE WAY
Company
Designated
Loans and
$000
$000
31 December 2011

Unsecured notes
Other
financial
liabilities
within the
scope of
FRS 39
$000
Total
carrying
amount
$000
Fair value
$000
15
11
96,407
1,170,663
96,407
1,170,663
96,407
1,170,663
11
514
514
1,267,070
514
1,267,584
514
1,267,584
17
17
16
(120,556)
(541,693)
(135,213)
(120,556)
(541,693)
(135,213)
(120,556)
(563,951)
(135,213)
(797,462)
(354)
(797,816)
(354)
(820,074)
16
(354)
(354)
* Excluding derivatives (shown separately) and prepayments.

# Excluding derivatives (shown separately).
Interest rates used for determining fair value
The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the
reporting date plus an adequate credit spread, and are as follows:
Group
Amounts due from associates (non-trade)

Unsecured notes
2012
2011
6.0%
3.0%
2.18% - 4.78%
6.0%
3.0%
2.36% -4.45%
99
ANNUAL REPORT 2012

HYFLUX LTD
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.
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
$000
Level 2
$000
Level 3
$000
Total
$000
Group
31 December 2012
Derivatives
31 December 2011
Derivatives
(60)
(60)
(60)
(60)
151
151
151
151
160
160
160
160
Company*
31 December 2011
Derivatives
100
* none as at 31 December 2012

LEADING THE WAY
21 Revenue
Group
Construction revenue
Operating and maintenance income
Sale of goods
Finance income
Finance lease income
Others
22
2012
$000
2011
$000
605,971
49,331
16,633
8,294
331
1,824
682,384
418,530
39,001
15,576
6,755
394
1,719
481,975
Finance costs
Group
Interest expense - bank loans
2012
$000
2011
$000
28,460
22,597
23 Profit before income tax

The following items have been included in arriving at profit before income tax:
Group
Net foreign currency exchange loss

Rental income from leasehold property
Interest income:
- fixed deposits with financial institutions
- associates
Fair value loss on derivative financial instruments
Gain on sale of property, plant and equipment
Impairment of trade and other receivables
Financial receivables written off
Operating lease expense
Professional fees paid to firms in which a director is member
2012
$000
2011
$000
3,151
(920)
2,123
(1,025)
(2,287)
895
(5,223)
520
15,158
164
(775)
(2,266)
594
(11,899)
2,889
3,056
8,884
279
101
ANNUAL REPORT 2012

HYFLUX LTD
Group
Contribution to defined contribution plans, included in staff costs

Employees share option expense, included in staff costs
Research expense
Audit fees paid to:
- auditors of the Company
- other member firms of KPMG International
- other auditors
Non-audit fees paid to:
- auditors of the Company
- other member firms of KPMG International
24
2012
$000
2011
$000
7,050
2,810
1,423
6,531
1,038
1,380
527
183
68
579
218
88
35
-
28
49
Tax expense
Group
Current tax expense

Current year
Over provided in prior years
Deferred tax expense
Origination and reversal of temporary differences
2012
$000
2011
$000
13,021
(1,567)
11,454
11,655
(3,292)
8,363
831
831
(2,006)
(39)
(2,045)
12,285
6,318
76,998
62,043
Income tax using Singapore tax rate of 17%

Effect of different tax rates in foreign jurisdictions
Tax exempt income
Non-deductible expenses
Effect of partial tax exemption and tax reliefs
13,090
472
(1,091)
3,902
(2,521)
(1,567)
12,285
10,547
998
(2,199)
5,558
(5,255)
(3,331)
6,318
Tax expense
Reconciliation of effective tax rate
102
A subsidiary was granted Pioneer Status in Singapore in respect of the production and sale of membrane systems.
Accordingly, the subsidiary enjoys tax exemption on income arising from sale of membrane systems subject to the terms
and conditions of the Pioneer Status.

LEADING THE WAY
Another subsidiary was awarded a 7-year Development and Expansion Incentive. Qualifying income earned during this
period is taxed at a concessionary rate of 5%.
In accordance with the Income Tax Law of the Peoples Republic of China for Enterprises with Foreign Investment and
Foreign Enterprises, certain subsidiaries are entitled to full exemption from Enterprise Income Tax (EIT) for the first two
years and a 50% reduction in EIT for the next three years, commencing from the first profitable year after offsetting all
tax losses carried forward from the previous five years. A new Corporate Income Tax Law which took effect on 1 January
2008 stated that subsidiaries in the Peoples Republic of China which have not utilised their five-year tax concessions under
the old tax law were required to utilise their first year of tax concession commencing from 2008. In addition, one of the
subsidiaries has High-Technology Status which is subject to a tax rate of 15%.
Subsidiaries incorporated in the British Virgin Islands (BVI) are exempt from income taxes in BVI in accordance with local tax
laws.
25
Earnings per share
Basic earnings per share
The calculation of basic earnings per share at 31 December 2012 was based on the profit attributable to ordinary shareholders
of $36,994,000 (2011: $37,027,000), and a weighted average number of ordinary shares outstanding of 835,839,000 (2011:
860,219,000), calculated as follows:
Profit attributable to ordinary shareholders
Group
Profit for the year

Dividends on CPS
Profit attributable to ordinary shareholders
2012
$000
2011
$000
60,994
(24,000)
36,994
53,027
(16,000)
37,027
Weighted average number of ordinary shares

Group
Note
Issued ordinary shares at 1 January

Effect of own shares held
Effects of share options exercised
Weighted average number of ordinary shares at 31 December
18
2012
000
2011
000
858,679
(23,128)
288
835,839
857,931
(345)
2,633
860,219
103
ANNUAL REPORT 2012

HYFLUX LTD
Diluted earnings per share
The calculation of diluted earnings per share at 31 December 2012 was based on profit attributable to ordinary shareholders
of $36,994,000 (2011: $37,027,000), and a weighted average number of ordinary shares outstanding after adjustment for the
effects of all dilutive potential ordinary shares of 837,238,000 (2011: 865,451,000), calculated as follows:
Weighted average number of ordinary shares (diluted)
Group
Weighted average number of ordinary shares (basic)

Effect of share options on issue
Weighted average number of ordinary shares (diluted) at 31 December
2012
000
2011
000
835,839
1,399
837,238
860,219
5,232
865,451
The average market value of the Companys shares for purposes of calculating the dilutive effect of share options was based
on quoted market prices for the period during which the options were outstanding.
26
Segment Reporting
(a) Operating segments

104
The Group has two reportable segments, as described below, which are the Groups strategic business units. The
strategic business units offer different products and services, and are managed separately because they require
different technology and marketing strategies. For each of the strategic business units, the Groups 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 Groups reportable segments:

Municipal. Supplier of comprehensive range of innovative water and fluid treatment solutions to municipalities
and governments, including commissioning, operation and maintenance of a wide range of water treatment
and liquid separation plants on a turnkey or Design-Build-Own-Operate-Transfer arrangements.
Industrial. Liquid separation applications for the manufacturing sector such as the pharmaceutical,
biotechnology, food processing and petrochemical oil-related industries.
Other operations include emerging segments such as the renewable resources management business. None of
these segments meets any of the quantitative thresholds for determining reportable segments in 2012 or 2011.
Information regarding the results of each reportable segment is included below. Performance is measured based on
segment profit before income tax, as included in the internal management reports that are reviewed by the Groups
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.
Inter-segment pricing is determined on an arms length basis.
(b)
Geographical segments
The Group operates in 3 principal geographical areas: Asia ex-China, China and Middle East & North Africa. In
presenting information on the basis of geographical segments, segment revenue is based on the geographical
location of customers. Segment assets are based on the geographical location of the assets.

LEADING THE WAY
Information about reportable segments
Municipal
2012
2011
$000
$000
External revenues
Industrial
2012
2011
$000
$000
All other
segments
2012
2011
$000
$000
Total
2012
$000
2011
$000
629,146
417,816
49,831
58,784
3,407
5,375
682,384
481,975
46,416
115,225
429
2,839
8,803
703
55,648
118,767
1,811
203
1,381
1,322
3,193
1,533
(14,956)
(11,734)
(3)
(556)
(3)
(15,512)
(11,740)
Depreciation, amortisation
and impairment
(8,889)
(7,778)
(8,532)
(16,315)
(2,127)
(387)
(19,548)
(24,480)
Reportable segment profit/

(loss) before income tax
91,578
93,972
6,630
(12,800)
(2,791)
2,660
95,417
83,832
2,070
287
(418)
(1,145)
2,601
2,084
4,253
1,226
292
(12,285)
(6,318)
Inter-segment revenue
Interest income
Finance costs
Share of profit/(loss) of
associates, net of income tax
Tax (expenses)/income
(11,455)
(6,160)
261
(450)
(1,091)
Operating lease expenses
(13,846)
(6,713)
(295)
(493)
(1,017)
(1,678)
(15,158)
(8,884)
(5,221)
(5,099)
(1,437)
(1,316)
(392)
(116)
(7,050)
(6,531)
Contribution to defined
contribution plan, included
in staff cost
Reportable segment assets
1,741,235 1,418,559
186,189
214,036
104,412
86,088 2,031,836 1,718,683
92,741
99,111
1,737
2,550
9,614
7,226
104,092
108,887
Capital expenditure
13,347
12,419
318
601
30,610
260
44,275
13,280
479,373
353,344
24,808
25,683
50,615
55,623
554,796
434,650
Reportable segment liabilities
105
ANNUAL REPORT 2012

HYFLUX LTD
Reconciliations of reportable segment revenues, profit or loss, assets and liabilities and other material items
Revenues
Total revenue for reportable segments
Other revenue
Consolidated revenue
Profit or loss
Total profit or loss for reportable segments
Other profit or loss
Unallocated amounts:
- Other corporate expenses
Consolidated profit before income tax
2011
$000
678,977
3,407
682,384
476,600
5,375
481,975
98,208
(2,791)
95,417
81,172
2,660
83,832
(22,672)
4,253
76,998
(23,015)
1,226
62,043
Assets
Total assets for reportable segments
Other assets
Other unallocated amounts
Consolidated total assets
1,927,424
104,412
104,092
214,416
2,350,344
1,632,595
86,088
108,887
204,895
2,032,465
Liabilities
Total liabilities for reportable segments
Other liabilities
Other unallocated amounts
Consolidated total liabilities
504,181
50,615
918,519
1,473,315
379,027
55,623
662,248
1,096,898
Other material items in 2012

Reportable
segment
totals
$000
Interest income
Finance costs
Capital expenditure
106
2012
$000
3,192
(14,956)
13,665
(17,421)
Adjustments
$000
120*
(13,504)*
37,607^
(11,971)^
Consolidated
totals
$000
3,312
(28,460)
51,272
(29,392)

LEADING THE WAY
Other material items in 2011

Reportable
segment
totals
$000
Interest income
Finance costs
Capital expenditure
1,525
(11,737)
13,020
(24,093)
Adjustments
$000
Consolidated
totals
$000
1,516*
(10,860)*
45,440^
(12,544)^
3,041
(22,597)
58,460
(36,637)
This represents interest income and interest expense that are not allocated to segments, as this activity is driven by
Group Treasury, which manages the cash position of the Group.
This represents capital expenditure and its related depreciation, amortisation and impairment incurred as a result
of the overall business strategy adopted by the Group. The allocation of these resources to the various reportable
segments cannot be determined.
Geographical information
Revenues
$000
Non-current
assets
$000
28,871
158,902
494,611
682,384
88,806
574,520
772,102
1,435,428
114,410
140,716
226,849
481,975
99,504
529,612
303,856
932,972
31 December 2012
Middle East & North Africa
Asia ex-China
31 December 2011
Middle East & North Africa
Asia ex-China
107
ANNUAL REPORT 2012

HYFLUX LTD
27
Determination of fair values
A number of the Groups accounting policies and disclosures require the determination of fair value, for both financial and
non-financial assets and liabilities. Fair values have been determined for measurement and disclosure purposes based on
the following methods. When applicable, further information about the assumptions made in determining fair values is
disclosed in the notes specific to that asset or liability.
The fair value of property, plant and equipment recognised as a result of a business combination is based on market values.
The market value of property is the estimated amount for which a property could be exchanged on the date of valuation
between a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had
each acted knowledgeably and willingly.
Intangible assets
The fair value of intangible assets received as consideration for providing construction services in a service concession
arrangement is estimated by reference to the fair value of the construction services provided. The fair value of the
construction services provided is calculated as the estimated total cost plus a profit margin which the Group considers
as a reasonable margin. When the Group receives an intangible asset and a financial asset as consideration for providing
construction services in a service concession arrangement, the Group estimates the fair value of intangible assets as the
difference between the fair value of the construction services provided and the fair value of the financial asset received.
The fair value of other intangible assets is based on the discounted cash flows expected to be derived from the use and
eventual sale of the assets.
The fair value of trade and other receivables, including service concession receivables, is estimated as the present value of
future cash flows, discounted at the market rate of interest at the reporting date.
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and
interest cash flows, discounted at the market rate of interest at the reporting date. For finance leases, the market rate of
interest is determined by reference to similar lease agreements.
Derivatives

The fair value of forward exchange contracts is based on their quoted price, if available. If a quoted price is not available,
then fair value is estimated by discounting the difference between the contractual forward price and the current forward
price for the residual maturity of the contract using a credit-adjusted risk-free interest rate (based on government bonds).
Intra-group financial guarantees
The value of financial guarantees provided by the Company to its subsidiaries is determined by reference to the difference
in the interest rates, by comparing the actual rates charged by the bank with these guarantees made available, with the
estimated rates that the banks would have charged had these guarantees not been made available.
108

LEADING THE WAY
Share-based payment transactions
The fair value of the employees share options is measured using the Black-Scholes standard option valuation model.
Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based
on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted
average expected life of the instruments (based on historical experience and general option holder behaviour), expected
dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance conditions
attached to the grants are not taken into account in determining the fair value of the options.
28
Financial risk management
The Group has exposure to the following risks from its use of financial instruments:

credit risk
liquidity risk
market risk
This note presents information about the Groups exposure to each of the above risks, the Groups objectives, policies and
processes for measuring and managing risk, and the Groups management of capital. Further 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 Groups risk management
framework. The Board has established the Risk Management Committee, which is responsible for developing and monitoring
the Groups risk management policies. The committee reports regularly to the Board of Directors on its activities.
The Groups 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 Groups activities.
The Group Audit Committee oversees how management monitors compliance with the Groups risk management policies
and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
The Group Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes regular reviews of
risk management controls and procedures, the results of which are reported to the Audit Committee.
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 Groups receivables from customers.
Loan and other receivables
The Groups exposure to credit risk is influenced mainly by the individual characteristics of each customer. However,
management also considers the demographics of the Groups customer base, including the default risk of the industry and
country in which customers operate, as these factors may have an influence on credit risk.
The Group has a credit policy in place which establishes credit limits for all customers and monitors their balances on an
ongoing basis.
109
ANNUAL REPORT 2012

HYFLUX LTD
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of loan
and other receivables. The main components of this allowance are a specific loss component that relates to individually
significant exposures, and a collective loss component established for groups of similar assets in respect of losses that
have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment
statistics for similar financial assets.
Guarantees

The Groups policy is to provide financial guarantees only to subsidiaries and joint ventures.
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 delivering cash or another financial asset. The Groups approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Groups reputation.
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 maintains lines of credit that can be drawn down to meet shortterm financing needs.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Groups 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.
The Group buys and sells derivatives, and also incurs financial liabilities, in order to manage market risks. All such transactions
are carried out within the guidelines set by the Risk Management Committee. Generally the Group seeks to apply hedge
accounting in order to manage volatility in profit or loss.
Capital management
The primary objective of the Groups capital management is to support the Groups growth strategy and maximise
shareholder value with the optimal capital structure.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To
maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares.
110

LEADING THE WAY
The Group monitors capital using a gearing ratio, which is net debt divided by total capital. The Group includes within net
debt, loans and borrowings, less cash and cash equivalents. Total equity of the Group represents capital for the Group.
Group

Less: Cash and cash equivalents
Net debt
Total equity
Gearing ratio
2012
$000
2011
$000
1,118,741
(541,232)
577,509
830,422
(662,358)
168,064
877,029
935,567
66%
18%
From time to time, the Group purchases its own shares on the market pursuant to the Shares Purchase Mandate (the
Mandate) obtained at the Annual General Meeting (AGM) on 26 April 2012. The Mandate is subject to renewal annually by
Shareholders at the AGM.
There were no changes in the Groups approach to capital management during the year.
The Group and its subsidiaries are not subject to externally imposed capital requirements other than the following:
(i)
Certain subsidiaries of the Group are required by the Foreign Enterprise Law of the Peoples Republic of China
(PRC) to contribute to and maintain a non-distributable Statutory Reserve Fund (SRF) whose utilisation is subject to
approval by the relevant PRC authorities (see note 18).
(ii)
The Company is required under financial covenants clause to maintain a consolidated total tangible net worth (TNW)
for the Group of not less than $160 million, consolidated net borrowings to TNW of not more than 1.5 times; and
consolidated earnings before interest, tax, depreciation and amortisation to consolidated interest expenses of at
least 3 times.
These externally imposed capital requirements have been complied with by the Company and the relevant subsidiaries for
the financial year ended 31 December 2012.
29 Operating leases

Leases as lessor
Non-cancellable operating lease rentals are payable as follows:

Group
Within one year

Between one and five years
2012
$000
2011
$000
4,900
8,994
13,894
111
ANNUAL REPORT 2012

HYFLUX LTD
29 Operating leases

Leases as lessee
Non-cancellable operating lease rentals are payable as follows:

Group
Within one year

Between one and five years
More than five years
2012
$000
2011
$000
12,286
42,478
45,115
99,879
9,984
38,635
49,474
98,093
The Group has various operating lease agreements for site equipment, membrane production facilities, office equipment,
offices and rental of land. Most leases contain renewable options and some leases contain escalation clauses. The lease
terms typically do not contain restrictions on the Groups activities concerning dividends, additional debt or further leasing.
30
Capital commitments
(i)
At 31 December 2012, the Group has outstanding commitments in respect of uncalled capital of approximately
US$5,100,000 (2011: US$5,100,000) in an associate.
(ii)
At 31 December 2012, the Group has outstanding capital commitments of $1,974,000 (2011: $23,988,000).
31 Contingencies

The Group has potential contingencies arising from the delayed completion of the construction of the Magtaa desalination
plant in Algeria in its capacity as the Engineering, Procurement and Construction (EPC) contractor. In respect of such
delays, the Group has brought several claims against the project owner for an extension of the contractual completion
date as the delay was primarily caused by various reasons that were beyond the control of the Group, including a fire that
broke out in July 2011 which destroyed key materials and equipment, as well as delay in testing and commissioning works
due to lack of power supply by the local government. Notwithstanding this, in 2012, the project owner has claimed for full
contractual liquidated damages under the EPC contract. The Group is confident that its claim for extension of time will
invalidate the liquidated damages claimed by the project owner and no contingent liabilities have been recognised as at 31
December 2012.
In another desalination project in Algeria which was completed and handed over in 2011, the Group has potential
contingencies arising from the delayed completion of a desalination plant in its capacity as the EPC contractor. The project
owner has claimed for full contractual liquidated damages due to the delay in completion under the EPC contract. On its
part, the Group has claimed for an extension of the contractual completion date as it had been prevented by the project
owner from commencing testing and commissioning works sooner than it was eventually allowed to do so. Furthermore,
the Group, in its capacity as the Operation and Maintenance contractor, has a claim against the project owner for unpaid
mobilisation fees that it is contractually entitled to. As at 31 December 2012, the Group is still in negotiation with the project
owner and no contingent liabilities have been recognised.
In a separate design and supply of a seawater desalination facility, the customer has claimed for liquidated damages from
the delay in completion. On its part, the Group in its capacity as the water technology provider for the project, has claimed
for an extension of the completion deadline as well as prolongation costs as the customer, who is responsible for the civil
and structural works for the project, was late in its deliverables thereby obstructing the timely completion of project. As at
31 December 2012, the Company is still in negotiation with the customer and no contingent liabilities or assets have been
recognised.
112

LEADING THE WAY
The Group has potential contingencies arising from delayed completion of a waste water plant construction project with
a local government agency. The delay in completion was due to, amongst other things, delays due to inclement weather,
difficult site conditions, as well as modifications of original specifications from that of tender information. As at 31 December
2012, the Group has applied for an extension to the project completion date and negotiating for variation orders for the
additional work performed. As at 31 December 2012, no contingent liabilities or assets have been recognised by the Group
in relation to the project.
On 28 February 2012, the Company announced that it has been served with an Arbitration Notice (the Notice) by the China
International Economic and Trade Arbitration Commission. The Notice relates to an arbitration (Arbitration) commenced by
an associate of the Group, Ningxia Hypow Bio-Technology Co., Ltd (the Claimant). The Arbitration claim is for an amount up
to RMB436 million for certain non-water industrial project works carried out by subsidiaries of the Group for the Claimant.
The Company and the subsidiaries involved have filed their defence as well as counterclaims against the Claimant to recover
the shareholders loan made to the Claimant, outstanding EPC payments and deposits placed with the Claimant for contract
manufacturing purposes. At 31 December 2012, the outcome of the Arbitration remains uncertain and no contingent
liabilities or assets have been recognised by the Group.
32 Related parties

Transactions with key management personnel
Key management personnel
Key management personnel of the Group are those persons having the authority and responsibility for planning, directing
and controlling the activities of the Group. The directors and management committee of the Company and the Group are
considered as key management personnel of the Company and the Group.
Key management personnel compensation comprised:

Group
Directors fees
Short-term employee benefits
Share-based payments
Comprise amounts paid/payable to:

- Directors of the Company
- Other key management personnel
2012
$000
2011
$000
550
3,542
1,058
5,150
541
4,589
692
5,822
1,262
3,888
5,150
2,324
3,498
5,822
The directors of the Company also participate in the Hyflux Employees Share Option Scheme. Details of options granted
to the directors under the Scheme are described in note 19.
113
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HYFLUX LTD
32 Related parties

Other related party transactions
Other than as disclosed elsewhere in the financial statements, significant transactions carried out in the normal course of
business on terms agreed with related parties are as follows:
Transaction value
for the year ended
31 December
2012
2011
$000
$000
Balance outstanding
as at 31 December
2012
2011
$000
$000
Joint venture
Revenue from construction contracts
Revenue from maintenance contracts
Rental income
Service income
39,178
6,249
190
1,017
50,168
4,919
170
980
29,954
4,446
332
914
25,470
3,458
155
976
Associates
Revenue from construction contracts
Revenue from maintenance contracts
1,091
28,965
74,751
18,991
38,259
5,318
84,391
2,159
Group
33
Subsequent events
On 5 March 2013, the Company granted 2,180,000 share options pursuant to Hyflux Employees Share Option Scheme 2011
at an exercise price of $1.396 per share. The validity period of options granted is from 5 March 2013 to 4 March 2023.
114

LEADING THE WAY
Introduction
Hyflux Ltd (the Company) continues to place great importance on the governance of the Company and its subsidiaries (together,
the Group), which it believes is vital to its well being and success. The Company is committed to maintaining high standards of
corporate governance and processes that will enhance the Groups effectiveness, ensure the appropriate degree of accountability
and transparency and an increase in long term value and return to shareholders.
The Group subscribes to the Singapore Code of Corporate Governance issued by the Monetary Authority of Singapore (Code)
and believes that this forms a sound platform for supporting good corporate governance practices.
This corporate governance statement ("Statement") outlines the main corporate governance practices of the Group with specific
reference made to the principles and guidelines of the Code, forming part of the continuing obligations set out in the Listing
Manual of Singapore Exchange Securities Trading Limited ("SGX-ST") .
The Company will continue to review and refine its practices in light of best practices in the market, consistent with the needs and
the circumstances of the Group.
In developing the appropriate corporate governance practices, the Group takes into account all applicable legislations and
recognised standards. The Company is committed to instilling and maintaining good corporate governance at all times.
The Board is pleased to report that throughout the reporting period for the financial year ended 31 December 2012, the Company
complied with the Codes applicable principles and guidelines.
BOARD MATTERS
BOARDS CONDUCT OF ITS AFFAIRS:
Principle 1: Effective Board to lead and control the Company
Role of the Board
The primary role of the Companys board of directors (Board) is to protect and enhance long-term shareholders' value and
to ensure that the Company is run in accordance with best international management and corporate governance practices,
appropriate to the needs and development of the Company.
The Board is responsible for general oversight of the Companys activities and performance and for setting the Companys
overall strategic direction. It provides leadership and guidance on corporate strategies, business directions, risk policies and
implementation of corporate objectives, thereby taking responsibility for the overall corporate governance of the Group.
In delegating responsibility for the day-to-day operation and leadership of the Company to the Executive Chairman and Chief
Executive Officer and the management team, the Board has processes and systems in place to ensure that significant issues, risks
and major strategic decisions are monitored and considered at Board level.
To assist in the execution of its responsibilities, the Board has established several Board Committees, namely, Audit Committee,
Nominating Committee, Remuneration Committee and Risk Management Committee. These Board Committees function within
clearly defined terms of reference, which are reviewed on a regular basis.
Matters which are specifically reserved to the full Board for decision are those involving material acquisitions, disposal of assets,
corporate or financial restructuring, share issuances, dividends and other returns to shareholders, conflict of interest for substantial
shareholder or Director, as well as interested person transactions.
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The meeting schedules of all the Board and Board Committees for the calendar year are given to all Directors well in advance. The
Board may convene additional meetings to address any specific significant matters that may arise from time to time.
The Articles of Association of the Company provide for Directors to conduct meetings by teleconferencing or videoconferencing.
The Board and Board Committees may also make decisions by way of circulating resolutions.
The Board held four meetings in the 2012 financial year. A summary of attendance by Directors at Board and Board Committees
meetings for the financial year ended 31 December 2012 is as follows:
Board of Directors
Name of Directors
Olivia Lum Ooi Lin
Teo Kiang Kok
Lee Joo Hai
Gay Chee Cheong
Christopher
Murugasu
Rajsekar
Kuppuswami Mitta
Simon Tay
Gary Kee Eng Kwee
Audit Committee
Nominating
Committee
Remuneration
Committee
Risk Management
Committee
No. of
Meetings
Held
No. of
Meetings
Attended
No. of
Meetings
Held
No. of
Meetings
Attended
No. of
Meetings
Held
No. of
Meetings
Attended
No. of
Meetings
Held
No. of
Meetings
Attended
No. of
Meetings
Held
No. of
Meetings
Attended
4
4
4
4
3
4
4
4
4
NA
4
4
3*
NA
4
4
2
2
NA
2
2
2
NA
2
2
2
2
2
2*
2
2
2
5
5
5
NA
5*
4
5
NA
NA
NA
NA
NA
4
4
4
4
3
4
4
NA
4
3
NA
4
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
5
5
1
4
5
1*
Legend:
* Attendance by invitation
NA Not Applicable
The Company has adopted a set of Policy on Signing Limits, setting out the level of authorization required for specific transactions,
including those that require Boards approval.
Newly appointed Directors are provided with a training and induction programme, so as to familiarise them with the Companys
business activities, strategic directions, policies and new key projects. In addition, newly appointed Directors are also introduced
to the senior management team.
Directors are updated from time to time on changes in relevant laws and regulations; industry developments and business
initiatives; and analyst and media commentaries on matters related to the Company and water industry.
BOARD COMPOSITION AND GUIDANCE
Principle 2: Strong and independent element on the Board
As at the date of this Statement, the Board comprises eight Directors, of whom six are Non-Executive Independent Directors.
116

LEADING THE WAY
Composition of Board and Board Committees
Name of Directors
Olivia Lum Ooi Lin
Board
Executive Chairman and
Director
Teo Kiang Kok
Lead
Independent Director
Lee Joo Hai
Non-Executive
Gay Chee Cheong
Non-Executive
Non-Executive
Rajsekar Kuppuswami Mitta Non-Executive
Simon Tay
Non-Executive
Gary Kee Eng Kwee
Non-Executive
Non-Independent Director
Audit
Committee
Nominating
Committee
Member
Remuneration
Committee
Risk Management
Committee
Chairman
Member
Member
Member
Member
Chairman
Member
Member
Member
Chairman
Member
Member
Chairman
Member
Member
The Board considers an independent Director as one who has no relationship with the Company, its related companies or its
officers that could interfere or be reasonably perceived to interfere, with the exercise of the Directors independent business
judgment acting in the interests of the Company. The Companys policy is to have independent Directors make up at least half of
the Board.
While all the Directors have equal responsibilities for the performance of the Group, Non-Executive Directors exercise no
management function in the Company or any of its subsidiaries. The role of Non-Executive Directors is primarily to ensure that the
strategies proposed by the management are fully discussed, vigorously examined, taking into consideration the long-term interest
of the shareholders, employees, customers, suppliers and the communities in which the Group conducts its business.
The Board is of the view that there is a strong and independent element on the Board in that all Directors, other than Ms Olivia Lum
Ooi Lin and Mr Gary Kee Eng Kwee, are Independent Directors. The present Board size and number of Board Committees facilitate
effective decision making and is appropriate for the nature and scope of the Groups business and operations.
The Board believes the composition of the Board requires consideration of a number of factors, including the mix in skills, abilities
and expertise, the mix in the length of time Directors have had on the Board, as well as experience on other boards.
The Board consists of respected business leaders and professionals whose collective core competencies and experience are
extensive, diverse and relevant to the Group. The names, qualifications and relevant skills, experience and expertise of the Directors
can be found on pages 8 to 10 of this report. As evidenced by this information, the Directors bring to the Board a broad range of
experience and expertise.
Where necessary, the Company arranges informal meeting sessions for Independent Directors to meet without the presence of
the management.
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HYFLUX LTD
CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Principle 3: Clear division of responsibilities at the top of the Company
Ms Olivia Lum Ooi Lin is the Executive Chairman and Chief Executive Officer of the Company. The Board considers that vesting
two roles in the same person provides the Group with strong and consistent leadership in the development and execution of the
Groups business strategies and is beneficial to the Group.
In compliance with the Code, the Board had appointed Mr Teo Kiang Kok as Lead Independent Director on 22 February 2012. If
shareholders of the Company have serious concerns for which contact through the normal channels of the Executive Chairman
and Chief Executive Officer or the Chief Financial Officer have failed to resolve or is inappropriate, they may contact the Lead
Independent Director.
The Board is of the opinion that the process of decision making by the Board has been independent, based on collective decisions
without any individual exercising any considerable concentration of power or influence.
BOARD MEMBERSHIP
Principle 4: Formal and transparent process for appointment of new directors to the Board
The Nominating Committee (NC) has been tasked by the Board to identify, select and recommend individuals with the appropriate
skills, expertise and experience for appointment, thereby ensuring a balanced and effective Board at all times.
The NC comprises four Directors:
Mr Teo Kiang Kok (Chairman)
Mr Gay Chee Cheong
Ms Olivia Lum Ooi Lin
Mr Christopher Murugasu

The primary function and duties of the NC are outlined as follows:
1.
to make recommendations to the Board on all Board appointments and re-nominations having regard to the composition and
each Directors competencies, commitment, contribution and performance (e.g. attendance, preparedness, participation,
candour, and any other salient factors);
2.
to ensure that all Directors would be required to submit themselves for re-nomination and re-election at regular intervals
and at least once in every three years;
3.
to determine annually whether a Director is independent, in accordance with the independence guidelines set out in the
Code;
4.
to review whether a Director is able to and has adequately carried out his duties as a Director of the Company, in particular
where the Director concerned has multiple board representations; and
5.
to consider how the Boards performance may be evaluated and to propose objective performance criteria.
118

LEADING THE WAY
In carrying out the annual assessment of the independence of the Non-Executive Directors, the NC considered the following
attributes and contributions of all the Non-Executive Independent Directors and found that the length of tenure does not have any
impact on their independence:
1.
2.
3.
The Non-Executive Independent Directors provide their objective and constructive views to the Board and management;
The Non-Executive Independent Directors always speak up and offer practical solutions to issues and work towards
increasing value of the Group for the benefit of all shareholders; and
The Non-Executive Independent Directors evaluate and assess the information provided to the Board in an independent
and constructive manner and render such advice as may be necessary to assist management to implement plans/policies
adopted by the Group.
The NC believes that the Non-Executive Independent Directors experience and knowledge of the Groups business, combined
with their external business and professional experience enable them to provide effective challenges and make constructive
contributions to management discussions.
In addition, all the Non-Executive Independent Directors have made written confirmations to their independence in accordance
with the Code and the SGX-STs Listing Manual.
Accordingly, the NC is of the view that in respect of financial year ended 31 December 2012, Mr Teo Kiang Kok, Mr Lee Joo Hai,
Mr Gay Chee Cheong, Mr Rajsekar Kuppuswami Mitta, Mr Christopher Murugasu and Mr Simon Tay are independent. The Board
accepts the NCs view and affirms the independence of the Non-Executive Independent Directors.
The NC has recommended the nomination of Directors retiring by rotation under the Companys Articles of Association, namely,
Mr Lee Joo Hai and Mr Gay Chee Cheong.
In reviewing the nomination of the retiring Directors, the NC considered the performance and contribution of each of the retiring
Directors, having regard not only to their attendance and participation at Board and Board Committees meetings but also the time
and efforts devoted to the Groups business and affairs.
BOARD PERFORMANCE
Principle 5: Formal assessment of the effectiveness of the Board as a whole and contributions by each Director
The Code recommends that the NC be responsible for assessing the effectiveness of the Board as a whole and the individual
Directors contribution. The NC believes that it is more appropriate and effective to assess the Board as a whole, bearing in mind
that each member of the Board contributes in different ways to the success of the Group.
The NC in conducting the evaluation and appraisal process focuses on a set of performance criteria which includes the evaluation of
the size and composition of the Board, the Boards access to information, Board processes and accountability, Board performance
in relation to discharging its principal responsibilities and the Directors standards of conduct.
The Board is of the view that the financial indicators, as set out in the Code as a guide for the evaluation of the Board and its
Directors, may not be appropriate as they are more relevant as a form of measurement of the managements performance. The
NC conducted a Board performance evaluation to assess the effectiveness of the Board throughout the financial year ended 31
December 2012 and is satisfied that sufficient effort, time and attention have been given by the Directors to the affairs of the Group.
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ACCESS TO INFORMATION
Principle 6: Board members to have complete, adequate and timely information
The Board has separate and independent access to senior management of the Company, the Company Secretary and the external
auditors at all times. The Directors also have unrestricted access to the Companys records and information, all minutes of meetings
held by the Board and Board Committees and management accounts to enable them to carry out their duties.
The Company Secretary attends all Board and Board Committees meetings. The Company Secretary administers, attends and
prepares minutes of the Board and Board Committees meetings, and assists in ensuring that Board procedures are followed
and reviewed in accordance with the Companys Articles of Association so that the Board functions effectively and the relevant
rules and regulations applicable to the Company are complied with. The Company Secretarys role is to advise the Board on all
governance matters, ensuring that legal and regulatory requirements, as well as Board policies and procedures are complied with.
The appointment and the removal of the Company Secretary are subject to the Boards approval.
Should Directors, whether as a group or individually, require professional advice, the Company shall upon the direction of the
Board, appoint a professional advisor selected by such Director(s), approved by management, to render the service. The costs of
such service shall be borne by the Company.
PROCEDURES FOR DEVELOPING REMUNERATION POLICIES
Principle 7: Formal and transparent procedure for fixing remuneration packages of Directors and senior management
The Remuneration Committee (RC) comprises four Directors:
Mr Gay Chee Cheong (Chairman)
Mr Teo Kiang Kok
Mr Christopher Murugasu
Mr Lee Joo Hai
The RC is committed to the principles of accountability and transparency; and it ensures that remuneration arrangements
demonstrate a clear link between reward and performance.
The RC is responsible for ensuring a formal and transparent procedure for developing policy on executive remuneration, and for
fixing the remuneration packages of individual Director and senior management employees.
The RCs review covers all aspects of remuneration, including but not limited to Directors fees, salaries, allowances, bonus,
employees' share options and benefits in kind and specific remuneration package for each Director.
In structuring a compensation framework for Executive Director and senior management employees, the RC seeks to link a
proportion of the compensation to the Groups performance. The RC also reviews and recommends to the Board the remuneration
package for the Non-Executive Directors. Its recommendations are submitted for endorsement by the Board. The RC, when
deemed necessary, may obtain expert advice with regard to remuneration matters.
LEVEL AND MIX OF REMUNERATION
Principle 8: The level and structure of remuneration for Directors and senior management should be adequate, not excessive, and
linked to performance
The remuneration policy of the Company is to provide compensation packages at market rates, reward performance and attract,
retain and motivate Directors and members of the senior management team.
120

LEADING THE WAY
The Executive Director does not receive Directors fees. The Executive Director and senior management employees remuneration
packages are based on service contracts and their remuneration is determined having due regard to the performance of the
individuals, the Group as well as market trends.
Non-Executive Independent Directors are paid yearly Directors fees of an agreed amount based on their contributions, taking
into account factors such as effort and time spent, responsibilities of the Directors and the need to pay competitive fees to attract,
motivate and retain the Directors.
DISCLOSURE ON REMUNERATION
Principle 9: Clear disclosure of remuneration policy, level and mix of remuneration, and the procedure for setting the remuneration
An appropriate and attractive level of remuneration has been set to attract, retain and motivate Directors and employees. The
remuneration package for Executive Director and employees consists of both fixed and variable components. The variable
component is determined based on the performance of the individual employee and the Groups performance in the relevant
financial year. Annual increments and adjustments to remuneration are reviewed and approved taking into account the outcome
of the annual appraisal of the employees.
Non-Executive Directors are paid Directors fees that are subject to shareholders approval at the Companys Annual General
Meeting (AGM). The RC recommends a total Directors fees of S$550,000 be paid to Non-Executive Directors for the financial
year ended 31 December 2012. This will be tabled for the shareholders approval at the forthcoming AGM.
The following table sets out the summary compensation table for Directors and top five key executives for the financial year ended
31 December 2012:
Salary
Bonus
Fees
Employees
Share option
Scheme
DIRECTORS
Between S$1,000,000 to S$1,250,000
Olivia Lum Ooi Lin
49%
4%
0%
44%
3%
100%
Below S$250,000
Gay Chee Cheong
Lee Joo Hai
Teo Kiang Kok
Simon Tay
Gary Kee Eng Kwee
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
73%
75%
73%
68%
71%
93%
93%
27%
25%
27%
32%
29%
7%
7%
0%
0%
0%
0%
0%
0%
0%
100%
100%
100%
100%
100%
100%
100%
TOP FIVE KEY EXECUTIVES

Between S$1,000,000 to S$1,250,000
Olivia Lum Ooi Lin
49%
4%
0%
44%
3%
100%
S$750,000 to S$1,000,000
Sam Ong
60%
20%
0%
11%
9%
100%
Below S$750,000
Cho Wee Peng
Winnifred Heap
Oon Jin Teik
Andrew Ngiam
64%
62%
70%
72%
21%
21%
18%
18%
0%
0%
0%
0%
12%
14%
9%
8%
3%
3%
3%
2%
100%
100%
100%
100%
Allowances
and other
benefits
Total
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Immediate Family members of Directors

There are no immediate family members of Directors or controlling shareholders in employment with the Group and whose
remuneration exceeds S$150,000 during financial year ended 31 December 2012.
ACCOUNTABILITY
Principle 10: Board should present a balanced and understandable assessment of the Companys performance, position and
prospects
The Board promotes timely and balanced disclosure of all material matters concerning the Group. It updates shareholders on
the operations and financial position of the Group through quarterly, half yearly and full year results announcements as well as
timely announcements of other matters as prescribed by the SGX-STs Listing Manual requirements and other relevant rules and
regulations.
The Board is accountable to shareholders for the management of the Group and the management is accountable to the Board by
providing the Board with the necessary information for the discharge of its duties.
AUDIT COMMITTEE
Principle 11: Establishment of Audit Committee with written terms of reference
The Audit Committee (AC) comprises four Directors:
Mr Lee Joo Hai (Chairman)
Mr Gay Chee Cheong
Mr Rajsekar Kuppuswami Mitta
Mr Gary Kee Eng Kwee
In accordance with the principles in the Code, the AC comprises all Non-Executive Directors. The members of AC, collectively,
have expertise and extensive experience in accounting, financial management and business, and are qualified to fulfill the ACs
responsibilities.
The primary functions of the AC are as follows:
1.
assists the Board in discharging its statutory responsibilities on financial and accounting matters;
2.
reviews the financial and operating results and accounting policies of the Group;
3.
reviews significant financial reporting issues and judgments relating to financial statements for each financial year, interim
and annual results announcement before submission to the Board for approval;
4.
reviews the adequacy of the Companys internal control (financial and operational) and risk management policies and
systems established by the management;
5.
reviews the audit plans and reports of the external and internal auditors and considers the effectiveness of the actions taken
by management on the auditors recommendations;
6.
appraises and reports to the Board on the audits undertaken by the external and internal auditors, the adequacy of the
disclosure of information, and the appropriateness and quality of the system of management and internal controls;
7.
reviews the independence of external auditors annually and considers the appointment or re-appointment of external
auditors and matters relating to the resignation or removal of the auditors and approves the remuneration and terms of
engagement of the external auditors; and
8.
reviews interested person transactions, as defined in the SGX-STs Listing Manual.
122

LEADING THE WAY
In fulfilling its responsibilities, the AC receives regular reports from the management and the external auditors, Messrs KPMG LLP.
The AC has full access to and co-operation of the management and meets with Messrs KPMG LLP in private at least once a year,
and more frequently if necessary.
The AC reviewed all the non-audit services provided by the external auditors and the aggregate amount of audit fees paid to them.
The AC is satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external
auditors; hence has recommended the re-appointment of Messrs KPMG LLP as external auditors of the Company at the coming
AGM of the Company.
The AC has explicit authority within the scope of its responsibilities to seek any information it requires or investigate any matter
within its terms of reference. The AC has adequate resources to enable it to discharge its responsibilities properly.
The Board has put in place a confidential communication programme as endorsed by the AC. Employees may, in confidence, raise
concerns about possible corporate improprieties in matters of financial reporting or other matters and to ensure that arrangements
are in place for the independent investigations of such matters and for appropriate follow up actions. The details of the confidential
communication programme and arrangements have been made available to all employees.
INTERNAL CONTROLS
Principle 12: The Board to ensure that the management maintains a sound system of internal controls to safeguard the shareholders
investments and the Companys assets
The AC is fully aware of the need to put in place a system of internal controls within the Group to safeguard the shareholders
interests and the Groups assets, and to manage risks. The system is intended to provide reasonable but not absolute assurance
against material misstatements or loss, and to safeguard assets and ensure maintenance of proper accounting records, reliability
of financial information, compliance with appropriate legislations, regulations and best practices, and the identification and
containment of business risks.
The Board regularly reviews and improves its business and operational activities to identify areas of significant business risks as
well as taking appropriate measures to control and mitigate these risks. The management reviews all significant control policies
and procedures and highlights all significant matters to the AC and the Board. The financial risk management objectives and
policies are outlined in the financial statements. Risk management alone does not guarantee that business undertakings will not
fail. However, by identifying and managing risks that may arise, the Board is in a position to make more informed decisions and will
benefit from a better balance between risk and reward. This will assist in protecting and creating shareholders value.
The AC, together with the Board, have reviewed the effectiveness of the Groups system of internal controls put in place to address
the key financial, operational and compliance risks affecting the operations.
Based on the reports submitted by internal and external auditors, and reviews by the management, the Board with the concurrence
of the AC are satisfied that the internal control systems put in place to address the key financial, operational and compliance risks
affecting the operations are adequate to meet the needs of the Group in its current business environment as at 31 December 2012.
INTERNAL AUDIT
Principle 13: Setting up independent internal audit function
The Board has put in place a dedicated team of internal auditors. The internal audit function includes reviewing the effectiveness
of the material internal controls of the Group. The head of internal audit reports directly to the Chairman of the AC and has
an appropriate standing within the Group. The AC meets with the internal auditor in private at least once a year. The AC also
ensures that the internal audit function is adequately resourced, and reviews annually the adequacy of the internal audit function.
The internal audit team meets the standards set by nationally and internationally recognized professional bodies including the
Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors.
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Within this framework, the internal audit function provides reasonable assurance that the risks incurred by the Group in each
major activity will be identified, analysed and managed by management. The internal auditors will also make recommendations to
enhance the effectiveness and security of the Groups operations.
COMMUNICATION WITH SHAREHOLDERS
Principle 14: Regular, effective and fair communication with shareholders
Principle 15: Shareholders participation at AGM
The Company is committed to regular and proactive communication with its shareholders. It aims to provide shareholders with
clear, balanced, useful and material information on a timely basis to ensure that shareholders receive a balanced and up-to-date
view of the Groups performance and business.
Communication is made through:
1.
an annual report that is prepared and issued to all shareholders. The Board makes every effort to ensure that the annual
report includes all relevant information about the Group, including future development and other disclosures required by
the Companies Act, Chapter 50, and Singapore Statements of Accounting Standards;
2.
quarterly and full-year financial statements comprising a summary of the financial information and affairs of the Group for
the relevant period;
3.
explanatory memoranda for AGM and extraordinary general meetings;
4.
press releases on major developments of the Group;
5.
disclosures to the SGX-ST via SGXNET; and
6.
the Groups website at http://www.hyflux.com at which shareholders can access information on the Group at all times.
In addition, shareholders are encouraged to attend the Companys AGM to ensure a high level of accountability and to stay
informed of the Groups strategies and growth.
In accordance with the principles in the Code, the full Board of Directors and the external auditors in office are required to attend
the Companys AGM and will address any question raised at such meeting. The Group fully supports the Codes principle to
encourage active shareholder participation.
RISK MANAGEMENT COMMITTEE
The Risk Management Committee (RMC) comprises four Directors:
Mr Rajsekar Kuppuswami Mitta (Chairman)
Mr Lee Joo Hai
Mr Teo Kiang Kok
Mr Simon Tay
124

LEADING THE WAY
The functions of the RMC are as follows:

1.
to review with management, and, where needed, with external consultants on areas of risk that may affect the viability and
smooth operations of the Group, as well as managements risk mitigation efforts, with the view of safeguarding shareholders
interest and Groups assets;
2.
to direct and work with management to develop and review policies and processes to address and manage identified areas
of risk in a systematic and structured manner;
3.
to make recommendations to the Board in relation to business risks that may affect the Group, as and when these may arise;
4.
to review new investments; and
5.
to perform any other functions as may be agreed by the Board.
Management Committee
The Management Committee comprises the following members:
Ms Olivia Lum Ooi Lin (Chairman)
Mr Sam Ong
Mr Cho Wee Peng
Ms Winnifred Heap
Mr Oon Jin Teik
Dr Andrew Ngiam
Mr Peter Wu
DEALING IN SECURITIES
The Company has adopted its own internal compliance code pursuant to the SGX-STs best practices on dealings in securities and
these are applicable to all its officers in relation to their dealings in the Companys securities. Its officers are advised not to deal
in the Companys shares during the period commencing two weeks or one month before the announcement of the Companys
quarterly or full-year results respectively, or if they are in possession of unpublished price-sensitive information of the Company.
All officers and employees are also not allowed to deal in the Companys securities on short-term considerations, and are expected
to observe insider trading laws at all times even when dealing in securities within the permitted trading period.
MATERIAL CONTRACTS
There are no material contracts of the Company or its subsidiaries involving the interests of the Executive Chairman and Group
CEO, each Director or controlling shareholders, either still subsisting at the end of the financial year or entered into since the end
of the previous financial year.
INTERESTED PARTY TRANSACTION
The Company has established procedures to ensure that all transactions with interested persons are reported in a timely manner
to the AC and that the transactions are at arms length basis. All interested person transactions are subject to review by the AC to
ensure compliance with established procedures.
For the financial year ended 31 December 2012, the Group did not enter into any transaction that would be regarded as an
interested person transaction pursuant to SGX-ST's Listing Manual.
125
ANNUAL REPORT 2012

HYFLUX LTD
SUPPLEMENTARY INFORMATION
MAJOR PROPERTIES
Site area
(sqm)
Existing
use
Approximate
total lettable
area (sqm)
Description
Location
Office and factory

building
80 Bendemeer Road
Singapore 339949
17,374
Industrial
36,193
30 years
commencing
from 1 February
2010
100
Factory and
warehouse
building
8 Tuas South Lane

Singapore 637302
77,172
Industrial
22,262
30 years
commencing
from 1 April
2008
100
Factory building
No. 99 Juli Road

Zhangjiang
High-Tech Park
Pudong Shanghai
China 201203
5,633
Commercial
7,647
50 years
commencing
from 1 January
2002
100
Office building
1307-1309 Centre
Plaza 188,
Jiefangbei HePing,
District Tianjin,
China 300042
384
Commercial
232
50 years
commencing
from 12 June
1994
100
Office building
1310-1312 Centre
Plaza 188,
Jiefangbei HePing,
District Tianjin,
China 300042
428
Commercial
257
50 years
commencing
from 12 June
1994
100
Office and factory
8# Factory in FTZ,
9# Yang Zi Jiang
South Road, Yangzhou
Jiangsu Province,
China 225131
18,040
Commercial
23,115
50 years
commencing
from 11
November
2005
100
Office and factory
No 99 Tai Zhen Road

Bin Jiang Industrial Park
Taizhou Economic
Development Zone
Taizhou City, Jiangsu Province
China 225300
25,959
Commercial
12,980
50 years
commencing
from 15 October
2007
100
Office and factory
Long Gang District

Beigang Industrial Park
Long Cheng Road
Huludao City
Liaoning Province
China 125003
112,556
Commercial
93,565
50 years
commencing
from 31 October
2006
100
126
Tenure
Groups
effective
interest (%)

LEADING THE WAY
As at 11 March 2013
ORDINARY SHARES

Class of shares
:
Ordinary shares
Voting rights
:
One vote per ordinary share
Total number of issued ordinary shares
:
862,527,739
No. of issued ordinary shares (excluding treasury shares)
:
825,381,739
No. of treasury shares and percentage
:
37,146,000 (4.31%)
Distribution of Ordinary Shareholdings
No. of Ordinary
Shares (excluding
Treasury Shares)
2.12
76.26
21.44
0.18
100.00
176,709
59,359,957
119,690,816
646,154,257
825,381,739
0.02
7.19
14.50
78.29
100.00
No. of
Ordinary Shares
Olivia Lum Ooi Lin

DBS Nominees Pte Ltd
Citibank Nominees Singapore Pte Ltd
HSBC (Singapore) Nominees Pte Ltd
DBSN Services Pte Ltd
Nomura Securities Singapore Pte Ltd
Murugasu Deirdre
United Overseas Bank Nominees Pte Ltd
DB Nominees (S) Pte Ltd
BNP Paribas Securities Services Singapore Pte Ltd
Raffles Nominees (Pte) Ltd
UOB Kay Hian Pte Ltd
Paramount Assets Investments Pte Ltd
Yang Chyan Yeow Aylwin
Phillip Securities Pte Ltd
Foo Hee Kiang
OCBC Nominees Singapore Private Limited
Bank of Singapore Nominees Pte Ltd
OCBC Securities Private Ltd
Merrill Lynch (Singapore) Pte Ltd
267,351,211
139,438,152
53,153,749
48,697,200
17,389,516
15,260,000
12,306,267
10,242,413
9,803,025
7,367,671
7,215,159
5,746,405
5,000,000
4,533,000
4,419,893
3,953,368
3,914,708
3,797,264
3,782,271
3,736,666
32.39
16.89
6.44
5.90
2.11
1.85
1.49
1.24
1.19
0.89
0.87
0.70
0.61
0.55
0.54
0.48
0.47
0.46
0.46
0.45
Total :
627,107,938
75.98
Size of Shareholdings
1
- 999
1,000
- 10,000
10,001
- 1,000,000
1,000,001 and above
Total :
No. of
Ordinary
Shareholders
360
12,922
3,633
30
16,945
Twenty Largest Shareholders
S/No. Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Approximately 45.83% of the Companys ordinary shares are held in the hands of the public.
Accordingly, the Company has complied with Rule 723 of the Listing Manual of SGX-ST.
127
ANNUAL REPORT 2012

HYFLUX LTD
As at 11 March 2013
6% CUMULATIVE NON-CONVERTIBLE NON-VOTING PERPETUAL CLASS A PREFERENCE SHARES
Distribution of Preference Shareholdings
Size of Shareholdings
1
1,000
10,001
Total :
999
10,000
1,000,000
No. of
Preference
Shareholders
21,802
370
13
22,185
No. of
Preference
Shares
98.27
1.67
0.06
100.00
1,933,000
722,110
1,344,890
4,000,000
48.33
18.05
33.62
100.00
No. of
Preference
Shares
537,610
176,490
163,740
117,930
100,600
79,290
53,420
50,000
17,000
14,430
12,010
11,250
11,120
10,000
10,000
8,220
8,020
8,000
8,000
7,500
13.44
4.41
4.09
2.95
2.52
1.98
1.34
1.25
0.43
0.36
0.30
0.28
0.28
0.25
0.25
0.21
0.20
0.20
0.20
0.19
1,404,630
35.13
Twenty Largest Preference Shareholders
S/No. Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
DBS Nominees Pte Ltd

Citibank Nominees Singapore Pte Ltd
HSBC (Singapore) Nominees Pte Ltd
Bank of Singapore Nominees Pte Ltd
Raffles Nominees (Pte) Ltd
United Overseas Bank Nominees Pte Ltd
BNP Paribas Nominees Singapore Pte Ltd
BNP Paribas Securities Services Singapore Pte Ltd
E M Services Pte Ltd
OCBC Nominees Singapore Private Limited
Ronny Sim
Committee of The Person and Estate of Lee Henrietta
DB Nominees (S) Pte Ltd
China Taiping Insurance (Singapore) Pte Ltd
Morgan Stanley Asia (Singapore) Securities Pte Ltd
OCBC Securities Private Limited
Olivia Lum Ooi Lin
Foo Hee Kiang
Tay Soi Lee @ Tay Lee Tee
Tay Hui Leng (Zheng Huiling)
Total :
128

LEADING THE WAY
SUBSTANTIAL ORDINARY SHAREHOLDERS

As at 11 March 2013
Name of Shareholder
Olivia Lum Ooi Lin
Mondrian Investment Partners Limited
Matthews International Capital Management, LLC
Matthews International Funds
Direct Interest
Deemed Interest
267,351,211
-
49,848,248
67,535,030
59,929,280
32.39
6.04
8.18
7.26
Note:
Mondrian Investment Partners Limited (Mondrian) is a London-based discretionary investment manager. In respect of
assets managed under investment management agreement between Mondrian and its clients, various clients (in this regard)
are the beneficial owners of holdings which are held in custody by the clients own appointed custodian.
Shares held for the benefit of accounts managed by Matthews International Capital Management, LLC.
The amount reported includes shares reported by Matthews International Capital Management, LLC which act as Investment
Advisor to the Matthews International Funds and its other clients.
129
ANNUAL REPORT 2012

HYFLUX LTD
Singapore
AcquaSpring Utility (Benghazi) Pte Ltd
AcquaSpring Utility (S) Pte Ltd
AcquaSpring Utility (Tobruk) Pte Ltd
AcquaSpring Utility (Tripoli East) Pte Ltd
Bendemeer Infrastructure Pte Ltd (formerly known as Sinolac
(Singapore) Pte Ltd)
Eflux Singapore Pte Ltd
Galaxy NewSpring Capital Pte Ltd
Galaxy NewSpring Pte Ltd
Galaxy Operation and Management Pte Ltd
HIH DahejSpring Desalination Pte Ltd
H.J. Technical Consultant Pte Ltd
Hydrochem (S) Pte Ltd
Hydrochem Desalination Technologies (Singapore) Pte Ltd
Hydrochem Engineering (S) Pte Ltd
Hydrochem Membrane Products (Singapore) Pte. Ltd.
Hyflux Academy Pte Ltd
Hyflux Aquosus (Singapore) Pte Ltd
Hyflux Asset Management Pte Ltd
Hyflux Capital (Singapore) Pte Ltd
Hyflux Cleantech Pte Ltd
Hyflux Consumer Products Pte Ltd
Hyflux Construction Engineering (Singapore) Pte Ltd
Hyflux Energy Pte Ltd
Hyflux Engineering Pte Ltd
Hyflux EPC Pte Ltd
Hyflux Filtech (Singapore) Pte Ltd
Hyflux Filtration (S) Pte Ltd
Hyflux Innovation Centre Pte Ltd
Hyflux International Engineering Pte Ltd
Hyflux International Pte Ltd
Hyflux IP Resources Pte Ltd
Hyflux Lifestyle Products (S) Pte Ltd
Hyflux Management and Consultancy Pte Ltd
Hyflux Marmon Development Pte Ltd
Hyflux Membrane Manufacturing (S) Pte Ltd
Hyflux O&M Pte Ltd
Hyflux SIP Pte Ltd
Hyflux Utility (India) Pte Ltd
Hyflux Utility (Indonesia) Pte Ltd
Hyflux Utility (Oman) Pte Ltd
Hyflux Utility WT (HCWT) Pte Ltd
Hyflux Utility WTP (DZ) Pte Ltd
Hyflux Utility WTP (FN) Pte Ltd
Hyflux Utility WTP (NNWT) Pte Ltd
Hyflux Utility WWT (HCCJ) Pte Ltd
Hyflux Utility WWT (HCHX) Pte Ltd
Hyflux Utility WWT (HCWT) Pte Ltd
Hyflux Utility WWT (ZY) Pte Ltd
Hyflux Utility WWTP (LP) Pte Ltd
130
Hyflux Utility WWTP (WH) Pte Ltd

Hyflux Water Trust
Hyflux Water Trust Management Pte Ltd
HyfluxShop Pte Ltd
Kallang Infrastructure Pte Ltd
Kallang Spring Pte Ltd
Marmon Hyflux Investments Pte Ltd
MenaSpring Utility (S) Pte Ltd
MenaSpring Utility (Tlemcen) Pte Ltd
NewSpring Utility Pte Ltd
SingSpring Trust
TuaSpring Pte Ltd
People's Republic of China

Beijing Shouren Water Engineering Co., Ltd
Eflux (Taizhou) Co., Ltd
Galaxy Operation and Management (Shanghai) Co., Ltd
Hydrochem Engineering (Shanghai) Co., Ltd
Hydrochem Desalination Technologies (Shanghai) Co., Ltd
Hydrochem Membrane and Membrane Products (Shanghai)
Co., Ltd
Hyflux (Tianjin) Sewage Disposal Co., Ltd
Hyflux (Zunyi) Sewage Disposal Co., Ltd
Hyflux Caojie Sewage Disposal (Chongqing) Co., Ltd
Hyflux Engineering Design (Shanghai) Co., Ltd
Hyflux Engineering (Shanghai) Co., Ltd
Hyflux Filtech (Shanghai) Co., Ltd
Hyflux GaoYang Sewage Disposal (ChongQing) Co., Ltd
Hyflux Hi-tech Product (Yangzhou) Co., Ltd
Hyflux Investment Consultancy and Management Service
(Tianjin) Co., Ltd
Hyflux NewSpring (Changshu) Co., Ltd
Hyflux NewSpring (Dafeng) Co., Ltd
Hyflux NewSpring (Dezhou) Co., Ltd
Hyflux NewSpring (Funing) Co., Ltd
Hyflux NewSpring (Guanyun) Co., Ltd
Hyflux NewSpring (Leping) Co., Ltd
Hyflux NewSpring (Liaoyang) Co., Ltd
Hyflux NewSpring (LiaoYangGongChangLing) Co., Ltd
Hyflux NewSpring (Nantong) Co., Ltd
Hyflux NewSpring (Nantong) WT Co., Ltd
Hyflux NewSpring (Nantong) WWT Co., Ltd
Hyflux NewSpring (Taizhou) Co., Ltd
Hyflux NewSpring (Taoyuan) Co., Ltd
Hyflux NewSpring (Tianjin) Co., Ltd
Hyflux NewSpring (Tiantai) Co., Ltd
Hyflux NewSpring (Wuxi) Co., Ltd
Hyflux NewSpring (Wuhu) Co., Ltd.
Hyflux NewSpring (Yangzhou) Co., Ltd
Hyflux NewSpring (Zunhua) Co., Ltd

LEADING THE WAY
Hyflux NewSpring Construction Engineering (Shanghai)

Co., Ltd
Hyflux NewSpring Sewage Disposal (Guanyun) Co., Ltd
Hyflux NewSpring Sewage Disposal (Rudong) Co., Ltd
Hyflux NewSpring Sewage Disposal (Funing) Co., Ltd
Hyflux NewSpring Water Treatment (Leping) Co., Ltd
Hyflux NewSpring Waste Water Treatment (Mingguang)
Co., Ltd
Hyflux NewSpring Water Treatment (Mingguang) Co., Ltd
Hyflux NewSpring Weituo WT (Chongqing) Co., Ltd.
Hyflux Newspring WT (Dafeng) Co., Ltd
Hyflux Salt Industry Technology Development (Tianjin) Co., Ltd
Hyflux Unitech (Shanghai) Co., Ltd
Hyflux Weituo Sewage Disposal (Chongqing) Co., Ltd
Hyfluxshop (Shanghai) Co., Ltd
Kunshan Eco Water Systems Co., Ltd
Langfang Hyflux NewSpring Co., Ltd
Ningxia Hypow Bio-Technology Co., Ltd
Sinolac (Huludao) Biotech Co., Ltd
Tianjin Dagang NewSpring Co., Ltd
Wuxi Hyflux NewSpring Sewage Disposal Co., Ltd

Hyflux Advanced Technology Ltd
Hyflux International Ltd
Hyflux Utility Ltd
Hyflux Water Projects Ltd
IndoSpring Utility Ltd
SinoSpring Utility Ltd
Spring China Utility Ltd
Spring Environment Ltd
Spring Utility Ltd
Europe
France
Tlemcen Desalination Investment Company SAS
Hyflux France SAS
Netherlands
Hyflux CEPAration B.V.
Hyflux CEPAration Technologies (Europe) B.V.
Netherlands Antilles
Hyflux CEPAration N.V.
Hong Kong
H.J. NewSpring Limited
Hyflux Utility Water Limited
Hyflux Utility (DF) Limited
Hyflux Utility (HLD) Limited
Hyflux Utility (LP) Limited
Hyflux Utility (PJ) Limited
Hyflux Utility (TJ) Limited
Hyflux Utility (TY) Limited
Hyflux Utility (WX) Limited
Hyflux Utility (YK) Limited
Hyflux Utility (YL) Limited
Hyflux Utility WT (GCL) Limited
Hyflux Utility WT (LY) Limited
Hyflux Utility WT (MG) Limited
Hyflux Utility WT (XC) Limited
Hyflux Utility WT (YL) Limited
Hyflux Utility WT (YKG) Limited
Hyflux Utility WTP (GY) Limited
Hyflux Utility WWT (BC) Limited
Hyflux Utility WWT (GY) Limited
Hyflux Utility WWT (MG) Limited
Hyflux Utility WWT (XC) Limited
Hyflux Utility WWT (YL) Limited
Hyflux Utility WWT (YKG) Limited
Hyflux Utility WWTP (GY) Limited
India
Hyflux Technology India Private Limited (formerly known as
Eflux Oil India Private Limited)
Hyflux Engineering (India) Private Limited
Hyflux Lifestyle Products (India) Private Limited
Swarnim DahejSpring Desalination Private Limited
Malaysia
Hyflux (Malaysia) Sdn Bhd
MENA
Algeria
Almiyah Attilemcania SPA
Hyflux Engineering Algeria EURL
Hyflux Operation & Maintenance Algeria EURL
Hyflux-TJSB Algeria SPA
Tahlyat Myah Magtaa SPA
Saudi Arabia
Lube Oil Re-refining Company
Cayman Islands
Hyflux Asset Investment (CWF) Ltd
Hyflux Asset Management (CWF) Ltd
131
ANNUAL REPORT 2012

HYFLUX LTD
Board of Directors
Board Committees:
Olivia Lum Ooi Lin (Executive Chairman and Group CEO)

Teo Kiang Kok (Lead Independent Director)
Lee Joo Hai (Non-Executive Independent Director)
Gay Chee Cheong (Non-Executive Independent Director)
Christopher Murugasu (Non-Executive Independent Director)
Rajsekar Kuppuswami Mitta (Non-Executive Independent Director)
Simon Tay (Non-Executive Independent Director)
Gary Kee Eng Kwee (Non-Executive Non-Independent Director)
Audit Committee
Lee Joo Hai (Chairman)
Gay Chee Cheong
Gary Kee Eng Kwee
Management Committee
Olivia Lum Ooi Lin (Chairman)
Sam Ong
Cho Wee Peng
Winnifred Heap
Oon Jin Teik
Andrew Ngiam
Peter Wu
Company Secretary
Lim Poh Fong
Registered Office
80 Bendemeer Road
Hyflux Innovation Centre
Singapore 339949
Tel : 65 6214 0777
Fax :65 6214 1211
Auditors
KPMG LLP
16 Raffles Quay #22-00
Hong Leong Building
Singapore 048581
Partner-in-charge (since 2010):
Lau Kam Yuen
Registrar
Boardroom Corporate & Advisory Services Pte Ltd
50 Raffles Place
#32-01 Singapore Land Tower
Singapore 048623
132
Nominating Committee
Teo Kiang Kok (Chairman)
Olivia Lum Ooi Lin
Gay Chee Cheong
Remuneration Committee
Gay Chee Cheong (Chairman)
Teo Kiang Kok
Lee Joo Hai
Risk Management Committee
Rajsekar Kuppuswami Mitta (Chairman)
Teo Kiang Kok
Lee Joo Hai
Simon Tay

LEADING THE WAY
Bankers
Agricultural Bank of China Limited,
Singapore Branch
7 Temasek Boulevard
#30-01/02/03 Suntec Tower 1
Singapore 038987
Arab Bank Plc, Singapore
80 Raffles Place
#32-20 UOB Plaza 2
Singapore 048624
Arab Banking Corporation (B.S.C)
9 Raffles Place
#60-03 Republic Plaza
Singapore 048619
Australia and New Zealand
Banking Group Limited, Singapore
Branch
10 Collyer Quay,
#30-00 Ocean Financial Centre
Singapore 049315
Bangkok Bank Public Company Limited
180 Cecil Street
Bangkok Bank Building
Singapore 069546
Bank of China Limited, Singapore Branch
4 Battery Road, 15th Floor
Bank of China Building
Singapore 049908
Bank of Communications Co., Ltd,
Singapore Branch
50 Raffles Place
#18-01 Singapore Tower
Singapore 048623
Bank of Taiwan, Singapore Branch
80 Raffles Place
#28-20 UOB Plaza 2
Singapore 048624
BNP Paribas, Singapore Branch
10 Collyer Quay #34-01
Ocean Financial Centre
Singapore 049315
Chang Hwa Commercial Bank Ltd,
Singapore Branch
No. 1 Finlayson Green, #08-00
Singapore 049246
Chinatrust Commercial Bank Co., Ltd,
Singapore Branch
8 Marina View #33-02
Asia Square Tower One
Singapore 018960
China International Capital Corporation
(Singapore) Pte. Limited
6 Battery Road #39-04
Singapore 049909
CIMB Bank Berhad, Singapore Branch

50 Raffles Place
Singapore 048623
Citibank, N.A.
8 Marina View
#21-01 Asia Square Tower 1
Singapore 018960
Credit Agricole Corporate & Investment
Bank, Singapore Branch
168 Robinson Road
#22-01 Capital Tower
Singapore 068912
DBS Bank Ltd
12 Marina Boulevard
DBS Asia Central @ Marina Bay Financial
Centre Tower 3
Singapore 018982
First Commercial Bank, Singapore
Branch
77 Robinson Road #01-01
Singapore 068896
ICICI Bank Limited
9 Raffles Place #50-01
Republic Plaza
Singapore 048619
ING Bank N.V., Singapore Branch
9 Raffles Place, #19-02 Republic Plaza,
Singapore 048619
The Hongkong and Shanghai Banking
Corporation Limited
21 Collyer Quay #01-00
HSBC Building
Singapore 049320
Japan Bank for International
Cooperation
9 Raffles Place #51-02
Republic Plaza
Singapore 048619
JPMorgan Chase Bank, N.A.
168 Robinson Road, 17th Floor
Capital Tower,
Singapore 068912
Land Bank of Taiwan, Singapore Branch
80 Raffles Place
#34-01 UOB Plaza 1
Singapore 048624
Malayan Banking Berhad
2 Battery Road
Maybank Tower
Singapore 049907
Mega International Commercial Bank
Co.,Ltd., Singapore Branch
80 Raffles Place
#23-20 UOB Plaza II

Singapore 048624
Mizuho Corporate Bank, Ltd.,
Singapore Branch
168 Robinson Road
Capital Tower #13-00
Singapore 068912
Natixis, Singapore Branch
50 Raffles Place
Singapore 048623
Norddeutsche Landesbank Girozentrale,
Singapore Branch
6 Shenton Way #16-00
DBS Building Tower 2
Singapore 068809
Oversea-Chinese Banking Corporation
Limited
65 Chulia Street
OCBC Centre
Singapore 049513
RHB Bank Berhad
90 Cecil Street #03-00
RHB Bank Building
Singapore 069531
Standard Chartered Bank
8 Marina Boulevard, Level 24
Marina Bay Financial Centre (Tower 1)
Singapore 018981
State Bank of India
135 Cecil Street #01-00
Singapore 069536
Sumitomo Mitsui Banking Corporation,
Singapore Branch
3 Temasek Avenue #06-01
Centennial Tower
Singapore 039190
The Bank of East Asia Limited,
Singapore Branch
137 Market Street
BEA Building
Singapore 048943
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Singapore Branch
9 Raffles Place #01-01 Republic Plaza
Singapore 048619
The Royal Bank of Scotland Plc
Level 23, One Raffles Quay
South Tower
Singapore 048583
United Overseas Bank Limited
1 Raffles Place
OUB Centre
Singapore 048616
133
This page has been intentionally left blank
Hyflux Ltd
80 Bendemeer Road
Singapore 339949
www.hyflux.com
Company reg. no.: 200002722Z
HYFLUX LTD
Company Registration No. 200002722Z
(Incorporated in the Republic of Singapore with limited liability)
IMPORTANT:
1. For investors who have used their CPF monies to buy Hyflux Ltds shares, this
Report is forwarded to them at the request of the CPF Approved Nominees and
is sent solely FOR INFORMATION ONLY.
2. This Proxy Form is not valid for use by CPF investors and shall be ineffective
for all intents and purposes if used or purported to be used by them.
3. CPF investors who wish to attend the Meeting as an observer must submit
their requests through their CPF Approved Nominees within the time frame
specified. If they also wish to vote, they must submit their voting instructions to
the CPF Approved Nominees within the time frame specified to enable them to
vote on their behalf.
PROXY FORM
(Please see notes overleaf before completing this Form)
(Name and NRIC No.)
I/We,
of
being a member/members of Hyflux Ltd (the Company), hereby appoint:Name
(Address)
NRIC/Passport No.
Proportion of Shareholdings
No of Shares
Address
and/or (delete as appropriate)
Name
NRIC/Passport No.
Proportion of Shareholdings
No of Shares
Address
or failing the person, or either or both of the persons, referred to above, the Chairman of the Meeting as my/our proxy/proxies to vote for
me/us on my/our behalf at the Annual General Meeting (the Meeting) of the Company to be held on 25 April 2013 at 2.00 p.m. and at
any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated
hereunder. If no specific direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment
thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to demand or to join
in demanding a poll and to vote on a poll.
No.
Resolutions
To be used on a
show of hands
For*
Against*
Ordinary Business
1
Adoption of Directors Report and Audited Accounts
2
Declaration of Dividends
3
Re-election of Lee Joo Hai as Director
4
Re-election of Gay Chee Cheong as Director
5
Approval of Directors fees
6
Re-appointment of Auditors
Special Business
7
Authority to issue shares up to 50 per centum (50%) of
the issued ordinary shares in the capital of the Company
8
Renewal of Preference Share Mandate
9
Authority to issue shares under Hyflux Employees Share
Option Scheme 2001 and Hyflux Employees Share
Option Scheme 2011
10
Renewal of Share Purchase Mandate
*
**
To be used in the
event of a poll
No. of
No. of
Votes For**
Votes Against**
Please indicate your vote For or Against, with an X within the box provided.
If you wish to exercise all your votes For or Against, please indicate with an X within the box provided. Alternatively, please
indicate the number of votes as appropriate.
Dated this ___________ day of ____________________ 2013

Signature(s) of Shareholder(s), Common Seal of Corporate Shareholder
Total Number of
Shares held
NOTES:
1.
Please insert the total number of shares held by you. If you have Shares entered against your name in the Depository Register (as defined in
Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you only have Shares registered in
your name in the Register of Members, you should insert that number of Shares. However, if you have Shares entered against your name in
the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares
entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the
instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.
2.
A Shareholder of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and
vote instead of him. A proxy need not to be a Shareholder of the Company. Where a Shareholder appoints two proxies, the proportion of the
shareholding concerned to be represented by each proxy shall be specified in the proxy form. If no percentage is specified, the first named
proxy shall be deemed to represent 100 percent of the shareholding and the second named proxy shall be deemed to be an alternate to the
first named proxy.
3.
The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 80 Bendemeer Road, Hyflux
Innovation Centre, Singapore 339949 not less than 48 hours before the time appointed for the Meeting.
fold along this line (1)
Affix
Postage
Stamp
The Company Secretary

HYFLUX LTD
80 Bendemeer Road
Singapore 339949
fold along this line (2)
4.
The instrument appointing a proxy or proxies must be executed under the hand of the appointor or of his attorney duly authorised in writing.
Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand
of an officer or attorney duly authorised. Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the letter
or power of attorney or a duly certified copy thereof must (unless previously registered with the Company) be lodged with the instrument of
proxy, failing which, the instrument may be treated as invalid.
5.
A corporation which is a Shareholder may authorise, by resolution of its directors or other governing body, such person as it thinks fit to act
as its representative at the Annual General Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.
6.
The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or
where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing
a proxy or proxies. In addition, in the case of Shareholders whose Shares are entered in the Depository Register, the Company may reject
any instrument appointing a proxy or proxies lodged if such Shareholders are not shown to have Shares entered against their name in the
Depository Register 48 hours before the time appointed for the holding of the Annual General Meeting, as certified by The Central Depository
(Pte) Limited to the Company.
7.
Completion and return of this instrument appointing a proxy shall 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 an event, the
Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting.
HYFLUX LTD
ANNUAL REPORT 2012
NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Hyflux Ltd (Company) will
be held at 80 Bendemeer Road, Hyflux Innovation Centre, Singapore 339949 on 25 April
2013 at 2.00 p.m. for the following purposes:
AS ORDINARY BUSINESS
Resolution 1
To receive and adopt the Directors Report and the Audited Accounts for the year ended
31 December 2012 together with the Auditors Report thereon.
Resolution 2
To declare a final dividend of 2.5 Singapore cents per ordinary share (one-tier tax exempt) for
the year ended 31 December 2012 (previous year: 2.1 Singapore cents per ordinary share).
Resolution 3
To re-elect Mr. Lee Joo Hai who retires in accordance with Article 89 of the Companys
Articles of Association and who, being eligible, offers himself for re-election.
Resolution 4
To re-elect Mr. Gay Chee Cheong who retires in accordance with Article 89 of the Companys
Articles of Association and who, being eligible, offers himself for re-election.
Resolution 5
To approve the payment of Directors fees of S$550,000 for the year ended 31 December
2012 (previous year: S$540,795).
Resolution 6
To re-appoint Messrs KPMG LLP as external auditors and to authorise the Directors to fix
their remuneration.
AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with
or without any modifications:
Resolution 7
That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing
Manual of the Singapore Exchange Securities Trading Limited, (the Listing Manual) the
Directors be authorised and empowered to:
(a)
(1) issue ordinary shares in the Company whether by way of rights, bonus or

otherwise; and/or
1
HYFLUX LTD
ANNUAL REPORT 2012
NOTICE OF ANNUAL GENERAL MEETING (CONTD)

(2)

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) options, warrants, debentures
or other instruments convertible into ordinary 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)

issue ordinary shares in pursuance of any Instruments made or granted by the

Directors while this Resolution was in force (notwithstanding the authority conferred
by this Resolution may have ceased to be in force), provided that:

(1)

the aggregate number of ordinary shares (including ordinary shares to be

issued in pursuance of the Instruments, made or granted pursuant to this
Resolution) and Instruments to be issued pursuant to this Resolution shall not
exceed fifty per centum (50%) of the issued ordinary shares in the capital of
the Company (as calculated in accordance with sub-paragraph (2) below), of
which the aggregate number of ordinary shares and Instruments to be issued
other than on a pro rata basis to existing shareholders of the Company shall not
exceed twenty per centum (20%) of the issued ordinary shares in the capital of
the Company (as calculated in accordance with sub-paragraph (2) below);

(2)

(subject to such calculation as may be prescribed by the Singapore Exchange

Securities Trading Limited) for the purpose of determining the aggregate
number of ordinary shares and Instruments that may be issued under subparagraph (1) above, the percentage of issued ordinary shares and Instruments
shall be based on the number of issued ordinary shares in the capital of the
Company (excluding treasury shares) at the time of the passing of this Resolution,
after adjusting for:

(i)

new ordinary shares arising from the conversion or exercise of the

Instruments or any convertible securities;

(ii)

new ordinary shares arising from the exercising of share options or vesting
of share awards outstanding and subsisting at the time of the passing of
this Resolution; and

(iii) any subsequent bonus issue consolidation or subdivision of ordinary
shares.

(3)

in exercising the authority conferred by this Resolution, the Company shall

comply with the provisions of the Listing Manual for the time being in force
(unless such compliance has been waived by the Singapore Exchange Securities
Trading Limited) and the Articles of Association of the Company; and

(4) unless revoked or varied by the Company in a general meeting, such authority

shall continue in force (i) until the conclusion of the next Annual General Meeting

of the Company or the date by which the next Annual General Meeting of the
2
HYFLUX LTD
ANNUAL REPORT 2012

Company is required by law to be held, whichever is earlier or (ii) in the case of ordinary shares
to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution,
until the issuance of such ordinary shares in accordance with the terms of the Instruments.
Resolution 8
That:
(a)
authority be and is hereby given to the Directors to:

(1) allot and issue preference shares referred to in Articles 8C and 8E of the Articles

of Association of the Company in the capital of the Company whether by way of

rights, bonus or otherwise; and/or

(2)

make or grant offers, agreements or options that might or would require

preference shares referred to in sub-paragraph (1) above to be issued,
not being ordinary shares to which the authority referred to in Resolution 7
above relates,
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
(notwithstanding the authority conferred by this Resolution may have ceased to be
in force) issue preference shares referred to in sub-paragraph (1) above in pursuance
of any offers, agreements or options made or granted by the Directors while this
Resolution was in force; and
(b)

(unless revoked or varied by the Company in a 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 earlier.
Resolution 9
That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors be authorised
and empowered to:
(a)

offer, grant, allot and issue options in accordance with the provisions of the Hyflux
Employees Share Option Scheme 2011 (2011 Scheme); and
(b)

continue to allot and issue from time to time such number of ordinary shares in the
capital of the Company when such options are validly exercised pursuant to the terms
and conditions of the Hyflux Employees Share Option Scheme 2001 (2001 Scheme),
and (notwithstanding the authority conferred by this Resolution may have ceased to
be in force) to issue from time to time such number of ordinary shares in the capital
of the Company as may be required to be issued pursuant to the exercise of options
granted by the Company under the 2011 Scheme and 2001 Scheme, provided always
that the aggregate number of additional ordinary shares to be allotted and issued
respectively shall not exceed ten per centum (10%) of the issued ordinary shares in
3
HYFLUX LTD
ANNUAL REPORT 2012

the capital of the Company from time to time under the 2011 Scheme and shall not
exceed fifteen per centum (15%) of the issued ordinary shares in the capital of the
Company from time to time under the 2001 Scheme and that such authority 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 the date by which the next Annual
General Meeting of the Company is required by law to be held, whichever is earlier.
Resolution 10
That the Directors of the Company be and are hereby authorised to exercise all the powers
of the Company to make purchases of or otherwise acquire issued and fully-paid ordinary
shares in the capital of the Company from time to time (whether by way of market purchases
or off-market purchases on an equal access scheme) of up to ten per centum (10%) of the
issued ordinary shares in the capital of the Company (ascertained as at the date of the passing
of this Resolution, unless the Company has effected a reduction of the share capital of the
Company in accordance with the applicable provisions of the Companies Act, Chapter 50
of Singapore (Companies Act), at any time during the Relevant Period (as defined below),
in which event the issued ordinary share capital of the Company shall be taken to be the
amount of the issued ordinary share capital of the Company as altered, but excluding any
shares held by the Company as treasury shares from time to time) at the price of up to but
not exceeding the Maximum Price (as defined in Appendix 2 to this Notice of Annual General
Meeting (Appendix 2)) and in accordance with the Guidelines on Share Purchase set out
in Appendix 2 (read with Appendix 1 to this Notice of Annual General Meeting) and
otherwise in accordance with all other provisions of the Companies Act and the Listing
Manual of the Singapore Exchange Securities Trading Limited as may from time to time be
applicable, and this mandate shall, unless revoked or varied by the Company in general
meeting, continue in force until the date on which the next Annual General Meeting of the
Company is held or is required by law to be held (the Relevant Period), or the date on which
the share purchases are carried out to the full extent mandated, whichever is earlier.
To transact any other ordinary business which may properly be transacted at an Annual
General Meeting.
By Order of the Board
Lim Poh Fong

Company Secretary
Singapore, 10 April 2013
HYFLUX LTD
ANNUAL REPORT 2012

Explanatory Notes:
(1)

A Member entitled to attend and vote at the Annual General Meeting (the Meeting)
is entitled to appoint a proxy to attend and vote in his/her stead. A proxy
need not be a Member of the Company. The instrument appointing a proxy must be
deposited at the Registered Office of the Company at 80 Bendemeer Road,
Hyflux Innovation Centre, Singapore 339949 not less than 48 hours before the time
appointed for holding the Meeting.
(2)

In relation to Resolution 3, Mr. Lee Joo Hai, will upon re-election as a Director of the
Company, remain as Chairman of the Audit Committee and a member of the
Remuneration Committee and Risk Management Committee. Mr. Lee is considered a
non-executive and independent director.
(3)

In relation to Resolution 4, Mr. Gay Chee Cheong, will upon re-election as a Director
of the Company, remain as Chairman of the Remuneration Committee, a member
of the Audit Committee and Nominating Committee. Mr. Gay is considered a nonexecutive and independent director.
(4)

Ordinary Resolution 7 has been proposed for voting annually at the Companys
Annual General Meeting since 2002. Pursuant to Section 161 of the Companies Act,
Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities
Trading Limited, and upon passing of this Ordinary Resolution 7, the Directors will
be empowered from the date of this Meeting until the date of the next Annual General
Meeting, or the date by which the next Annual General Meeting is required by law
to be held or such authority is varied or revoked by the Company in a general meeting,
whichever is the earliest, to issue ordinary shares, make or grant instruments
convertible into ordinary shares and to issue ordinary shares pursuant to such
instruments, up to a number not exceeding, in total, 50% of the issued ordinary shares
in the capital of the Company, of which up to 20% may be issued other than on a pro
rata basis to existing shareholders. In determining the aggregate number of ordinary
shares that may be issued, the percentage of issued ordinary shares in the capital
of the Company will be calculated based on the issued ordinary shares in the capital
of the Company at the time this Ordinary Resolution 7 is passed after adjusting for new
ordinary shares arising from the conversion or exercise of the instruments or
any convertible securities, the exercise of share options or the vesting of share awards
outstanding or subsisting at the time when this Ordinary Resolution 7 is passed and
any subsequent bonus issue, consolidation or subdivision of ordinary shares.
(5)

Ordinary Resolution 8 relates to the renewal of the preference share issue mandate,
which was originally approved by the shareholders at the Extraordinary General
Meeting held on 31 March 2011. Upon passing of this Ordinary Resolution 8, the
Directors will be empowered from the date of this Meeting until the date of the next
Annual General Meeting, or the date by which the next Annual General Meeting
is required by law to be held or such authority is varied or revoked by the Company in
a general meeting, whichever is the earliest, to issue new preference shares and/or
make or grant offers, agreements or options that might or would require such
preference shares to be issued, provided that the aggregate number of preference
5
HYFLUX LTD
ANNUAL REPORT 2012

shares does not exceed 20% of the total number of issued shares (excluding treasury
shares) in the capital of the Company at the time of passing of this Ordinary Resolution
8 and such issue be on such other terms and condition as the Directors may deem fit.
(6)

Ordinary Resolution 9 has been proposed for voting and passed annually since
2002. The 2001 Scheme has expired on 26 September 2011 and the 2011 Scheme
was approved by the shareholders at the Extraordinary General Meeting held on 27
April 2011. The Directors believe that an appropriate remuneration package is
required to recruit, retain and reward talent for performance. Pursuant to Section 161
of the Companies Act, Cap. 50 and upon passing of the Ordinary Resolution 9, the
Directors will be empowered, from the date of this Meeting until the next Annual
General Meeting, or the date by which the next Annual General Meeting is required
by law to be held or such authority is varied or revoked by the Company in a general
meeting, whichever is the earliest, to issue ordinary shares in the Company pursuant to
the exercise of options granted or to be granted under the 2011 Scheme and 2001
Scheme, provided always that the aggregate number of additional ordinary shares to
be allotted and issued respectively shall not exceed 10% of the issued ordinary shares
in the capital of the Company from time to time under the 2011 Scheme and shall not
exceed 15% of the issued ordinary shares in the capital of the Company from time to
time under the 2001 Scheme.
(7)

Ordinary Resolution 10 relates to the renewal of the share purchase mandate, which
was originally approved by the shareholders at the Extraordinary General Meeting
held on 25 April 2008 and last renewed at the Annual General Meeting held on 26
April 2012. Ordinary Resolution 10, if passed, will empower the Directors of the
Company from the date of this Meeting until the next Annual General Meeting, or
the date by which the next Annual General Meeting is required by law to be held,
whichever is earlier, to purchase ordinary shares of the Company by way of market
purchases or off-market purchases of up to 10% of the total number of issued ordinary
shares in the capital of the Company at the Maximum Price as defined in Appendix 2.
Please refer to Appendix 1 and Appendix 2 of this Notice of Annual General Meeting
for further details.
HYFLUX LTD
ANNUAL REPORT 2012
NOTICE OF BOOKS CLOSURE

NOTICE OF BOOKS CLOSURE
NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of Hyflux
Ltd (the Company) will be closed on 6 May 2013 for the preparation of dividend warrants.
Duly completed registrable transfers of ordinary shares received by the Companys Share
Registrar, Boardroom Corporate & Advisory Services Pte. Ltd., 50 Raffles Place, #32-01,
Singapore Land Tower, Singapore 048623 up to 5.00 p.m. on 3 May 2013 will be registered
to determine ordinary shareholders entitlements to the proposed dividend. Members
whose Securities Accounts with The Central Depository (Pte) Limited are credited with the
Companys ordinary shares at 5.00 p.m. on 3 May 2013 will be entitled to the proposed
dividend.
Payment of the dividend, if approved by the members at the Annual General Meeting to
be held on 25 April 2013, will be made on 17 May 2013.
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 1
SUMMARY SHEET FOR RENEWAL OF SHARES PURCHASE MANDATE
The Singapore Exchange Securities Trading Limited (the SGX-ST) assumes no responsibility
for the correctness of any of the statements made, reports contained or opinions expressed
in this Appendix. If you are in doubt as to the action that you should take, you should consult
your stockbroker or other professional adviser immediately.
(A)
SHARES PURCHASED IN THE PREVIOUS TWELVE MONTHS

Pursuant to the Shares Purchase Mandate obtained at the Annual General Meeting
on 26 April 2012, as at 20 March 2013 (the Latest Practicable Date), Hyflux Ltd (the
Company) had purchased by way of market acquisition an aggregate of 22,949,000
ordinary shares in the capital of the Company (the Shares), which are held in treasury
(Treasury Shares). The total consideration paid for the purchases was S$30,908,435
(inclusive of brokerage and clearing fees of S$62,773). The highest price paid for
the purchases was S$1.50 per Share and the lowest price paid was S$1.21 per Share.
(B)
RENEWAL OF THE SHARES PURCHASE MANDATE

The Ordinary Resolution No. 10, if passed at the Annual General Meeting, will renew
the Shares Purchase Mandate approved by the shareholders of the Company from
the date of the Annual General Meeting until the date that the next annual general
meeting of the Company is held or is required by law to be held, whichever is the
earlier.
(C)
RATIONALE FOR THE SHARES PURCHASE MANDATE

Short-term speculation may at times cause the market price of the Companys
Shares to be depressed below the true value of the Company and the Group. The
proposed Shares Purchase Mandate will provide the Directors with the means to
restore investors confidence and to protect existing shareholders investments in the
Company in a depressed share-price situation through judicious Shares purchases
to enhance the earnings per Share and/or the net asset value per Share. The Shares
purchases will enhance the net asset value per Share if the Shares purchases are
made at a price below the net asset value per Share.
The proposed Shares Purchase Mandate will also provide the Company with an
expedient and cost-effective mechanism to facilitate the return of surplus cash
reserves to the shareholders.
The Directors will only make a Shares purchase as and when the circumstances
permit and only if the Directors are of the view that such purchases are in the best
interests of the Company and the shareholders. The Directors will decide whether
to purchase Shares only after taking into account, among other things, the market
conditions at such time and the Companys financial condition. Shares purchases will
only be made if the Directors believe that such purchases are likely to benefit the
Company and increase economic value for shareholders.
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 1 (CONTD)
The Directors will ensure that the Shares purchases will not have any effect on the
listing of the Companys securities including the Shares listed on the SGX-ST. Rule
723 of the Listing Manual of the SGX-ST requires at least ten per cent (10%) of any
class of a companys listed securities to be held by the public at all times. The
Directors shall safeguard the interests of public shareholders before undertaking
any Shares purchases. Before exercising the Shares Purchase Mandate, the Directors
shall at all times take due cognisance of (a) the then shareholding spread of the
Company in respect of the number of Shares held by substantial shareholders and by
non-substantial shareholders and (b) the volume of trading on the SGX-ST in respect
of the Shares immediately before the exercise of any Shares purchase.
As at the Latest Practicable Date, 378,269,282 Shares (45.83%) of a total of
825,414,739 Shares issued by the Company are held by 16,937 public shareholders.
The Company is of the view that there is a sufficient number of Shares in issue held
by public shareholders which would permit the Company to undertake Shares
purchases of up to ten per cent (10%) of its issued ordinary share capital without
affecting the listing status of the Shares on the SGX-ST. The Company will ensure
that the Shares purchases will not cause market illiquidity or affect orderly trade.
(D)
FINANCIAL IMPACT OF THE PROPOSED SHARES PURCHASES
1.
The purchased Shares shall be cancelled immediately on purchase or acquisition

unless held in treasury in accordance with Section 76H of the Companies Act (Cap.
50) (the Act). Section 76H of the Act allows purchased Shares to be:
(i)
held by the Company; or
(ii) dealt with, at any time, in accordance with Section 76K of the Act, as Treasury
Shares.
Section 76K of the Act allows the Company to:
(i)
sell the Shares (or any of them) for cash;
(ii) transfer the Shares (or any of them) for the purposes of or pursuant to an

employees share scheme;
(iii) transfer the Shares (or any of them) as consideration for the acquisition of

shares in or assets of another company or assets of a person; or
(iv) cancel the Shares (or any of them).
The aggregate number of Shares held as Treasury Shares shall not at any time
exceed ten per cent (10%) of the total number of Shares at that time. Any Shares in
excess of this limit shall be disposed of or cancelled in accordance with Section 76K
of the Act within six (6) months.
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 1 (CONTD)

Any Shares purchase will:

(i)

reduce the amount of the Companys share capital where the Shares were
purchased or acquired out of the capital of the Company;

(ii) reduce the amount of the Companys profits where the Shares were purchased

or acquired out of the profits of the Company; or

(iii) reduce the amount of the Companys share capital and profits proportionately

where the Shares were purchased or acquired out of both the capital and the

profits of the Company;

by the total amount of the purchase price paid by the Company for the Shares cancelled.
The Company cannot exercise any right in respect of Treasury Shares. In particular,
the Company cannot exercise any right to attend or vote at meetings and for the
purposes of the Act, the Company shall be treated as having no right to vote and
the Treasury Shares will be treated as having no voting rights.
2.

The financial effects on the Company and the Group arising from the proposed
purchases of the Companys Shares which may be made pursuant to the proposed
Shares Purchase Mandate will depend on, inter alia, the aggregate number of
Shares purchased and the consideration paid at the relevant time.
3.

Based on the existing issued and paid-up share capital of the Company as at the
Latest Practicable Date, the proposed purchases by the Company of up to a maximum
of ten per cent (10%) of its issued share capital (excluding Treasury Shares) under
the Shares Purchase Mandate will result in the purchase of 82,541,474 Shares.
4.

An illustration of the impact of Shares purchases by the Company pursuant to the

Shares Purchase Mandate on the Groups and the Companys financial position is set
out below based on the following assumptions:
(a) audited accounts of the Group and the Company as at 31 December 2012;
(b)
in full exercise of the Shares Purchase Mandate, 82,541,474 Shares were purchased;

(c) the maximum price for the market purchases is S$1.4889 per Share, which is

five per cent (5%) above the average closing prices of the Shares over the last

five market days preceding the Latest Practicable Date on which the transactions

in Shares were recorded on the SGX-ST; and

(d) the maximum amount of funds required for the Shares purchases in aggregate

is S$122,896,000.
10
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 1 (CONTD)

Market Purchases and Off-Market Purchases and held as Treasury Shares or
cancelled
Group
before
Shares
purchase
(S$000)
Group
after
Shares
purchase
(S$000)
Company
before
Shares
purchase
(S$000)
Company
after
Shares
purchase
(S$000)
As at 31 December 2012
Shareholders funds
860,593
737,697
666,034
543,138
Net asset value
877,029
754,133
666,034
543,138
Current assets
914,916
792,020
666,844
543,948
Current liabilities
391,792
391,792
47,681
47,681
541,232
418,336
176,216
53,320
Number of shares (000)
825,223
742,682
825,223
742,682
Net asset value per share

(cents)
55.81
45.47
32.24
19.27
4.43
4.91
9.23
10.24
Gearing (times)
0.67
0.95
1.11
1.59
Current ratio
2.34
2.02
13.99
11.41
Financial Ratios
5.

Shareholders should note that the financial effects set out above are based on the
audited financial accounts of the Group and the Company for the financial year
ended 31 December 2012 and are for illustration only. The results of the Group and
the Company for the financial year ended 31 December 2012 may not be
representative of future performance.
6.

The Company intends to use its internal sources of funds to finance its purchases
of the Shares. The Company does not intend to obtain or incur any borrowings to
finance its purchases of the Shares. The Directors do not propose to exercise the
Shares Purchase Mandate in a manner and to such extent that the working capital
requirements of the Group would be materially affected.
7.

The Company will take into account both financial and non-financial factors, among
other things, the market conditions at such time, the Companys financial condition,
the performance of the Shares and whether such Shares purchases would represent
the most efficient and cost-effective approach to enhance the Share value. Shares
purchases will only be made if the Board believes that such purchases are likely to
benefit the Company and increase economic value for shareholders.
11
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 1 (CONTD)
(E)

CONSEQUENCES OF SHARES PURCHASES UNDER THE SINGAPORE CODE ON

TAKE-OVERS AND MERGERS
1.

In accordance with The Singapore Code on Take-overs and Mergers (the Take-over
Code), a person will be required to make a general offer for a public company if:
(a) he acquires 30 per cent (30%) or more of the voting rights of the company; or
(b) he already holds between 30 per cent (30%) and 50 per cent (50%) of the voting

rights of the company, and he increases his voting rights in the company by

more than one per cent (1%) in any six-month period.
2.

As at the Latest Practicable Date and before the proposed Shares Purchase
Mandate, the substantial shareholders and Directors interests are as follows:
Ordinary Shareholdings
Direct Interest
Directors
Olivia Lum Ooi Lin
Number
of Shares
Deemed Interest
267,351,211 32.39
Number
of Shares
-
Total Interest
Number
of Shares
- 267,351,211 32.39
Teo Kiang Kok
375,000
0.04
375,000
0.04
Lee Joo Hai
1,000,000
0.12
1,000,000
0.12
926,718
0.11
180,000
0.02
1,106,718
0.13
Simon Tay
Gary Kee Eng Kwee
Gay Chee Cheong

NOTES:
(1) Teo Kiang Kok is deemed interested in the Shares held by Citibank Nominees

Singapore Pte Ltd.
(2) Christopher Murugasu is deemed interested in the Shares held by his spouse,

Bernadette Oei Lian Hua.
12
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 1 (CONTD)
Class A Preference Shareholdings1
Direct Interest
Deemed Interest
Total Interest
Number
of Shares
Number
of Shares
Number
of Shares
Olivia Lum Ooi Lin
8,020
0.2
8,020
0.2
Teo Kiang Kok
3,000 0.075
3,000 0.075
Directors
Lee Joo Hai

Gay Chee Cheong
12,000
0.3
12,000
0.3
1,000 0.025
-
20,000
0.5
20,000
1,000 0.025
0.5
Simon Tay
Gary Kee Eng Kwee
NOTES:
(1) Rajsekar Kuppuswami Mitta is deemed interested in the preference shares

held by Bank of Singapore Nominees Pte Ltd.
In the event the Company undertakes Shares purchases of up to ten per cent
(10%) of the issued share capital of the Company as permitted by the Shares
Purchase Mandate, the shareholdings and voting rights of Ms Olivia Lum Ooi Lin
may be increased from 32.39% to 35.99%. Ms Olivia Lum Ooi Lins shareholdings
and voting rights may thus be increased by more than one per cent (1%) within
a six-month period. Accordingly, Ms Olivia Lum Ooi Lin may be required to make
a general offer to the other shareholders under Rule 14.1(b) of the Take-over
Code.
3.

Pursuant to paragraph 3(a) of Appendix 2 to the Take-over Code, Ms Olivia Lum Ooi Lin
and parties acting in concert with her will be exempted from the requirement to
make a general offer under Rule 14.1(b) of the Take-over Code after any Shares
purchase, subject to the following conditions:

(a) this Appendix contains advice to the effect that by voting for the resolution

to approve the Shares Purchase Mandate, shareholders are waiving their right

to a general offer at the required price from Ms Olivia Lum Ooi Lin and parties
acting in concert with her, if any; and the names of Ms Olivia Lum Ooi Lin

1
Pursuant to a preference share issue mandate obtained at an extraordinary general meeting of

the Company held on 31 March 2011, the Company had also issued 4,000,000 6% cumulative
non-convertible non-voting perpetual Class A Preference Shares of up to S$400,000,000 in
aggregate liquidation preference.
13
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 1 (CONTD)

and her concert parties, if any, and the voting rights of such persons at the time

of the resolution and after the proposed Shares Purchases are disclosed in this
Appendix;
(b) the resolution to approve the Shares Purchase Mandate is approved by a majority

of those shareholders present and voting at the meeting on a poll who could not

become obliged to make an offer for the Company as a result of the Shares
Purchase;
(c) Ms Olivia Lum Ooi Lin and her concert parties, if any, do not vote for and/or

recommend shareholders to vote in favour of the resolution to approve the

Shares Purchase Mandate;
(d) within 7 days after the passing of the resolution to approve the Shares Purchase

Mandate, Ms Olivia Lum Ooi Lin to submit to the Council a duly signed form as

prescribed by the Council; and
(e)

Ms Olivia Lum Ooi Lin and her concert parties, if any, have not acquired and
will not acquire any Shares between the date on which they know that the
announcement of the approval of the Shares Purchase Mandate is imminent and
the earlier of:
(i)

(ii)

the date on which the Shares Purchase Mandate expires; and

the date the Company announces that it has bought back such number of
Shares as authorised under the Shares Purchase Mandate or the date the
Company decides to cease buying back its Shares, as the case may be,
if such acquisitions, taken together with shares bought by the Company under
the Shares Purchase Mandate, would cause their aggregate voting rights in the
Company to increase by more than 1% in the any sixmonth period.
The Directors hereby confirm that the substantial shareholders are not acting
in concert with any other person to assist any shareholder (or his concert party or
parties) to obtain or consolidate control of the Company and that the proposed
Shares Purchases are not for any such purpose.
It should be noted that approving the Shares Purchase Mandate will constitute a
waiver by the shareholders in respect of their rights to receive a general offer by
the substantial shareholders and parties acting in concert with the substantial
shareholders at the required price, which shall be determined in accordance
with the relevant provisions of the Take-over Code.
For the purpose of the Shares Purchase Mandate, parties acting in concert comprise
individuals or companies who, pursuant to an agreement or understanding (whether
formal or informal), cooperate, through the acquisition by any of them of shares in the
Company, to obtain or consolidate effective control of the Company.
14
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 1 (CONTD)
(F)
MISCELLANEOUS
1.

Any Shares purchases undertaken by the Company shall be at a price of up to but

not exceeding the Maximum Price. The Maximum Price is a sum which shall not
exceed the sum constituting five per cent (5%) above the average closing price of the
Shares over the period of five (5) trading days in which transactions in the Shares on
the SGX-ST were recorded, in the case of a Market Purchase, before the day on which
such purchase is made, and, in the case of an Off-Market Purchase, immediately
preceding the date of offer by the Company, as the case may be, and adjusted for
any corporate action that occurs after the relevant five (5) day period.
2.

In making Share purchases, the Company will comply with the requirements of the
SGX-ST Listing Manual, in particular, Rule 886 with respect to notification to the SGX-
ST of any Shares purchases. Rule 886 is reproduced below:
(1) An issuer must notify the Exchange of any share buy-back as follows:

(a)

In the case of a market acquisition, by 9.00 am on the market day following

the day on which it purchased shares,

(b) In the case of an off market acquisition under an equal access scheme, by
9.00 am on the second market day after the close of acceptances of the offer.
(2) Notification must be in the form of Appendix 8.3.1 (or 8.3.2 for an issuer with a

dual listing on another stock exchange).
3.

Shares purchases will be made in accordance with the Guidelines on Shares Purchases
as set out in Appendix 1 of the Companys Circular to shareholders dated 4 April 2008,
a copy of which is annexed hereto as Appendix 2. All information required under the
Act relating to the Shares Purchase Mandate is contained in the said Guidelines. With
reference to:
(a) Paragraph 1(b) of Appendix 2, the Shares Purchase Mandate will expire on the

earliest of any of the circumstances set out in sub-paragraphs (i) to (iii) unless

prior thereto, Shares purchases are carried out to the full extent mandated;
(b) Paragraph 6(a) of Appendix 2, the offer document to be issued to all Shareholders

in the case of an Off-Market Purchase shall also contain information on whether

the Shares purchased by the Company will be cancelled or kept as treasury shares;
and
(c)

Paragraph 10(b) of Appendix 2, for the avoidance of doubt, as the Company is

required to announce quarterly financial statements, the Company may not
effect any repurchases of Shares on the SGX-ST during the period commencing
two weeks before the announcement of the Companys financial statements for
each of the first three quarters of its financial year, or one month before the
full financial year, as the case may be, and ending on the date of announcement
of the relevant results.
15
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 1 (CONTD)
4.

The SGX-ST Listing Manual does not expressly prohibit any purchase of shares by
a listed company during any particular time or times. However, as a listed company
would be considered an insider in relation to any proposed purchase or acquisition
of its shares, the Company will undertake not to purchase or acquire Shares pursuant
to the proposed Share Purchase Mandate at any time after a price sensitive development
has occurred or has been the subject of a decision until the price sensitive information
has been publicly announced. In particular, the Company will not purchase or acquire
any Shares during the period commencing two weeks before the announcement
of the Companys financial statements for each of the first three quarters of its
financial year, or one month before the full financial year, as the case may be, and
ending on the date of announcement of the relevant results.
(G)
DIRECTORS RESPONSIBILITY STATEMENT
The Directors of the Company collectively and individually accept full responsibility
for the accuracy of the information given in this Appendix and confirm after making
all reasonable enquiries that, to the best of their knowledge and belief, this Appendix
constitutes full and true disclosure of all material facts about the Shares Purchase
Mandate, the Company and its subsidiaries, and the Directors of the Company are
not aware of any facts the omission of which would make any statement in this
Appendix misleading. Where information in this Appendix has been extracted from
published or otherwise publicly available sources or obtained from a named source,
the sole responsibility of the Directors of the Company has been to ensure that such
information has been accurately and correctly extracted from those sources and/or
reproduced in this Appendix in its proper form and context.
(H)
SHAREHOLDERS WHO WILL ABSTAIN FROM VOTING
Ms Olivia Lum Ooi Lin and her concert parties will abstain from voting at the Annual
General Meeting in respect of Ordinary Resolution 10 relating to the Shares Purchase
Mandate, and will not act as proxies in respect of Ordinary Resolution 10 unless voting
instructions have been given by the appointing Shareholder(s).
(I)
DIRECTORS RECOMMENDATION
The Directors of the Company, other than Ms Olivia Lum Ooi Lin who has abstained
from making any recommendation, are of the opinion that the renewal of the proposed
Shares Purchase Mandate is in the best interests of the Company. Accordingly,
the Directors of the Company recommend that shareholders vote in favour of
Ordinary Resolution 10.
(J) TAXATION

16
Shareholders who are in doubt as to their respective tax positions or any tax
implications, or who may be subject to tax in a jurisdiction outside Singapore,
should consult their own professional tax advisers.
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 1 (CONTD)
(K)
DOCUMENTS FOR INSPECTION

Copies of the following documents may be inspected at the registered office of

the Company at 80 Bendemeer Road, Hyflux Innovation Centre, Singapore 339949

during normal business hours up to and including the date of the Annual General
Meeting:
(a) the Memorandum and Articles of Association of the Company; and
(b) the audited financial statements of the Company for the financial year ended 31

December 2012.
17
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 2
GUIDELINES ON SHARES PURCHASES
1.
SHAREHOLDERS APPROVAL

(a) Purchases of Shares by the Company must be approved in advance by the

Shareholders at a general meeting of the Company, by way of a general
mandate.

(b)

A general mandate authorising the purchase of Shares by the Company

representing up to ten per cent (10%) of the issued ordinary shares in the capital
of the Company (excluding any Shares held as Treasury Shares) will expire on the
earlier of:
(i)
the conclusion of the next annual general meeting of the Company;

(ii)

the expiration of the period within which the next annual general meeting
of the Company is required by law to be held; or

(iii)

the time when such mandate is revoked or varied by an ordinary resolution

of the Shareholders of the Company in general meeting.

(c) The authority conferred on the Directors by the Shares Purchase Mandate to

purchase Shares shall be renewed at the next annual general meeting of the
Company.

(d)

When seeking Shareholders approval for the renewal of the Shares Purchase
Mandate, the Company shall disclose details pertaining to the purchases of
Shares made during the previous 12 months, including the total number of
Shares purchased, the purchase price per Share or the highest and lowest price
for such purchases of Shares, where relevant, and the total consideration paid
for such purchases.
2.
MODE OF PURCHASE
Shares Purchases can be effected by the Company in either one of the following two
ways or both:

(a) by way of market purchases of Shares on the Official List of SGX-ST, which

means a purchase transacted through the ready market; or

(b) by way of off-market acquisitions on an equal access scheme in accordance with

Section 76C of the Act.
3.
FUNDING OF SHARES PURCHASES

(a)

18
In purchasing the Shares, the Company may only apply funds legally permitted
for such purchase in accordance with its Articles of Association, and the relevant
laws and regulations enacted or prescribed by the relevant competent
authorities in Singapore.
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 2 (CONTD)
(b) Any purchase by the Company may be made out of capital or profits that are

available for distribution as dividends, so long as the Company is solvent (as

defined by Section 76F(4) of the Act) .
(c) The Company may not purchase its Shares on the Official List of SGX-ST for

a consideration other than cash or for settlement otherwise than in accordance

with the trading rules of SGX-ST.
4.
TRADING RESTRICTIONS
The number of Shares which can be purchased pursuant to the Shares Purchase
Mandate is such number of Shares which represents up to a maximum of ten per cent
(10%) of the issued ordinary shares in the capital of the Company (excluding Treasury
Shares) as at date of the last annual general meeting of the Company.
5.
PRICE RESTRICTIONS
Any Shares Purchase undertaken by the Company shall be at the price of up to but
not exceeding the Maximum Price.
Maximum Price means the maximum price at which the Shares can be purchased
pursuant to the Shares Purchase Mandate, which shall not exceed the sum constituting
five per cent (5%) above the average closing price of the Shares over the period of
five (5) trading days in which transactions in the Shares on SGX-ST were recorded, in
the case of a Market Purchase, before the day on which such purchase is made, and,
in the case of an Off-Market Purchase, immediately preceding the date of offer by the
Company, as the case may be, and adjusted for any corporate action that occurs after
the relevant five (5) day period.
6.
OFF-MARKET PURCHASES
(a) For purchases of Shares made by way of an Off-Market Purchase, the Company

shall issue an offer document to all Shareholders. The offer document shall

contain, inter alia, the following information:

(i)
the terms and conditions of the offer;
(ii)
the period and procedures for acceptances;
(iii)
the reasons for the proposed Shares Purchase;

(iv) the consequences, if any, of Shares purchased by the Company that will

arise under the Take-overs and Mergers or any other applicable take-over
rules;

(v)

whether the purchase of Shares, if made, would have any effect on the
listing of the Companys securities on the Official List of SGX-ST; and
19
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 2 (CONTD)
(vi)

details of any purchase of Shares made by the Company in the previous 12

months whether through Market Purchases or Off-Market Purchases, including
the total number of Shares purchased, the purchase price per Share or the
highest and lowest prices paid for such purchases of Shares, where relevant, and
the total consideration paid for such purchases.
(b)

All Offeree Shareholders shall be given a reasonable opportunity to accept any offer
made by the Company to purchase their Shares under the Shares Purchase Mandate.
(c)

The Company may offer to purchase Shares from time to time under the Shares
Purchase Mandate subject to the requirement that the terms of any offer to purchase
Shares by the Company shall be pari passu in respect of all Offeree Shareholders save
under the following circumstances:
(i)

where there are differences in consideration attributable to the fact that an offer
relates to Shares with different dividend entitlements;
(ii) where there are differences in consideration attributable to the fact that an offer

relates to Shares with different amounts remaining unpaid; and
(iii)

7.
where there are differences in an offer introduced solely to ensure that every
Shareholder is left with a whole number of Shares in board lots of 1,000 Shares
after the Shares Purchases, in the event there are Offeree Shareholders holding
odd numbers of Shares.
STATUS OF PURCHASED SHARES

The purchased Shares shall be cancelled immediately on purchase or acquisition
unless held in treasury in accordance with Section 76H of the Act. Section 76H of the
Act allows purchased Shares to be:
(i)
held by the Company; or
(ii) dealt with, at any time, in accordance with Section 76K of the Act, as Treasury
Shares.
Section 76K of the Act allows the Company to:
(i)
sell the Shares (or any of them) for cash;
(ii) transfer the Shares (or any of them) for the purposes of or pursuant to an

employees share scheme;
(iii) transfer the Shares (or any of them) as consideration for the acquisition of shares

in or assets of another company or assets of a person; or
(iv) cancel the Shares (or any of them).
The aggregate number of Shares held as Treasury Shares shall not at any time exceed
20
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 2 (CONTD)
ten per cent (10%) of the total number of Shares at that time. Any Shares in excess
of this limit shall be disposed of or cancelled in accordance with Section 76K of the
Act within six (6) months.
Any Shares Purchase will:
(i)

reduce the amount of the issued shares in the capital of the Company where
the Shares were purchased or acquired out of the capital of the Company;
(ii) reduce the amount of the Companys profits where the Shares were purchased

or acquired out of the profits of the Company; or
(iii) reduce the amount of the Companys share capital and profits proportionately

where the Shares were purchased or acquired out of both the capital and the

profits of the Company;
by the total amount of the purchase price paid by the Company for the Shares cancelled.
The Company cannot exercise any right in respect of Treasury Shares. In particular,
the Company cannot exercise any right to attend or vote at meetings and for the
purposes of the Act, the Company shall be treated as having no right to vote and the
Treasury Shares will be treated as having no voting rights.
8.
NOTIFICATION TO ACCOUNTING AND CORPORATE REGULATORY AUTHORITY
(ACRA)
(a) Within thirty (30) days of the passing of a Shareholders resolution to approve

any purchase of Shares, the Company shall lodge a copy of such resolution with
ACRA.
(b) The Company shall notify ACRA within thirty (30) days of a purchase of Shares.

Such notification shall include details of the date of the purchase, the total

number and nominal value of Shares purchased by the Company, the issued

shares in the capital of the Company as at the date of the Shareholders resolution

approving the purchase, the Companys issued shares in the capital after the

purchase and the amount of consideration paid by the Company for the
purchase.
9.
NOTIFICATION TO THE SGX-ST

(a)

For purchases of Shares made by way of an Off-Market Purchase, the Company

shall notify the SGX-ST in respect of any acquisition or purchase of Shares in the
relevant form prescribed by the SGX-ST from time to time, not later than 9.00 a.m.
on the second trading day after the close of acceptances of an offer, or within
such time period that may be prescribed by the SGX-ST from time to time.
21
HYFLUX LTD
ANNUAL REPORT 2012
APPENDIX 2 (CONTD)
(b) For purchases of Shares made by way of a Market Purchase, the Company shall

notify the SGX-ST in respect of any acquisition or purchase of Shares in the

relevant form prescribed by the SGX-ST from time to time, not later than 9.00 a.m.

on the trading day following the date of market acquisition by the Company,

or within such time period that may be prescribed by the SGX-ST from time to
time.
10.
22
SUSPENSION OF PURCHASE
(a)

The Company may not undertake any Shares Purchase prior to the announcement
of any price-sensitive information by the Company, until such time as the price
sensitive information has been publicly announced or disseminated in accordance
with the requirements of the Listing Manual.
(b)

The Company may not effect any repurchases of Shares on the SGX-ST during
the period commencing two weeks before the announcement of the Companys
financial statements for each of the first three quarters of its financial year, or one
month before half year or financial year, as the case may be, and ending on the
date of announcement of the relevant results.
HYFLUX LTD
ANNUAL REPORT 2012
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HYFLUX LTD
ANNUAL REPORT 2012
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TABLE OF CONTENTS

Vision & Mission

Group Financial Highlights

Message from Executive Chairman & Group CEO

International Advisory Panel

Corporate Social Responsibility

DELIVERING INNOVATIVE SOLUTIONS

All financial information presented in Singapore dollars, unless otherwise stated.

KEY FINANCIAL DATA

Profit before tax

Profit after tax

Profit attributable to shareholders

Net asset value per share (cents) (1)(2)

Dividend per share (cents) (2)

Return on revenue (%)

Return on equity (%)

Earnings per share (cents)

Group Revenue by Country & Region

DELIVERING INNOVATIVE SOLUTIONS

Profit attributable to shareholders

net asset value per share (1) (2)

dividend per share (2)

earnings per share

0.70 cents per ordinary share that was paid out

DELIVERING INNOVATIVE SOLUTIONS

(SWRO) desalination plants by capacity. The

In China, we will continue to invest in the

DELIVERING INNOVATIVE SOLUTIONS

We want to continue to make a difference

Volunteering and making a

We welcome Mrs Yu-Foo Yee Shoon and Ms

Teo Kiang Kok

Lee Joo Hai

Ms Lum started corporate life as a

Mr Teo has been a Non-Executive

Mr Lee has been a Non-Executive

Managing the Group for more than 20

Mr Teo was admitted to the Singapore

Mr Lee is a member of both the

DELIVERING INNOVATIVE SOLUTIONS

Gay Chee Cheong

Rajsekar Kuppuswami Mitta

Mr Gay has been a Non-Executive

Mr Murugasu has been a director of

Mr Mitta has been a Non-Executive

He sits on the Board of Governors of

Previously Senior Vice President for

Mr Mitta is currently the Chairman of

DELIVERING INNOVATIVE SOLUTIONS

Yu-Foo Yee Shoon

Mrs Yu-Foo Yee Shoon retired from

Ms Liu Jingsheng joined China

Mrs Yu-Foo started her career with

At CICC, Ms Liu led and participated in

Cho Wee Peng

Oon Jin Teik

DELIVERING INNOVATIVE SOLUTIONS

World's Largest SWRO Desalination Plant

Singapore's First SWRO Desalination Plant

Singapore's First NEWater Plant

Magtaa Desalination Plant

SingSpring Desalination Plant

Bedok NEWater Plant