Annual Report 2011 - Hyflux Ltd

Annual Report 2011

TABLE OF CONTENTS
1
2
4
5
8
12
15
18
21
30
32
33
Vision & Mission
Group Financial Highlights
Significant Events
Geographical Presence
Message from Executive Chairman & Group CEO
Board of Directors
Key Management
Financial Review
Operating Review
Corporate Social Responsibility
Investor Relations
Financial Statements

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 2011
1

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
GROUP FINANCIAL HIGHLIGHTS
KEY FINANCIAL DATA
for year ended 31 December
(S$’000) 2007 2008 2009 2010 2011
Revenue 192,786 554,224 524,814 569,737 481,975
Profit before tax 38,693 70,375 82,972 100,473 62,043
Profit after tax 36,645 62,218 74,291 88,885 55,725
Profit attributable to shareholders 32,949 59,036 75,036 88,510 53,027
Shareholders’ equity 239,772 297,547 365,244 502,501 920,591
Total assets 549,500 846,555 1,072,563 1,359,702 2,032,465
Net assets 247,067 307,899 393,402 514,507 935,567
Net asset value per share (cents) (1)(2) 30.50 37.80 46.10 58.60 60.60
Earnings per share (cents) (2) 4.21 7.50 9.51 10.52 4.30
Dividend per share (cents) (2) 1.26 2.29 3.33 4.17 2.77
Return on revenue (%) 17.1 10.7 14.3 15.5 11.6
Return on equity (%) 13.7 19.8 20.5 17.6 5.8
(1) Net asset value excludes non-controlling interests and is adjusted for Class A Cumulative Perpetual Preference Shares of S$400 million for FY2011
(2) FY2007 to 2009 were restated to include the December 2010 issue of one bonus share for every two existing ordinary shares
GROUP REVENUE BY COUNTRY & REGION
(S$ million)
2
600
500
400
300
200
100
0
27.6
8.2
157.0
FY07
16.5
223.0
314.7
FY08
13.0
330.5
181.3
FY09
75.1
343.8
150.8
FY10
226.9
114.4
140.7
FY11
Singapore / Others
MENA
China

GROUP FINANCIAL HIGHLIGHTS
$53.0m 60.6 cents
PROFIT ATTRIBUTABLE TO SHAREHOLDERS
(S$ million)
100
90
80
70
60
50
40
30
20
10
0
32.9
59.0
75.0
88.5
53.0
NET ASSET VALUE PER SHARE
(Singapore cents)
0
FY07 FY08 FY09 FY10 FY11
FY07 FY08 FY09 FY10 FY11
4.30 cents 2.77 cents
EARNINGS PER SHARE (2)
(Singapore cents)
12
10
8
6
4
2
0
0.0
FY07 FY08 FY09 FY10 FY11
FY07 FY08 FY09 FY10 FY11
5.8%
RETURN ON EQUITY
(%)
25
20
15
10
5
0
4.21
13.7
FY07
7.50
19.8
FY08
9.51
20.5
FY09
10.52
17.6
FY10
4.30
5.8
FY11
70
60
50
40
30
20
10
30.5
37.8
46.1
DIVIDEND PER SHARE (2)
(Singapore cents)
(1) Net asset value excludes non-controlling interests and is adjusted for Class A Cumulative Perpetual Preference Shares of S$400 million for FY2011
(2) FY2007 to 2009 were restated to include the December 2010 issue of one bonus share for every two existing ordinary shares
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
1.26
2.29
3.33
58.6
4.17
(1) (2)
60.6
2.77
HYFLUX LTD
ANNUAL REPORT 2011
3

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
SIGNIFICANT EVENTS
JANUARY
Hyflux signed three concession
agreements with the People’s
Government of Chongqing City,
Hechuan District to develop two
20,000 m 3 /day wastewater treatment
plants and a 50,000 m 3 /day potable
water treatment plant at the Hechuan
Industrial Park in Chongqing City,
China.
FEBRUARY
Hyflux was awarded a concession by
the People’s Government of Zunyi City
to develop a wastewater treatment
plant to treat up to 150,000 m 3 /day of
domestic wastewater for Zunyi City in
Guizhou province, China.
MARCH
Hyflux was named the preferred bidder
for Singapore’s second seawater
desalination plant by PUB, Singapore’s
national water agency. Hyflux will
design, build, own and operate the
318,500 m 3 /day plant. This is Hyflux’s
largest project by contract value to date.
Hyflux and Mizuho Corporate
Bank signed a memorandum of
understanding to collaborate on global
water business development and
explore various financing structures for
water projects.
4
APRIL
Hyflux and PUB signed a 25-year
water purchase agreement for
Tuaspring Desalination Plant. Under the
agreement, Tuaspring Pte Ltd, a whollyowned
subsidiary of Hyflux, will deliver
desalinated water from 2013 to 2038.
Hyflux successfully closed an offer
for S$400 million of 6% Cumulative,
Non-Convertible, Non-Voting, Perpetual
Class A Preference Shares. This
was the first non-financial, corporate
perpetual preference share issued in
Singapore.
JUNE
Hyflux’s Executive Chairman &
Group CEO Olivia Lum clinched the
prestigious Ernst & Young World
Entrepreneur Award 2011, beating 48
other leading entrepreneurs around the
world. She was the first woman and
first Singaporean to be named World
Entrepreneur of the Year.
JULY
Hyflux held a ground-breaking
ceremony for Tuaspring Desalination
Plant in conjunction with the Singapore
International Water Week. The guest-ofhonour
was Singapore’s Minister for the
Environment and Water Resources, Dr
Vivian Balakrishnan.
OCTOBER
Hyflux launched the new NSF 61
certified Kristal tri-bore ultrafiltration
membrane, Kristal 600ET3, at Aquatech
Amsterdam.
The Securities Investors Association
of Singapore (SIAS) named Hyflux
the Runner-Up (Services/Utilities/
Agriculture category) for the Most
Transparent Company Award 2011.
Hyflux won the Water Technology
Company of the Year at the Frost &
Sullivan Asia Pacific Best Practices
Awards 2011.
DECEMBER
Hyflux injected Shandong Xiajin Water
Treatment Plant and Chongqing Hexin
District Wastewater Treatment Plant
into Galaxy NewSpring, the 50/50 joint
venture with Mitsui & Co that invests,
develops, constructs, operates and
maintains water plants in China, for an
aggregate consideration of US$41.2
million.

GEOGRAPHICAL PRESENCE
LANDMARK PROJECTS
World’s Largest SWRO Desalination Plant
Magtaa Desalination Plant
China’s Largest SWRO Desalination Plant
Tianjin Dagang Desalination Plant
Southeast Asia’s Largest SWRO Desalination Plant
Tuaspring Desalination Plant
Singapore’s First SWRO Desalination Plant
SingSpring Desalination Plant
Singapore’s First NEWater Plant
Bedok NEWater Plant
Singapore’s Largest Membrane Bioreactor Plant
Jurong Membrane Bioreactor
Note: SWRO - Seawater Reverse Osmosis
France
Algeria
India
Malaysia
China
Singapore
HYFLUX LTD
ANNUAL REPORT 2011
Our offices
Landmark plants
Membrane installations
5

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
6

INNOVATION AT HYFLUX
Innovation sits at the heart of Hyflux, a hallmark of
our Company’s entrepreneurial roots. Innovation
extends beyond our R&D activities and technology
commercialisation. We challenge ourselves to look
at every aspect of our work with a fresh perspective.
We innovate to create value for our Group and for
communities that we work in.
HYFLUX LTD
ANNUAL REPORT 2011
7

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
We continue to invest in the future of our Group to
develop new membrane products and capabilities
despite the current slowdown in the global
economy. We see this investment as strategic. We
will be ready when the market picks up, and we
envisage demand for our membrane solutions to
increase with the growing need for good clean
water across the world.
OLIVIA LUM
Executive Chairman & Group CEO
8

MESSAGE FROM EXECUTIVE CHAIRMAN & GROUP CEO
DEAR STAKEHOLDERS
FY2011 has been a mixed year for Hyflux.
We showed our mettle by securing Singapore’s
second seawater desalination project amidst
very tough competition. We also successfully
raised S$400 million through a 6% Cumulative,
Non-Convertible, Non-Voting Perpetual Class A
Preference Shares (CPS) issue, leading the way
as the first corporate in Singapore to launch such
an issue.
After years of record growth, we turned in lower
revenue and profit for FY2011. Our revenue for
the financial year ended 31 December 2011 was
S$482.0 million, while profit after tax and noncontrolling
interests came in at S$53.0 million.
This was because we experienced a marked shift
in revenue contributions from the Middle East and
North Africa (MENA) market where we were at
the tail-end of construction works on two mega
desalination projects in Algeria as well as the
impact of Arab Spring on new contracts. A lower
level of divestment activities in FY2011 compared
to FY2010 also affected revenue and profits.
While FY2011 was a period of transition for us,
progressing into FY2012, we expect to register
higher revenues from Asia as our projects in the
region gain momentum.
On top of the list is our on-going works on
Tuaspring Desalination Plant in Singapore.
With a designed capacity of 318,500 m 3 /day of
desalinated water, it will be Singapore’s largest
seawater desalination plant when completed in
2013. In China, our portfolio is experiencing strong
organic expansion – we are undertaking expansion
and enhancement works at six wastewater
treatment plants that will raise their capacities by
a total of 100,000 m 3 /day. The estimated project
HYFLUX LTD
ANNUAL REPORT 2011
value of these works is S$88.0 million. The plants
are part of the portfolio of Galaxy NewSpring, our
50/50 joint venture with Mitsui & Co.
The upheavals in the world economy will continue
to form the backdrop for the global business
environment in 2012. Amidst the darkening clouds,
Hyflux is anchored in safe harbour. First, we have
a solid order book of some S$1.9 billion at the
close of 2011 that we will be executing through the
next two years. Second, fully aware of the looming
challenges, we have built up a strong balance
sheet to buffer against the possibility of credit
tightening and the unpredictability of the financial
markets. Our cash position at the end of FY2011
stood at S$662.4 million and net gearing ratio was
0.18 times. I believe we are well-placed to capture
opportunities in the global water industry.
Just before this Annual Report went to print, we
announced that Hyflux together with its consortium
partners, Hitachi Ltd and Itochu Corporation, have
signed a co-developer agreement with Dahej SEZ
Ltd (DSL) to develop a 336,000 m 3 /day capacity
seawater reverse osmosis (SWRO) desalination
plant within the Dahej Special Economic Zone
in the state of Gujarat, India. The design-buildown-operate
project, which is estimated to cost
about US$600 million, is subject to the execution
of a water purchase agreement between DSL
and the consortium, and the project’s financial
close. Hyflux will collaborate with Hitachi on the
engineering, procurement and construction works
and operations and maintenance of the plant. This
will be the largest seawater desalination plant in
Asia.
DELIVERING INNOVATIVE SOLUTIONS
Innovation is very much part of the make-up of
Hyflux, a reflection of our entrepreneurial roots.
We are constantly reminded of the need to be
9

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
MESSAGE FROM EXECUTIVE CHAIRMAN & GROUP CEO
innovative in our vision and mission statements.
We challenge ourselves to look at processes and
projects with a fresh perspective, and we do not
shy away from taking the untried and untested
route. Take for instance our innovative offering
that clinched for us the project to design, build,
own and operate Singapore’s second SWRO
desalination plant in Tuas.
With energy constituting about half the operating
costs of a desalination plant, we made the
calculated move to incorporate an on-site power
plant to produce electricity for the desalination
plant for our bid. The shared facilities of the
desalination plant and power plant will create
synergies between the two operations and lead
to higher levels of efficiency. We are working
hard together with PUB, Singapore’s national
water agency, to help build up Singapore’s water
resources and to lower the cost of desalination
through technology and innovation.
The integration of a water project with a power
plant is a first for Singapore and for Hyflux. This
landmark project will be our springboard into the
growing Independent Water and Power Project
segment.
As highlighted earlier, we were able to raise S$400
million through our CPS issue that was launched
in April 2011. This issue was over-subscribed by
almost six times, and the enthusiastic response
to our CPS was heartening and spoke well of the
faith that investors have in our brand. We sincerely
thank our investors for their strong support.
We successfully commissioned the 200,000 m 3 /
day SWRO desalination plant at Souk Tleta,
Algeria in mid-2011. This plant features the
10
world’s largest ultrafiltration (UF) pre-treatment
installation in any SWRO, although the record
will be surpassed this year when our other mega
500,000 m 3 /day capacity SWRO desalination plant
in Algeria comes on-stream.
Hyflux has been a pioneer in the introduction
of UF membranes on a large scale as a highly
cost-efficient pre-treatment solution for seawater
desalination. Today, we are a market leader in UF
membranes with our flagship product, Kristal.
Recognition of our innovation and entrepreneurship
came in the form of the various awards that we
have garnered through the years, including most
recently, the award for Entrepreneurship in the
Financial Times ArcelorMittal Boldness in Business
Awards 2011.
LEADING THE WAY
We continue to invest in the future of our Group to
develop new membrane products and capabilities
despite the current slowdown in the global
economy. We see this investment as strategic.
We will be ready when the market picks up, and
we envisage demand for our membrane solutions
to increase with the growing need for good clean
water across the world.
We will soon move into our new Hyflux Innovation
Centre (HIC) located at the junction of Bendemeer
and Boon Keng Roads. The rapid expansion of our
Group over the last five years has made this move
necessary. HIC adopts “green” and “intelligent”
features and has received a Solar Pioneer Award
from the Energy Innovation Programme Office
and the Energy Market Authority for our efforts to
harvest renewable energy for common areas of
the building. The entire complex and surrounding

MESSAGE FROM EXECUTIVE CHAIRMAN & GROUP CEO
gardens have been designed to stimulate creativity
and innovation – an environment where ideas
germinate into technology breakthroughs for the
water industry.
The manufacturing activities for all our membrane
products and systems will eventually be carried out
at Hyflux Production Hub which is being developed
in phases. Some of our key products are already
being produced out of the hub.
GIVING BACK TO THE COMMUNITY
One of the reasons why Hyflux has been able to
grow is the support that we have received from the
country and the community. When the opportunity
came for us to give back, we were more than
ready. On 9 August 2011, Hyflux stood tall to salute
the nation’s 46th birthday. It was the first time that
we had a contingent marching at the National Day
Parade.
Our corporate and social responsibility (CSR)
efforts are on four main areas – education,
environment, entrepreneurship and programmes
that benefit the less fortunate in our community.
Apart from corporate philanthropy, we want to raise
staff volunteerism and build sustainability in our
CSR efforts.
THANK YOU
We thank our Board for its advice, encouragement
and support through 2011. We saw a few changes
in the composition of our Board of Directors in
2011. We welcomed Mr Simon Tay and Mr Gary
Kee to the Board on 3 May 2011. Shareholders
may read the profiles on Mr Tay and Mr Kee in the
following pages of this Annual Report. We were
saddened by the passing of our Director Prof Tan
Teck Meng on 7 July 2011. Prof Tan had been on
our Board since April 2007 and was a member of
the Audit Committee.
On 22 February 2012, I was re-designated as
Executive Chairman & Group CEO by the Board.
The Board has also appointed Mr Teo Kiang Kok
as Lead Independent Director of Hyflux.
We would also like to thank our shareholders for
holding faith in us. The Board has proposed a final
dividend of 2.10 Singapore cents per ordinary
share. This is in addition to an interim dividend of
0.67 Singapore cents per ordinary share that was
paid out on 7 September 2011.
Our Hyflux employees deserve the recognition
for their hard work, their energy and their spirit of
adventure. The challenges that we face together
push us to dig deeper, to be more resourceful and
to be more innovative in the solutions that we offer
to our customers.
To sum up FY2011, we did it our way.
OLIVIA LUM
Executive Chairman & Group CEO
HYFLUX LTD
ANNUAL REPORT 2011
11

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
BOARD OF DIRECTORS
Olivia Lum
Executive Chairman & Group CEO
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.
Managing the Group for more than 20
years now, Ms Lum is the driving force
behind Hyflux’s growth and business
expansion, and is responsible for policy
and strategy formulation and corporate
direction.
A former Nominated Member of
the Singapore Parliament, Ms Lum
currently is a member of the Singapore-
Tianjin Economic & Trade Council,
the Singapore-Jiangsu Cooperation
Council, Singapore-Zhejiang Economic
& Trade Council and Singapore
Business Federation Council as well as
the President of the Singapore Compact
for Corporate Social Responsibility.
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 most recently the Ernst &
Young World Entrepreneur Of The Year
2011.
Ms Lum holds an Honours degree in
Science from the National University of
Singapore.
12
Teo Kiang Kok
Lead Independent Director
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 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 in 1987, he worked
for brief periods 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 Barristerat-Law
from Lincoln’s Inn.
Mr Teo was the Head of the Corporate
Finance and China practices of SLB.
In his 29 years of legal practice, he has
advised on a wide range of corporate
finance transactions, particularly
securities offerings, mergers and
acquisitions, joint ventures and strategic
investments. He has significant
experience in equity capital markets
and has advised on many public
offerings of securities by Singapore and
foreign companies. Mr Teo’s regional
practice includes foreign investment
work in and out of Singapore, the
Peoples’ Republic of China, India and
the ASEAN countries.
In the course of his legal practice, Mr
Teo has advised listed companies
extensively on corporate law and
regulatory compliance and in particular,
the listing and compliance requirements
of companies listed on the Singapore
Exchange Securities Trading Limited.
Mr Teo retired as a senior partner of
SLB in May 2011 and is currently a
consultant to SLB.
Lee Joo Hai
Non-Executive Independent Director
Mr Lee has been a Non-Executive
Independent Director of Hyflux Ltd
since December 2000. He is also the
Chairman of the Audit Committee and a
member of the Remuneration and Risk
Management Committees.
Mr Lee is a CPA and a member of
both the Institute of Certified Public
Accountants of Singapore and the
Institute of Chartered Accountants in
England and Wales. He is currently
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.

BOARD OF DIRECTORS
Gay Chee Cheong
Non-Executive Independent Director
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.
He is a member of the Board of
Governors of Temasek Polytechnic,
an Advisory Board member of the
Lee Kong Chian School of Business
at Singapore Management University,
a member of the Entrepreneurship
Committee at National University of
Singapore and a Trustee of the United
World College of South East Asia
Foundation. He sits as a member on
the Board of Heliconia Pte Ltd and is
the Chairman of the Investment and
Divestment Committee.
Mr Gay co-founded and was the 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.
Christopher Murugasu
Non-Executive Independent Director
Mr Murugasu has been a director of
Hyflux Ltd since February 2005. He is
also a member of the Nominating and
Remuneration Committees.
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.
Rajsekar Kuppuswami Mitta
Non-Executive Independent Director
Mr Mitta has been a Non-Executive
Independent Director of Hyflux Ltd since
April 2007. He is also the Chairman of
the Risk Management Committee and a
member of the Audit Committee.
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.
Mr Mitta 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
HYFLUX LTD
ANNUAL REPORT 2011
and customer-intensive companies,
technology-intensive corporations and
regional governments. His client list
includes multinationals like PepsiCo,
Gillette, Kelloggs, and the Governments
of Singapore, Malaysia, Indonesia,
Philippines, Australia and India, as
well as regional conglomerates like
Hutchisons (HK), Jardines (HK),
Bakrie (Indonesia), Reliance (India),
Amex, Citicorp, British Airways and
telecom operators like Optus, Orange,
Singapore Telecom and Deutsche
Telekom.
Prior to his consulting experience of
over 20 years, Mr Mitta worked in senior
marketing roles with Pepsico (US and
Cyprus) and Mars Inc. (UK).
His main focus is 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 from the
University of Bombay, and a Master in
Business Administration from the Indian
Institute of Management, Ahmedabad.
13

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
BOARD OF DIRECTORS
Simon Tay
Non-Executive Independent Director
Mr Tay has been a Non-Executive
Independent Director of Hyflux Ltd since
May 2011. He is also a member of the
Risk Management Committee.
Mr Tay holds a Master’s in Law from
Harvard Law School, an LLB Hons from
the National University of Singapore,
and is a qualified advocate and solicitor
of the Supreme Court of Singapore.
He is an Associate Professor and he
teaches international law at the Faculty
of Law of the National University of
Singapore, with a focus on international
environmental law.
He is concurrently Chairman of the
Singapore Institute of International
Affairs, an independent think tank,
and Senior Consultant with the
WongPartnership law firm, giving
special attention to the green economy
practice and to regional businesses.
From 2002 to 2008, Mr Tay chaired the
National Environment Agency and was
previously selected for three terms as
Nominated Member of the Singapore
Parliament (1997-2001).
He has served to lead public
consultations on Singapore in the 21st
century, the national concept plan, and
the Singapore Green Plan 2012. In
2006, he received the Public Service
Medal (Pingat Baki Masyarakat, PBM),
a Singaporean National Day award.
14
Mr Tay was previously an independent
director for Hyflux Water Trust. He
serves on the boards for Toyota and for
Far East Organisation.
Gary Kee
Non-Executive Non-Independent
Director
Mr Kee has been a Non-Executive Non-
Independent 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 Non-
Independent 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.

KEY MANAGEMENT
1
5
2
6
1.
2.
3.
4.
3
7
Olivia Lum
Executive Chairman &
Group CEO
Sam Ong
Group EVP &
Group Deputy CEO
Cho Wee Peng
Group EVP & Group CFO
Winnifred Heap
Group EVP, Capital Markets
5.
6.
7.
8.
4
8
HYFLUX LTD
ANNUAL REPORT 2011
Oon Jin Teik
Group EVP & CEO, China
Dr Andrew Ngiam
Group EVP & Group COO
Foo Hee Kiang
Group EVP,
Commercial Contracts &
Industry Relations
Peter Wu
Group Senior MD &
CEO, Galaxy NewSpring
15

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
16
INNOVATION AND LEADERSHIP
Leaders are innovators. Leaders are not followers
of trend or convention. At Hyflux, we believe that
boundaries should not confine one’s aspirations, and
hurdles exist to be scaled. Our boldness to dream is
matched by our boldness to deliver.

HYFLUX LTD
ANNUAL REPORT 2011
17

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
FINANCIAL REVIEW
For year ended 31 December
(S$ million) 2010 2011 % change
Revenue 569.7 482.0 (15)
Profit before tax 100.5 62.0 (38)
Profit attributable to shareholders 88.5 53.0 (40)
Earnings per share (cents) 10.52 4.30 (59)
GROUP REVENUE BY SEGMENT
(S$ million)
18
511.2
(90%)
3.4
(1%)
FY10
55.1
(9%)
417.8
(87%)
OVERVIEW
5.4
(1%)
FY11
58.8
(12%)
Others
Industrial
Municipal
Hyflux as a group achieved revenue of S$482.0 million
and profit attributable to shareholders of S$53.0 million for
FY2011. Basic earnings per share decreased by 59% to 4.30
Singapore cents for FY2011.
REVENUE
Group revenue for FY2011 decreased by 15% to S$482.0
million as compared to S$569.7 million for FY2010 due to
the near completion of projects in the MENA region, the
impact of Arab Spring on new contracts as well as a lower
level of divestment activities in FY2011. This was partially
offset by contributions from Singapore as Hyflux commenced
construction of Tuaspring Desalination Plant in July 2011.

FINANCIAL REVIEW
GROUP REVENUE BY COUNTRY
(S$ million)
150.8
(26%)
FY10
75.1
(14%)
343.8
(60%)
We saw a shift in the geographical mix of group revenue in
FY2011 from MENA to Asia. Contributions from the MENA
market decreased from S$343.8 million in FY2010 to
S$114.4 million in FY2011, representing a decline from 60%
in FY2010 to 24% in FY2011 of our total revenue. This was
the result of lower EPC activities, with the completion of
the SWRO desalination plant in Souk Tleta, Algeria and
with the other SWRO projects in Algeria and Oman nearing
completion.
The revenue contribution from Singapore/Others market
rose significantly from S$75.1 million in FY2010 to S$226.9
million in FY2011 with the start of construction on Tuaspring
Desalination Plant. Consequently, Singapore/Others
contributed 47% of our total revenue in FY2011 compared to
just 14% in FY2010.
We saw a decrease of S$10.1 million in China’s revenue
contribution from S$150.8 million in FY2010 to S$140.7 million
in FY2011. China represented 29% of total revenue in FY2011
as compared to 26% in FY2010.
140.7
(29%)
114.4
(24%)
FY11
226.9
(47%)
HYFLUX LTD
ANNUAL REPORT 2011
Singapore / Others
MENA
China
COSTS AND EXPENSES
Raw materials and consumables used and subcontractors’
costs decreased by 14% from S$303.0 million for FY2010 to
S$259.5 million for FY2011 due to lower revenue generated.
Staff costs decreased by 8% from S$65.4 million for FY2010
to S$60.0 million for FY2011.
Finance costs increased from S$16.8 million for FY2010 to
S$22.6 million for FY2011 due to higher bank borrowings as
we geared up for the development of Tuaspring Desalination
Plant.
Depreciation, amortisation and impairment increased from
S$27.5 million for FY2010 to S$36.6 million for FY2011 due
to a change in the useful life of intangible assets from 10-15
years to 8 years in addition to an increase in property, plant
and equipment and intangible assets.
Other expenses decreased from S$68.1 million for FY2010 to
S$50.1 million for FY2011 as a result of a significant reduction
in foreign exchange loss and gains arising from sales of
machinery and equipment.
19

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
FINANCIAL REVIEW
The effective tax rate for the financial year ended 31
December 2011 was about 10.4% and remained at a level
lower than the Singapore corporate tax rate mainly due to the
tax exemptions and incentives enjoyed by certain entities in
the Group.
EARNINGS PER SHARE
Basic and fully diluted earnings per share, adjusted for
dividends on Class A Cumulative Perpetual Preference
Shares (CPS), for FY2011 decreased by 59% and 58%
respectively to 4.30 Singapore cents and 4.28 Singapore
cents respectively compared to FY2010.
BALANCE SHEET REVIEW
Shareholders’ equity increased to S$920.6 million as at 31
December 2011 from S$502.5 million as at 31 December
2010. The increase was mainly attributable to the changes
in share capital arising from the CPS issue in April 2011. Net
profit in FY2011 further boosted our equity base.
Current assets increased to S$1,099.5 million as at 31
December 2011 from S$693.7 million as at 31 December
2010. This was mainly due to net proceeds from the CPS
issue of S$393 million and trade and other receivables. The
increase was offset by the lower gross amounts due for
contract work.
Non-current assets increased to S$933.0 million as at 31
December 2011 from S$666.0 million as at 31 December
2010, mainly due to increases in financial receivables by
S$192.2 million contributed primarily by the construction of
Tuaspring Desalination Plant and an increase in investments
in associates by S$33.9 million.
Current liabilities increased to S$356.2 million as at 31
December 2011 from S$315.9 million as at 31 December
2010, as a result of an increase in loans and borrowings
during the financial year.
20
Non-current liabilities increased to S$740.7 million as at 31
December 2011 from S$529.2 million as at 31 December
2010, resulting mainly from an increase in bank borrowings
during the financial year to support our upcoming projects.
Included in the loans and borrowings as at 31 December 2011
was S$453.3 million of fixed rate unsecured notes (Notes)
issued under the Group’s Multicurrency Debt Issuance
Programme. These Notes will mature between 2014 and
2019.
Our net gearing ratio remained a low 0.18 times as at 31
December 2011 with the launch of the CPS in April 2011.
CASHFLOW AND LIQUIDITY
Hyflux’s cash position increased to S$662.4 million as at 31
December 2011 from S$222.3 million as at 31 December
2010.
In FY2011, net cash of S$56.1 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
S$165.6 million in FY2011. Cash used in investing activities
for the financial year was largely contributed by the capital
expenditure incurred for the construction of the Hyflux’s new
headquarters and investments in associates. Cash generated
from financing activities for FY2011 was mainly from the
proceeds from the CPS and borrowings to fund our projects.

OPERATING REVIEW
Tuaspring Desalination Plant, Singapore (Scaled model)
Healthy order book of S$1.9 billion
One of the top five global membrane
desalination plant suppliers
Diversified geographic mix with new
projects and expansion in Singapore
and China
HYFLUX LTD
ANNUAL REPORT 2011
ENGINEERING, PROCUREMENT AND
CONSTRUCTION (EPC)
2011 was a significant year for Hyflux in a volatile period
marked by global economic uncertainty and political upheaval
in the MENA region. In March, we secured a contract to
design, build, own and operate Singapore’s second key
desalination project from PUB, the national water agency, for
a concession period of 25 years. With a designed capacity of
318,500 m 3 /day, it is Singapore’s largest desalination plant and
also Hyflux’s largest project by contract value to date.
To optimise the operational efficiency of the desalination plant,
Hyflux has contracted the Siemens Group to build an on-site
411 MW combined cycle gas turbine power plant which will
provide energy to the desalination plant, and will, in turn, draw
cooling water from the seawater supply to the desalination
plant. This integrated strategy has enabled Hyflux to deliver the
world’s lowest first-year tariff of S$0.45/m 3 and is a testament
of our ability to put together an innovative, competitive and
cost-effective solution to serve Singapore’s water needs.
We broke ground for the desalination project in July after the
water purchase agreement was signed with PUB. Construction
commenced in the third quarter and the plant is scheduled for
completion in 2013 under a tight timeline that demonstrates the
competence that Hyflux has built up through our experience
21

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
OPERATING REVIEW
developing large-scale plants globally under the public private
partnership scheme.
During the year, we were also awarded four build-owntransfer
(BOT) contracts in China worth a total of
US$76 million by the People’s Government of Chongqing
City, Hechuan District and the People’s Government of Zunyi
City. Hyflux will develop a water treatment plant and two
wastewater treatment plants at Hechuan Industrial Park in
Chongqing City:
• Hexin District Wastewater Treatment Plant and Weituo
Wastewater Treatment Plant, each with a treatment
capacity of 20,000 m 3 /day will process wastewater for the
industrial park; and
• Weituo Water Treatment Plant will tap water from
upstream Jialing River to produce up to 50,000 m 3 /day of
potable water for industrial and domestic use.
At Zunyi City, Hyflux will develop a wastewater treatment
plant to treat up to 150,000 m 3 /day of domestic wastewater.
These four projects carry concession periods of 30 years.
In addition, we are also undertaking expansion and
enhancement works at six wastewater treatment plants in
China that have reached high utilisation levels. These plants
are part of the portfolio of Galaxy NewSpring, our 50/50 joint
S$ mil
2,000
1,500
1,000
1,117
863
venture with Mitsui & Co. This organic expansion has an
estimated project value of S$88 million and will raise capacity
by a total of 100,000 m 3 /day.
The year also saw the start of the commercial operation
of the first of our two seawater reverse osmosis (SWRO)
desalination projects in Algeria, Souk Tleta Desalination
Plant, which is capable of producing 200,000 m 3 of water
daily. The plant utilises our proprietary Kristal ultrafiltration
(UF) membranes in the pre-treatment process and is one of
the largest UF installations found in seawater desalination
plants around the world.
The startup of the 500,000 m 3 /day Magtaa Desalination Plant,
the world’s largest membrane-based seawater desalination
plant, has been delayed until the second half of 2012 as a
result of a fire that broke out at a warehouse at the project
site. This caused damage to some equipment and supplies
which had to be re-procured. The project is covered by a
comprehensive construction all risks insurance policy.
In Oman, the 68,000 m 3 /day desalination facility that
Hyflux is supplying for the Salalah Independent Water and
Power Project (IWPP) has been completed and is currently
undergoing testing and commissioning.
At the end of FY2011, our EPC order book was a healthy
S$931 million.
1,480
1,145
1,848
748
1,508*
553
1,874
931
500 465
435
601
435
0
30
166
254
335
Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11
Note:
*Includes Tobruk Desalination Plant which has since been removed from FY2011 order book
O&M order book is a summation of future revenues of our portfolio of plants over the concession periods
22
EPC
O&M
1,100
955
943

OPERATING REVIEW
Hyflux Innovation Centre, Singapore (Artist’s impression)
Hyflux operates and maintains many
plants worldwide from small water
treatment plants to large-scale
desalination plants. The close links
and feedback between our EPC and
O&M activities not only facilitate an
active transfer of know-how but also
the optimisation of plant design and
operations.
HYFLUX LTD
ANNUAL REPORT 2011
OPERATIONS & MAINTENANCE (O&M)
Our order book for O&M was S$943 million in FY2011,
accounting for the full impact of the transfer of the O&M
contracts for the portfolio of water and wastewater treatment
plants formerly held by Hyflux Water Trust (HWT) to Galaxy
NewSpring.
Hyflux operates and maintains many plants worldwide from
small water treatment plants to large-scale desalination
plants. The close links and feedback between our EPC and
O&M activities not only facilitate an active transfer of knowhow
but also the optimisation of plant design and operations.
With the anticipated completion and operation of the largescale
Magtaa Desalination Plant in 2012, we expect our O&M
order book to rise further as we continue to build up a steady,
recurring stream of income. The typical concession period
granted for water projects is about 20 to 30 years.
INNOVATION
As population growth, rapid industrialisation and urbanisation,
and climate change exert stress on natural water resources,
communities and industries are confronted with the critical
challenges of sustainable water supply and management.
23

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
OPERATING REVIEW
Our philosophy is to find ways to create better value and efficiency for
customers from the way we structure project bids, design systems and plants,
to the way we arrange financing for projects. By pushing the boundaries
of what is possible, we can help to make water cleaner, safer and more
accessible and affordable.
Increasingly stringent regulatory and environmental
restrictions on water usage as well as discharge are also
important considerations in water management. Hyflux’s
products and integrated water solutions play an integral role
in the water cycle from water treatment and desalination to
wastewater treatment and water reuse.
At the heart of our business is membrane innovation that
is focused on the design and development of membrane
products and membrane-based plants that have high
performance efficiency and reliability to help communities
and industries save energy and reduce lifecycle costs.
The year 2011 was marked by a series of product launches
including Kristal 600ET3, the next generation of Hyflux’s
flagship Kristal ultrafiltration membrane. Combining the
characteristics of current Kristal models with a new fibre
design that has three individual hollow bores fused into a
single support structure, Kristal 600ET3 is able to deliver a
robust performance in extremely harsh feed water conditions
such as turbid seawater.
In addition to Kristal 600ET3, we also introduced two new
membrane products for wastewater treatment, PetaFlex
and PoroCep submerged membrane bioreactor (MBR)
membranes. Tailored to meet the tough requirements
of municipal and industrial wastewater treatment and
reclamation, PetaFlex and PoroCep feature compact,
modular designs with high membrane permeability and low
energy consumption.
We continuously seek to improve our design and
manufacturing processes as well as invest in the
development of new technologies that will reduce our
environmental footprint and meet the challenges of
tomorrow. Hyflux Innovation Centre, a new design, R&D
and commercialisation centre in Singapore to spearhead
24
the development of membrane technologies for municipal
and industrial applications, and Hyflux Production Hub for
membrane manufacturing, which will be ready in the second
half of 2012, are clear examples of the continuing investment
Hyflux is making for the future.
But innovation does not stop at research and development.
Our philosophy is to find ways to create better value and
efficiency for customers from the way we structure project
bids, design systems and plants, to the way we arrange
financing for projects. By pushing the boundaries of what is
possible, we can help to make water cleaner, safer and more
accessible and affordable.
KEY GEOGRAPHICAL MARKETS
China
The Chinese market represented 29% or S$140.7 million of
Group revenue in FY2011. During the year, we secured four
BOT contracts worth a total of US$76 million to develop four
water and wastewater treatment plants in Chongqing City and
Zunyi City. In December, Shandong Xiajin Water Treatment
Plant and Chongqing Hexin District Wastewater Treatment
Plant were injected into Galaxy NewSpring for an aggregate
consideration of US$41.2 million, bringing the number of
plants in the portfolio to 24 and the total designed capacity to
close to 1,000,000 m 3 /day. This move is part of our asset light
strategy which will allow us to recycle the capital to expand
and develop our business.
While activities picked up as a result of new contract wins and
capacity expansion for some existing plants, slower growth
in China brought on by the weakening global economy, and
the tightening of its monetary policies affected municipal
infrastructure investments.

OPERATING REVIEW
GALAXY NEWSPRING’S PORTFOLIO OF WATER &
WASTEWATER TREATMENT PLANTS IN CHINA
Liaoning Province Hunan Province
Plant name
Liaoyang
Liaoyang
Hebei Province
Plant name
Zunhua
Langfang
Langfang
Anhui Province
Plant name
Mingguang
Mingguang
Chongqing
Plant name
Hechuan
Type
WWTP
WRP
WTP
Type
WTP
WWTP
WRP
Type
WWTP
WTP
Type
WWTP
Capacity
30,000 m3 /day
25,000 m3 /day
40,000 m3 /day
Capacity
40,000 m3 /day
80,000 m3 /day
40,000 m3 /day
Capacity
30,000 m3 /day
35,000 m3 /day
Capacity
20,000 m3 /day
Plant name
Taoyuan
Tianjin
Plant name
Beichen
Beichen
Shandong Province
Plant name
Xiajin
Zhejiang Province
Plant name
Tiantai
Type
WTP
Type
WWTP
WRP
Type
WTP
Type
WWTP
Capacity
60,000 m3 /day
Capacity
50,000 m3 /day
5,000 m3 /day
Capacity
50,000 m3 /day
Capacity
20,000 m3 /day
Note:
WWTP: Wastewater Treatment Plant; WTP: Water Treatment Plant; WRP: Wastewater Recycling Plant
Excludes additional capacities of the six wastewater treatment plants undergoing organic expansion
Jiangxi Province
Plant name
Leping
Jiangsu Province
Plant name
Taizhou
Dafeng
Yangzhou
Wuxi
Wuxi
Yangkou
Yangkou
Changshu
Guanyun
Guanyun
Type
WTP
Type
WWTP
WTP
WWTP
WWTP1
WWTP2
WTP
WWTP
WWTP
WTP1
WTP2
HYFLUX LTD
ANNUAL REPORT 2011
Capacity
30,000 m3 /day
Capacity
20,000 m3 /day
20,000 m3 /day
20,000 m3 /day
20,000 m3 /day
10,000 m3 /day
20,000 m3 /day
20,000 m3 /day
30,000 m3 /day
50,000 m3 /day
50,000 m3 /day
25

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
OPERATING REVIEW
Souk Tleta Desalination Plant, Algeria
26
Middle East and North Africa (MENA)
The MENA region accounted for 24% or S$114.4 million of
Group revenue in FY2011 compared to a contribution of
60% or S$343.8 million of Group revenue in FY2010. The
decrease in revenue contribution followed the completion of
the Souk Tleta Desalination Plant and the progress made
in the Magtaa Desalination Plant as well as the seawater
desalination facility at the Salalah IWPP in Oman which are at
the final stages of EPC.
The Arab Spring has affected prospects in MENA as planned
projects across the region were scaled back. The outlook in
the short term for the region remains uncertain although there
are pockets of opportunities.
Singapore and Others
Singapore and other markets made up 47% or S$226.9
million of Group revenue in FY2011 with the start of initial
construction works for Tuaspring Desalination Plant in the
second half of the year. In FY2010, Singapore and other
markets contributed 14% or S$75.1 million of Group revenue.
The growth in contributions from Singapore reflects our
strategic intent to diversify our geographic revenue streams.
Singapore will remain a major contributor to Group revenue
for FY2012 as activities are scaled up for the development of
Tuaspring Desalination Plant.

OPERATING REVIEW
INDUSTRY OUTLOOK
Water is a precious resource that is essential for life and
economic prosperity. People are using more of it but its
supply is limited by the natural water cycle. Global water
scarcity is made worse by population growth, urbanisation
and industrialisation in areas with limited water resources.
Climate change, bringing about more frequent and extreme
drought and rainfall, is a new phenomenon affecting water
supply. This means that access to water of adequate quality
and quantity will continue to be one of the major challenges
confronting modern society.
Desalination and water reuse offer possible responses to
mitigate water shortages as communities and industries look
to alternative water sources. Yet the timing of such projects,
particularly desalination projects are dependent on factors
such as the availability of finance and the rate of investment in
infrastructure. As a consequence, desalination projects have
been affected by the combination of political and economic
uncertainty that characterised much of 2011. Many have
been delayed while others have been cancelled. According
to Global Water Intelligence, the total contracted global
desalination capacity is still expected to reach close to
12 million m 3 /day by 2016, but from a lower base of
5 million m 3 /day in 2012 instead of the initial 8 million m 3 /day
forecasted.
Despite the slowdown and cutback in projects, especially of
those in the MENA region, opportunities are present in Asia.
In China, the government is encouraging the development of
the seawater desalination industry in its bid to alleviate severe
water shortages in coastal and northern regions. According
HYFLUX LTD
ANNUAL REPORT 2011
By leveraging on our core capabilities, accumulated experience and culture
of innovation, we have not only succeeded in gradually lowering the overall
costs of desalinated water, but also created a competitive advantage that has
transformed us into one of the world’s top five membrane-based desalination
suppliers by contracted capacity.
to a statement released by China’s General Office of the
State Council, the country aims to quadruple seawater
desalination capacity from the current 660,000 m 3 /day to
2.2 - 2.6 million m 3 /day by 2015. It will also require waterintensive
industries along the coast where freshwater
resources are scarce or in areas where groundwater is
overexploited, to prioritise the use of desalinated water.
Over in India, the desalination market is projected to triple
to US$1.2 billion by 2017 as rising demand from industries
spurs the construction of more seawater desalination
plants particularly in Tamil Nadu and Gujarat where
state government initiatives have attracted investment in
desalination.
In 2005, SingSpring Desalination Plant, our first large-scale
desalination project and Singapore’s first desalination plant,
began producing water for the country. Since then, we have
gone on to build China’s, Southeast Asia’s as well as the
world’s largest SWRO desalination plants. By leveraging on
our core capabilities, accumulated experience and culture
of innovation, we have not only succeeded in gradually
lowering the overall costs of desalinated water, but also
created a competitive advantage that has transformed us
into one of the world’s top five membrane-based desalination
suppliers by contracted capacity according to the International
Desalination Association’s latest Desalination Yearbook.
From desalination and water reuse to water and wastewater
treatment, we are passionate about continually creating
solutions to make water clean, safe, accessible and affordable
for all.
27

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
28

INNOVATORS AT HYFLUX
Our employees are a passionate people who share
a big dream, who are ready to embrace new ideas
and learn new things, who do not shy away from
doing the untried and untested, and who, despite
various challenges, continue to persevere and remain
optimistic, and emerge as winners.
HYFLUX LTD
ANNUAL REPORT 2011
29

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
CORPORATE SOCIAL RESPONSIBILITY
The diverse talents, experiences and
perspectives within our Group not
only help us to break barriers and
build stronger relationships at a local
level but also serve as catalysts for
new ideas and innovation.
HUMAN CAPITAL
Hyflux employs some 2,300 employees around the world.
The Hyflux team is a global, diverse and passionate group.
The diverse talents, experiences and perspectives within our
Group not only help us to break barriers and build stronger
relationships at a local level but also serve as catalysts for
new ideas and innovation. In this way, we will be able to
deploy a core team of leaders each time a new project or a
new geographical market is started.
We believe in creating an inclusive workplace and investing
in our people by giving them unparalleled opportunities to
develop their careers and capabilities. Professional training
and development programmes, job rotation, overseas
postings are designed to equip employees 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.
Outstanding employees are recognised for the significant
contributions made to the company with the annual CEO
Award which was inaugurated in 2008. Six employees from
our offices in Singapore, China and India received the award
in 2011.
We make it a priority to engage employees through various
channels such as regular dialogue sessions between senior
management and employees, workshops and work-life
balance programmes. Other platforms include an intranet
portal which shares company news and events as well as
general employee resources.
30
Hyflux’s marching contingent celebrates Singapore’s birthday
ENVIRONMENT
Hyflux contributes to sustainable development by helping to
meet the world’s growing water needs in environmentally and
socially responsible ways. Our activities are guided by our
goal of making a positive difference and reducing our impact
on the environment.
The new Hyflux Innovation Centre which will serve as our
global headquarters as well as R&D and commercialisation
centre has been conceptualised with sustainability in mind
from the design to construction phase. In addition to using
eco-friendly building materials, the building has energy and
water saving features. An overall 30% reduction in energy
consumption each year is expected. In recognition of our
efforts to integrate a solar system into our overall plan for
environmental sustainability, we received the Solar Pioneer
Award from Singapore’s Energy Innovation Programme
Office and the Energy Market Authority. We are also working
towards achieving the Building & Construction Authority’s
Green Mark, a benchmarking scheme incorporating
internationally recognised best practices in environmental
design and performance of buildings.
The water treatment plants, including seawater desalination
plants that we develop help communities and industries
to achieve water security as well as meet the increasingly
stringent treatment and discharge standards and
environmental guidelines set by municipalities, governments
and international bodies like the WHO.
We continuously seek to improve the efficiency of water
treatment methods through innovative design, layout and
processes so that we can limit and/or mitigate the effects
of our activities on the surroundings. By enhancing the
performance of our membrane products and plants, we are

CORPORATE SOCIAL RESPONSIBILITY
Hyflux management makes mooncakes for charity event
able to deliver high quality water for domestic and industrial
use at better energy efficiency, smaller plant footprint, lower
chemical requirements, and lower costs.
HEALTH & SAFETY
Safe and reliable operations are fundamental to us. 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. 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 an emphasis is placed
on personal and collective accountability. Our Environment,
Safety and Health Committee continuously strives to
strengthen our safety culture through rigorous processes,
regular training programmes and rewards for 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
of initiatives including social development and community
investment projects.
A 49-strong contingent marched in Singapore’s National Day
Parade on 9 August 2011, in a proud display of our heritage
and the integral role that we play in ensuring the nation’s
water security. This followed four months of rigorous training
before the event. It was the first time that a Hyflux marching
contingent celebrated Singapore’s birthday.
Safe, clean drinking water for Cambodian villages
HYFLUX LTD
ANNUAL REPORT 2011
During the year, we took part in many activities in support
of the less fortunate, education and the environment,
amongst others. We also contributed to disaster relief efforts
through supplying our portable and easy-to-use Hyflux
track membrane water filters to effectively remove particle
contaminants, bacteria and turbidity in water.
Our corporate social responsibility philosophy goes beyond
philanthropic efforts. We encourage staff to reach out to
the communities in which we live and work by serving
with volunteer organisations that help the needy or the
handicapped. We also play an active role in entrepreneurship
development. From time to time, our senior management
speak at entrepreneurship forums or host students from
different parts of the world to share the story of Hyflux’s
success and their personal work experiences. In doing so, we
hope to promote the spirit of enterprise and to help aspiring
entrepreneurs channel their creativity toward successful
ventures.
Water is a basic necessity for sustaining life but access to
safe drinking water remains a key global challenge. Such
inadequacies result in considerable social costs, and high
incidences of waterborne diseases which children and the
elderly are particularly vulnerable to. Hyflux is committed to
playing a part toward a sustainable and secure water future.
We partner with Social Capital Venture, a nonprofit social
venture, to bring clean, safe and affordable water to rural
villages in Cambodia through a customised water filtration
system that draws on our technical expertise and membrane
technology. Designed in a way that is easy to install,
operate and maintain, the system removes drinking water
contaminants and bacteria.
31

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
INVESTOR RELATIONS
In both good times and bad, our investor relations efforts are guided by
the principle of providing clear, consistent and timely information about
the company’s 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.
2011 was a challenging time for Hyflux. The Arab Spring led
to the cancellation of a contract we won in November 2010
to build a desalination plant in Tobruk, Libya and dampened
the outlook of the global water industry of which the MENA
region is a key market for large-scale municipal desalination.
Coupled with the Eurozone debt crisis, sluggish conditions in
the United States and tightening monetary policies in China,
the weakened market conditions resulted in a significant pullback
in municipal infrastructure investments.
Hyflux’s senior management and investor relations team
continued to actively reach out to the investment community
and media throughout the year to engage and keep the
investment community informed of key developments at
Hyflux.
A key event during the year was the launch of Hyflux’s 6%
Cumulative, Non-Convertible, Non-Voting Perpetual Class A
Preference Shares in April 2011. This exercise was meant to
raise funds to finance new water and infrastructure projects
around the world including Tuaspring Desalination Plant in
Singapore. Roadshows and advertisements placed in major
newspapers communicated the offer to potential investors.
A telephone hotline was also provided during the entire offer
period for interested parties to obtain information. The issue
attracted strong interest and was over-subscribed by about
six times. We successfully raised S$400 million, leading the
way as the first corporate in Singapore to launch such an
instrument.
In both good times and bad, our investor relations efforts
are guided by the principle of providing clear, consistent
and timely information about the company’s performance,
strategies and business outlook to facilitate informed
32
investment decisions, nurture continued confidence in the
company and foster strong, enduring relations with the
investment community.
We use 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 recognition of our commitment to high standards of
corporate disclosure and governance, Hyflux was awarded
runner-up in the services/utilities/agriculture category of the
Most Transparent Company Award 2011 at the Investors’
Choice Awards presented by the Securities Investors
Association (Singapore).
To show our appreciation to shareholders for their faith in
us, the directors have recommended a final dividend of 2.10
Singapore cents per share. This, together with the interim
dividend of 0.67 Singapore cents paid earlier in the year,
brings the total dividend for FY2011 to 2.77 Singapore cents
per share.

FINANCIAL STATEMENTS
34
41
42
43
44
45
46
50
52
123
133
135
137
138
139
HYFLUX LTD
ANNUAL REPORT 2011
Directors’ Report
Statement by Directors
Independent Auditors’ Report
Statement of Financial Position
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Financial Statements
Corporate Governance Statement
Supplementary Information
Statistics of Shareholdings
Substantial Ordinary Shareholders
Hyflux Group of Companies
Corporate Information
33

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
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 2011.
Directors
The directors in office at the date of this report are as follows:
Olivia Lum Ooi Lin Executive Chairman and Group CEO
Teo Kiang Kok
Lee Joo Hai
Gay Chee Cheong
Christopher Murugasu
Rajsekar Kuppuswami Mitta
Simon Tay Seong Chee (Appointed on 3 May 2011)
Gary Kee Eng Kwee (Appointed on 3 May 2011)
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 and in related corporations (other than wholly-owned subsidiaries) are
as follows:
name of director and
corporation in which
interests are held
the company
Ordinary shares
At beginning
of the year/
date of
appointment
Direct interest Deemed interest
At end
of the year
At
21/1/2012
At beginning
of the year/
date of
appointment
At end
of the year
At
21/1/2012
Olivia Lum Ooi Lin 252,351,211 252,351,211 252,351,211 15,000,000 15,000,000 15,000,000
Teo Kiang Kok – – – – 375,000 375,000
Gay Chee Cheong 675,000 1,000,000 1,000,000 – – –
Christopher Murugasu 729,843 842,343 842,343 180,000 180,000 180,000
the company
Preference shares
Olivia Lum Ooi Lin – 8,020 8,020 – – –
Teo Kiang Kok – 3,000 3,000 – – –
Gay Chee Cheong – 12,000 12,000 – – –
Christopher Murugasu – 1,000 1,000 – – –
Rajsekar Kuppuswami Mitta – – – – 20,000 20,000
34

DIRECTORS’ REPORT (CONT’D)
Directors’ interests (cont’d)
name of director and
corporation in which
interests are held
Share options (2001 Scheme)
At beginning
of the year/
date of
appointment
Direct interest Deemed interest
At end
of the year
At
21/1/2012
At beginning
of the year/
date of
appointment
At end
of the year
At
21/1/2012
Olivia Lum Ooi Lin 6,750,000 6,750,000 6,750,000 – – –
Teo Kiang Kok 750,000 425,000 425,000 – – –
Lee Joo Hai 750,000 425,000 425,000 – – –
Gay Chee Cheong 675,000 425,000 425,000 – – –
Christopher Murugasu 740,625 678,125 678,125 – – –
Rajsekar Kuppuswami Mitta 375,000 425,000 425,000 – – –
Share options (2011 Scheme)
HYFLUX LTD
ANNUAL REPORT 2011
Olivia Lum Ooi Lin – 8,598,000 8,598,000 – – –
There were no changes in any of the above mentioned interests in the Company between the end of the financial year and 21 January
2012, except as disclosed above.
By virtue of Section 7 of the Act, Olivia Lum Ooi Lin is deemed to have interests in the other subsidiaries of Hyflux Ltd, 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 of the financial year, or date of appointment
if later, or at the end of the financial year.
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 for salaries, bonuses and fees and those benefits that are disclosed in this report and in note 34 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.
35

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
DIRECTORS’ REPORT (CONT’D)
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 have 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 SGX 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 Company’s Remuneration Committee. It was in force since 27 September 2011 and shall
expire on 26 September 2021.
36

DIRECTORS’ REPORT (CONT’D)
shAre options (cont’d)
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:
number of
holders as at
31 December
2011 exercise period
options
outstanding at
31 December
2011
options
forfeited
options
exercised
options
granted
options
outstanding at
1 January 2011
exercise
price
per share
$
Date of grant
of options
2001 scheme
15/10/2001 0.1792 56,947 – (38,625) (18,322) – – 15/10/2002 – 14/10/2011
11/01/2002 0.2749 1,125 – (1,000) – 125 1 11/01/2003 – 10/01/2012
28/03/2002 0.3624 7,172 – (6,375) – 797 2 28/03/2003 – 27/03/2012
08/07/2002 0.3776 1,125 – (1,000) – 125 1 08/07/2003 – 07/07/2012
07/01/2003 0.3997 750 – – – 750 2 07/01/2004 – 06/01/2013
07/04/2003 0.4835 113,625 – (95,116) – 18,509 2 07/04/2004 – 06/04/2013
16/10/2003 0.7054 257,625 – (2,000) – 255,625 5 16/10/2004 – 15/10/2013
08/12/2003 0.6798 150,000 – (100,000) – 50,000 1 08/12/2004 – 07/12/2013
29/12/2003 0.7085 54,000 – – – 54,000 5 29/12/2004 – 28/12/2013
14/05/2004 0.6400 180,000 – (180,000) – – – 14/05/2005 – 13/05/2014
07/02/2005 1.2400 1,707,000 – (351,000) (750) 1,355,250 23 07/02/2006 – 06/02/2015
09/05/2005 1.5378 6,750,000 – – – 6,750,000 1 09/05/2006 – 08/05/2015
01/06/2005 1.6995 27,000 – – – 27,000 1 01/06/2006 – 31/05/2015
08/06/2005 1.7671 40,500 – – – 40,500 1 08/06/2006 – 07/06/2015
28/03/2006 1.7747 357,000 – (174,000) (18,000) 165,000 6 28/03/2007 – 27/03/2016
28/03/2006 1.7747 1,050,000 – (1,050,000) – – – 28/03/2007 – 27/03/2011
18/10/2006 1.5747 1,470,000 – – – 1,470,000 3 18/10/2007 – 16/10/2016
07/12/2006 1.5813 2,160,000 – (339,000) (123,000) 1,698,000 42 07/12/2007 – 06/12/2016
05/04/2007 1.7493 390,000 – – – 390,000 2 05/04/2008 – 04/04/2017
23/05/2007 1.7387 126,000 – (48,000) (48,000) 30,000 1 23/05/2008 – 22/05/2017
25/09/2007 1.8613 2,802,000 – (183,000) (330,000) 2,289,000 26 25/09/2008 – 24/09/2017
26/05/2008 2.4187 3,255,000 – – (1,305,000) 1,950,000 30 26/05/2009 – 25/05/2018
31/10/2008 0.9813 5,983,500 – (733,000) (874,500) 4,376,000 64 31/10/2009 – 30/10/2018
09/01/2009 1.2720 750,000 – – – 750,000 1 09/01/2010 – 08/01/2019
15/05/2009 1.1987 1,185,000 – (135,000) (645,000) 405,000 3 15/05/2010 – 14/05/2019
22/10/2009 2.0733 495,000 – – (270,000) 225,000 2 22/10/2010 – 21/10/2019
26/02/2010 2.3600 1,665,000 – – – 1,665,000 8 26/02/2011 – 25/02/2020
26/02/2010 2.3600 2,250,000 – – – 2,250,000 6 26/02/2011 – 25/02/2015
16/11/2010 2.1907 2,355,000 – – (330,000) 2,025,000 27 16/11/2011 – 15/11/2020
04/03/2011 1.8920 – 5,130,000 – (555,000) 4,575,000 68 04/03/2012 – 03/03/2021
04/03/2011 1.8920 – 300,000 – – 300,000 6 04/03/2012 – 03/03/2016
HYFLUX LTD
ANNUAL REPORT 2011
2011 scheme
18/10/2011 1.4660 – 8,598,000 – – 8,598,000 1 18/10/2012 – 17/10/2021
35,640,369 14,028,000 (3,437,116) (4,517,572) 41,713,681 341
37

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
DIRECTORS’ REPORT (CONT’D)
shAre options (cont’d)
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
options granted
for the financial
year ended
31 December 2011
Aggregate options
granted since
commencement
of schemes to
31 December 2011
Aggregate options
exercised since
commencement
of schemes to
31 December 2011
Aggregate options
outstanding
as at
31 December 2011
2001 scheme
Olivia Lum Ooi Lin – 6,750,000 – 6,750,000
Teo Kiang Kok 50,000 800,000 (375,000) 425,000
Lee Joo Hai 50,000 800,000 (375,000) 425,000
Gay Chee Cheong 50,000 725,000 (300,000) 425,000
Christopher Murugasu 50,000 1,409,375 (731,250) 678,125
Rajsekar Kuppuswami Mitta 50,000 425,000 – 425,000
2011 scheme
Olivia Lum Ooi Lin 8,598,000 8,598,000 – 8,598,000
Total 8,848,000 19,507,375 (1,781,250) 17,726,125
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.
38

DIRECTORS’ REPORT (CONT’D)
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 (Appointed on 5 May 2011)
Gary Kee Eng Kwee, non-executive non-independent director (Appointed on 5 May 2011)
The members of the Audit Committee, collectively, have expertise and extensive experience in legal, accounting, financial management
and business, and are qualified to discharge the Audit Committee’s 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 Company’s 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 Chapter 9 of the SGX Listing Manual.
HYFLUX LTD
ANNUAL REPORT 2011
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.
39

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
DIRECTORS’ REPORT (CONT’D)
AuDit committee (Cont’d)
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 Group 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 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
Director
────────────────────
teo Kiang Kok
Director
23 March 2012
40

STATEMENT BY DIRECTORS
In our opinion:
(a) the financial statements set out on pages 43 to 122 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 2011 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
Director
────────────────────
teo Kiang Kok
Director
23 March 2012
HYFLUX LTD
ANNUAL REPORT 2011
41

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
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 statement of financial position of the Group and the Company as at 31 December 2011, 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 43 to 122.
Management’s responsibility for the financial statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions
of the Singapore Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards, and for devising and maintaining
a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from
unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the
preparation of true and fair 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 auditor’s judgement, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant
to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly
drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a true and fair view of the
state of affairs of the Group and of the Company as at 31 December 2011 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
23 March 2012
42

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2011
Group company
note 2011 2010 2011 2010
$’000 $’000 $’000 $’000
non-current assets
Property, plant and equipment 4 188,571 155,826 – –
Intangible assets 5 43,876 62,075 – 1,779
Intangible assets arising from service concession arrangements 6 154,937 129,494 – –
Investments in subsidiaries 7 – – 169,420 119,820
Investments in joint venture 8 – – 3,125 3,125
Investments in associates 9 108,887 75,032 13,704 13,320
Financial receivables 11 418,320 226,149 – –
Trade and other receivables 12 15,552 15,816 445,312 16,924
Deferred tax assets 13 2,829 1,616 – –
total non-current assets 932,972 666,008 631,561 154,968
current assets
Gross amounts due for contract work 14 176,910 254,469 – –
Inventories 15 24,195 26,261 – –
Financial receivables 11 4,937 5,851 – –
Trade and other receivables, including derivatives 12 231,093 182,398 729,141 608,382
Other investments 10 – 2,429 – 2,429
Cash and cash equivalents 16 662,358 222,286 96,407 65,656
total current assets 1,099,493 693,694 825,548 676,467
current liabilities
Trade and other payables, including derivatives 17 227,840 210,038 135,567 73,480
Loans and borrowings 18 118,121 95,660 88,438 52,538
Tax payable 10,262 10,251 2,983 2,893
total current liabilities 356,223 315,949 226,988 128,911
net current assets 743,270 377,745 598,560 547,556
non-current liabilities
Loans and borrowings 18 712,301 503,606 573,811 443,668
Deferred tax liabilities 13 28,374 25,640 – –
total non-current liabilities 740,675 529,246 573,811 443,668
net assets 935,567 514,507 656,310 258,856
equity
Share capital 604,740 207,474 604,740 207,474
Reserve for own shares (4,461) (1,292) (4,461) (1,292)
Capital reserve 6,467 4,752 796 –
Foreign currency translation reserve 3,635 (14,637) – –
Hedging reserve (3,996) (3,560) – –
Employees’ share option reserve 19,647 18,609 19,647 18,609
Retained earnings 294,559 291,155 35,588 34,065
total equity attributable to owners of the company 920,591 502,501 656,310 258,856
non-controlling interests 14,976 12,006 – –
total equity 19 935,567 514,507 656,310 258,856
The accompanying notes form an integral part of these financial statements.
HYFLUX LTD
ANNUAL REPORT 2011
43

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
CONSOLIDATED INCOME STATEMENT
YEAR ENDED 31 DECEMBER 2011
note 2011 2010
$’000 $’000
Revenue 22 481,975 569,737
Other income 8,064 6,855
Changes in inventories of finished goods and work-in-progress (408) 2,641
Raw materials and consumables used and subcontractors’ cost (259,473) (302,961)
Staff costs (60,040) (65,408)
Depreciation, amortisation and impairment (36,637) (27,501)
Other expenses (50,067) (68,089)
Finance costs 23 (22,597) (16,760)
Share of profit of associates, net of income tax 1,226 1,959
Profit before income tax 24 62,043 100,473
Tax expense 25 (6,318) (11,588)
Profit for the year 55,725 88,885
Profit attributable to:
Owners of the Company 53,027 88,510
Non-controlling interests 2,698 375
Profit for the year 55,725 88,885
earnings per share (cents)
Basic earnings per share 26 4.30 10.52
Diluted earnings per share 26 4.28 10.23
The accompanying notes form an integral part of these financial statements.
44

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 31 DECEMBER 2011
2011 2010
$’000 $’000
Profit for the year 55,725 88,885
other comprehensive income
Foreign currency translation differences for foreign operations 18,831 (20,310)
Share of hedging reserve of associates 342 424
Effective portion of changes in fair value of cash flow hedges (778) 2,301
Net change in fair value of cash flow hedges transferred to profit or loss – 431
Share of statutory reserve of associates – (102)
other comprehensive income/(loss) for the year, net of income tax 18,395 (17,256)
total comprehensive income for the year 74,120 71,629
Total comprehensive income attributable to:
Owners of the Company 70,863 72,384
Non-controlling interests 3,257 (755)
total comprehensive income for the year 74,120 71,629
The accompanying notes form an integral part of these financial statements.
HYFLUX LTD
ANNUAL REPORT 2011
45

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 DECEMBER 2011
total equity
Foreign
employees’
attributable
reserve
currency
share
to owners non-
share for own capital translation hedging option retained of the controlling total
capital shares reserve reserve reserve reserve earnings company interests equity
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Group
At 1 January 2011 207,474 (1,292) 4,752 (14,637) (3,560) 18,609 291,155 502,501 12,006 514,507
46
total comprehensive income for
the year
Profit for the year – – – – – – 53,027 53,027 2,698 55,725
Other comprehensive income
Foreign currency translation
differences for foreign operations – – – 18,272 – – – 18,272 559 18,831
Share of hedging reserve of
associates – – – – 342 – – 342 – 342
Effective portion of changes in fair
value of cash flow hedges – – – – (778) – – (778) – (778)
Total comprehensive income/(loss)
for the year – – – 18,272 (436) – 53,027 70,863 3,257 74,120
The accompanying notes form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONT’D)
YEAR ENDED 31 DECEMBER 2011
total equity
Foreign
employees’
attributable
reserve
currency
share
to owners non-
share for own capital translation hedging option retained of the controlling total
capital shares reserve reserve reserve reserve earnings company interests equity
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Group
Transactions with owners,
recognised directly in equity
contributions by and distributions
to owners
Issue of shares for cash under
Employees’ Share Option Scheme 4,697 – – – – – – 4,697 – 4,697
Issue of Class A Cumulative
Perpetual Preference Shares
(CPS) 392,569 – – – – – – 392,569 – 392,569
Own shares acquired – (3,169) – – – – – (3,169) – (3,169)
Value of employee services received
for issue of share options – – – – – 1,038 – 1,038 – 1,038
Transfer to capital reserve – – 1,715 – – – (1,715) – – –
Capital contributions from noncontrolling
interests of a subsidiary – – – – – – – – 50 50
Liquidation of subsidiaries – – – – – – – – (337) (337)
Dividends declared – – – – – – (47,908) (47,908) – (47,908)
total transactions with owners 397,266 (3,169) 1,715 – – 1,038 (49,623) 347,227 (287) 346,940
At 31 December 2011 604,740 (4,461) 6,467 3,635 (3,996) 19,647 294,559 920,591 14,976 935,567
HYFLUX LTD
ANNUAL REPORT 2011
The accompanying notes form an integral part of these financial statements.
47

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONT’D)
YEAR ENDED 31 DECEMBER 2011
48
total equity
Foreign
employees’
attributable
reserve
currency
share
to owners non-
share for own capital translation hedging option retained of the controlling total
capital shares reserve reserve reserve reserve earnings company interests equity
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Group
At 1 January 2010 105,114 (1,292) 8,627 4,543 (6,716) 16,780 238,188 365,244 28,158 393,402
total comprehensive income for
the year
Profit for the year – – – – – – 88,510 88,510 375 88,885
Other comprehensive income
Foreign currency translation
differences for foreign operations – – – (19,180) – – – (19,180) (1,130) (20,310)
Share of hedging reserve of
associates – – – – 424 – – 424 – 424
Effective portion of changes in fair
value of cash flow hedges – – – – 2,301 – – 2,301 – 2,301
Net change in fair value of cash flow
hedges transferred to profit or loss – – – – 431 – – 431 – 431
Share of statutory reserve of
associates – – (102) – – – – (102) – (102)
Total comprehensive (loss)/income
for the year – – (102) (19,180) 3,156 – 88,510 72,384 (755) 71,629
The accompanying notes form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONT’D)
YEAR ENDED 31 DECEMBER 2011
Foreign
employees’
reserve
currency
share
non-
share for own capital translation hedging option retained
controlling
capital shares reserve reserve reserve reserve earnings company interests
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
total
equity
attributable
to owners
of the
total
equity
Group
Transactions with owners,
recognised directly in equity
contributions by and distributions
to owners
Issue of shares for cash under
Employees’ Share Option Scheme 6,181 – – – – – – 6,181 – 6,181
Issue of shares for cash under
warrant subscription agreements 96,179 – – – – – – 96,179 – 96,179
Value of employee services received
for issue of share options – – – – – 1,829 – 1,829 – 1,829
Transfer to capital reserve – – 1,321 – – – (1,321) – – –
Dividends declared – – – – – – (34,222) (34,222) – (34,222)
total contributions by and
distributions to owners 102,360 – 1,321 – – 1,829 (35,543) 69,967 – 69,967
changes in ownership interests in
subsidiaries
Acquisition of non-controlling
interests without a change in
control – – (5,094) – – – – (5,094) (15,397) (20,491)
total changes in ownership
interests in subsidiaries – – (5,094) – – – – (5,094) (15,397) (20,491)
total transactions with owners 102,360 – (3,773) – – 1,829 (35,543) 64,873 (15,397) 49,476
At 31 December 2010 207,474 (1,292) 4,752 (14,637) (3,560) 18,609 291,155 502,501 12,006 514,507
HYFLUX LTD
ANNUAL REPORT 2011
The accompanying notes form an integral part of these financial statements.
49

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
CONSOLIDATED CASH FLOW STATEMENT
YEAR ENDED 31 DECEMBER 2011
note 2011 2010
$’000 $’000
Cash flows from operating activities
Profit before income tax 62,043 100,473
Adjustments for:
Allowance for inventory obsolescence 15 113 1,412
Depreciation, amortisation and impairment 36,637 27,501
Employees’ share option expense 1,038 1,829
Fair value loss/(gain) on derivative financial instruments 594 (754)
Finance costs 22,597 16,760
Financial receivables written off 3,056 –
Gain on liquidation of subsidiaries (296) –
Gain on sale of investment property – (1,186)
(Gain)/loss on sale of property, plant and equipment (11,899) 380
Impairment of investments – 264
Impairment of trade and other receivables 2,889 1,526
Intangible assets written off 25 –
Interest income (3,041) (3,125)
Remeasurement to fair value of an associate to joint venture – (22,787)
Share of profit of associates, net of income tax (1,226) (1,959)
112,530 120,334
Change in inventories 1,576 4,840
Change in gross amounts due for contract work 75,747 (134,475)
Change in trade and other receivables (49,861) 10,154
Change in trade and other payables 25,595 (53,448)
cash from/(used in) operating activities before service concession arrangement projects 165,587 (52,595)
Change in financial receivables from service concession arrangements (194,308) 7,142
Change in intangible assets arising from service concession arrangements (20,052) 4,291
cash used in operating activities after service concession arrangement projects (48,773) (41,162)
Income tax paid (7,373) (8,305)
net cash used in operating activities (56,146) (49,467)
The accompanying notes form an integral part of these financial statements.
50

CONSOLIDATED CASH FLOW STATEMENT (CONT’D)
YEAR ENDED 31 DECEMBER 2011
note 2011 2010
$’000 $’000
Cash flows from investing activities
Acquisition of a joint venture, net of cash acquired 28 – (27,212)
Acquisition of intangible assets (5,094) (12,858)
Acquisition of non-controlling interests 28 – (20,491)
Acquisition of property, plant and equipment 4 (53,366) (28,111)
Additional investment in an associate (33,079) (23,691)
Capital contribution from non-controlling interests of a subsidiary 50 –
Change in amounts due from related parties (non-trade) (427) 1,955
Dividends received from associates 1,470 10,179
Interest received 2,657 2,760
Investment in available-for-sale money market instrument – (2,429)
Net cash outflow from liquidation of subsidiaries (178) –
Proceeds from sale of investment property – 3,237
Proceeds from sale of other investments 2,429 –
Proceeds from sale of property, plant and equipment 26,280 937
net cash used in investing activities (59,258) (95,724)
Cash flows from financing activities
Dividends paid to equity holders of the Company (47,908) (34,222)
Decrease/(increase) in deposits pledged 204 (204)
Interest paid (17,702) (16,297)
Net proceeds from CPS issue 392,569 –
Payment of finance lease liabilities – (73)
Proceeds from borrowings 605,085 383,447
Proceeds from exercise of share options and warrants 4,697 102,360
Purchases of treasury shares (3,169) –
Repayment of borrowings (399,125) (221,832)
Net cash from financing activities 534,651 213,179
net increase in cash and cash equivalents 419,247 67,988
Cash and cash equivalents at 1 January 222,082 166,735
Effect of exchange rate fluctuations on cash held 86 (12,641)
cash and cash equivalents at 31 December 16 641,415 222,082
The accompanying notes form an integral part of these financial statements.
HYFLUX LTD
ANNUAL REPORT 2011
51

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS
These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the Board of Directors on 23 March 2012.
1 DomiciLe AnD Activities
Hyflux Ltd (the Company) is incorporated in the Republic of Singapore. The address of the Company’s registered office is Hyflux
Building, 202 Kallang Bahru, Singapore 339339.
The financial statements of the Company as at and for the year ended 31 December 2011 comprise the Company and its
subsidiaries (together referred to as the Group and individually as Group entities) and the Group’s 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.
2 BAsis oF prepArAtion
2.1 statement of compliance
The financial statements have been prepared in accordance with the Singapore Financial Reporting Standards (FRS).
2.2 Basis of measurement
52
The financial statements have been prepared on the historical cost basis except for derivative financial instruments which are
measured at fair value.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
2 BAsis oF prepArAtion (cont’d)
2.3 Functional and presentation currency
These financial statements are presented in Singapore dollars, which is the Company’s 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 – residual values and useful lives of property, plant and equipment;
• Note 5 – useful lives and recoverability of intangible assets;
• Notes 4 and 5 – key assumptions used in discounted cash flow projections;
• Note 21 – recoverability of trade and other receivables; and
• Note 33 – contingencies.
2.5 changes in accounting policies
Overview
On the adoption of new and revised FRSs as of 1 January 2011, the Group changed its accounting policies in the following areas:
(i) measurement of non-controlling interests in business combinations
HYFLUX LTD
ANNUAL REPORT 2011
From 1 January 2011, the Group has applied the amendments to FRS 103 Business Combinations resulting from the
Improvements to FRSs 2010 in measuring at the acquisition date, non-controlling interests that are not present ownership
interests and do not entitle their holders to a proportionate share of the acquiree’s net assets in the event of liquidation.
Such non-controlling interests are now measured at fair value (see note 3.1).
Previously, the Group has elected on a transaction-by-transaction basis whether to measure non-controlling interests
that are not present ownership interests and do not entitle holders to proportionate share of the acquiree’s net assets
on liquidation at fair value, or at the non-controlling interests’ proportionate share of the recognised amounts of the
acquiree’s identifiable net assets, at the acquisition date.
This change in accounting policy has been applied prospectively to new business combinations occurring on or after 1
January 2011 and has no material impact on earnings per share.
53

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
2 BAsis oF prepArAtion (cont’d)
2.5 changes in accounting policies (cont’d)
Overview (cont’d)
(ii) Identification of related party relationships and related party disclosures
From 1 January 2011, the Group has applied the revised FRS 24 Related Party Disclosures (2010) to identify parties that
are related to the Group and to determine the disclosures to be made on transactions and outstanding balances, including
commitments, between the Group and its related parties. FRS 24 (2010) improved the definition of a related party in order
to eliminate inconsistencies and ensure symmetrical identification of relationships between two parties.
The adoption of FRS 24 (2010) affects only the disclosures made in the financial statements. There is no financial effect
on the results and financial position of the Group for the current and previous financial years. Accordingly, the adoption
of FRS 24 (2010) has no impact on earnings per share.
3 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
54
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.
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.
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.
For non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the
acquiree’s net assets in the event of liquidation, the Group elects on a transaction-by-transaction basis whether to measure them
at fair value, or at the non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net
assets, at the acquisition date. All other non-controlling interests are measured at acquisition-date fair value or, when applicable,
on the basis specified in another standard.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.1 Basis of consolidation (cont’d)
Business combinations (cont’d)
When share-based payment awards (replacement awards) are exchanged for awards held by the acquiree’s employees
(acquiree’s awards) and relate to past services, then all or a portion of the amount of the acquirer’s replacement awards is
included in measuring the consideration transferred in the business combination. This determination is based on the marketbased
value of the replacement awards compared with the market-based value of the acquiree’s awards and the extent to which
the replacement awards relate to past and/or future service.
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-forsale
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.
Associates
HYFLUX LTD
ANNUAL REPORT 2011
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 Group’s 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 Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest, including any longterm
investments, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has
an obligation or has made payments on behalf of the associate.
55

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.1 Basis of consolidation (cont’d)
Acquisition of non-controlling interests
Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore
the carrying amounts of assets and liabilities are not changed and goodwill is not recognised as a result of such transactions. The
adjustments to non-controlling interests are based on a proportionate amount of the net assets of the subsidiary. Any difference
between the adjustment to non-controlling interests and the fair value of consideration paid is recognised directly in equity and
presented as part of equity attributable to owners of the Company.
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 Group’s 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 Group’s interest in the joint ventures.
Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Group’s
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 by the Company
Investments in subsidiaries, joint ventures and associates are stated in the Company’s statement of financial position at cost less
accumulated impairment losses.
3.2 Foreign currency
56
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 arising on the retranslation of
available-for-sale equity instruments, or qualifying cash flow hedges, which are recognised in other comprehensive income.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.2 Foreign currency (cont’d)
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 closing rate. 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 in the
foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net
investment in a foreign operation. These 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-for-sale
financial assets.
Loans and receivables
HYFLUX LTD
ANNUAL REPORT 2011
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.
57

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.3 Financial instruments (cont’d)
58
Loans and receivables (cont’d)
Loans and receivables comprise cash and cash equivalents, trade and other receivables, financial receivables arising from
service concession arrangements, and gross amounts due from contract work.
Cash and cash equivalents
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 Group’s 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. The Group’s investments in equity securities are classified as available-forsale
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 (see note 3.9) and foreign
currency differences on available-for-sale debt instruments (see note 3.2), 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.
Where an investment in equity securities classified as available-for-sale does not have a quoted market price in an active market
and other methods of determining fair value do not result in a reasonable estimate, the investment is measured at cost less
impairment losses.
Non-derivative financial liabilities
All financial liabilities 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.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.3 Financial instruments (cont’d)
Non-derivative financial liabilities (cont’d)
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.
Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a
component of cash and cash equivalents for the purpose of the statement of cash flows.
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 if it is non-redeemable, or redeemable only at the Company’s 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
HYFLUX LTD
ANNUAL REPORT 2011
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.
59

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.3 Financial instruments (cont’d)
Derivative financial instruments, including hedge accounting (cont’d)
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.
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
60
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.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.4 property, plant and equipment (cont’d)
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.
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-in-progress is not depreciated.
The estimated useful lives for the current and comparative years are as follows:
Plant and machinery - 4 to 10 years
Motor vehicles - 4 to 5 years
Computers - 1 to 5 years
Office equipment - 4 to 5 years
Leasehold properties and improvements - 4 to 5 years or over the lease period ranging from 5 to 36 years
Furniture and fittings - 4 to 5 years
HYFLUX LTD
ANNUAL REPORT 2011
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if
appropriate.
61

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.5 intangible assets
62
Goodwill
Acquisitions prior to 1 January 2001
Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable
assets and liabilities of the acquiree.
Goodwill and negative goodwill on acquisitions were written off against retained earnings in the year of acquisition.
Goodwill and negative goodwill that have previously been taken to reserves are not taken to profit or loss when (a) the business
is disposed of or (b) the goodwill is impaired.
Acquisitions occurring between 1 January 2001 and 1 January 2005
Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable
assets and liabilities of the acquiree.
Goodwill arising on the acquisition of subsidiaries and joint ventures is presented in intangible assets. Goodwill arising on the
acquisition of associates is presented together with investments in associates.
Goodwill was stated at cost from the date of initial recognition and amortised over its estimated useful life of not more than 20
years. On 1 January 2005, the Group discontinued amortisation of this goodwill. This remaining goodwill balance is subject to
testing for impairment.
Negative goodwill was derecognised by crediting retained earnings on 1 January 2005.
Acquisitions on or after 1 January 2005
Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets and represents the excess of:
• 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.
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.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.5 intangible assets (cont’d)
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.
Service concession arrangements
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.
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 - 10 years
Capitalised development costs - 8 years
Licensing fees - 10 to 20 years
Service concession arrangements - 10 to 25 years
HYFLUX LTD
ANNUAL REPORT 2011
63

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.5 intangible assets (cont’d)
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 the public 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 Group’s statement of financial position.
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
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
Group’s 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.
3.9 impairment
64
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.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.9 impairment (cont’d)
Loans and receivables
The Group considers evidence of impairment for loans and receivables at both a specific asset and collective level. All individually
significant loans and receivables are assessed for specific impairment. All individually significant receivables found not to be
specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Loans
and receivables that are not individually significant are collectively assessed for impairment by grouping together loans and
receivables with similar risk characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of default, the timing of recoveries and the
amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such
that the actual losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows, discounted at the asset’s original effective interest rate. Losses
are recognised in profit or loss and reflected in an allowance account against loans and receivables. Interest on the impaired
asset continues to be recognised through the unwinding of the discount. 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 transferring the cumulative loss that has been
recognised in other comprehensive income, and presented in the fair value reserve in equity, to profit or loss. The cumulative
loss that is removed from other comprehensive income and recognised in 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 impairment attributable to time value are reflected as a component of interest income.
Any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in other comprehensive
income.
Non-financial assets
HYFLUX LTD
ANNUAL REPORT 2011
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful lives or that are not yet available
for use, the recoverable amount is estimated each year at the same time. An impairment loss is recognised if the carrying amount
of an asset or its related cash-generating unit (CGU) exceeds its estimated recoverable amount.
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.
65

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.9 impairment (cont’d)
Non-financial assets (cont’d)
The Group’s corporate assets do not generate separate cash inflows and are utilised by more than one CGU. Corporate assets
are allocated to CGUs on a reasonable and consistent basis and tested for impairment as part of the testing of the CGU to which
the corporate asset is allocated.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce
the carrying 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 asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately, and therefore is
not tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a
single asset when there is objective evidence that the investment in an associate may be impaired.
3.10 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 Group’s 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 Group’s 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.
3.11 Employee benefits
66
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 services are rendered
by employees.
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is
provided.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.11 Employee benefits (cont’d)
Short-term employee benefits (cont’d)
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 vesting
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 share-based payment awards
with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and
there is no true-up for differences between expected and actual outcomes.
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 unconditionally become 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
HYFLUX LTD
ANNUAL REPORT 2011
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.
67

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.13 revenue (cont’d)
68
Construction revenue - Construction contracts and sale of plants under service concession arrangements (cont’d)
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.
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 Group’s 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.
Goods sold
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 persuasive evidence exists,
usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to
the buyer, 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 the 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.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
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.
Jobs Credit Scheme
Cash grants received from the Singapore government in relation to the Jobs Credit Scheme are recognised as income upon
receipt.
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.
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
3.17 tax
HYFLUX LTD
ANNUAL REPORT 2011
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.
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;
69

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
3.17 tax (cont’d)
• temporary differences related to investments in subsidiaries and jointly controlled entities to the extent that it is probable
that they will not reverse in the foreseeable future; and
• taxable temporary differences arising on the initial recognition of goodwill.
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 income 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 the ordinary course of business, there are many transactions and calculations for which the ultimate tax treatment is uncertain.
Therefore, the Company recognises tax liabilities based on estimates of whether additional taxes and interest will be due. These
tax liabilities are recognised when the Company believes that certain positions may not be fully sustained upon review by tax
authorities, despite the Company’s belief that its tax return positions are supportable. The Company 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 multifaceted judgements
about future events. New information may become available that causes the Company 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.
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. Both basic and diluted EPS
of the Group are adjusted for the effect of any provision for preference shares dividends.
3.19 segment reporting
70
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating
segments’ operating results are reviewed regularly by the Group’s CEO 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 CEO include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Company’s headquarters),
head office expenses, and tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, and intangible
assets other than goodwill.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
3 siGniFicAnt AccountinG poLicies (cont’d)
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 2011, and have not been applied in preparing these financial statements. None of these are expected to have a
significant effect on the financial statements of the Group and the Company.
4 property, pLAnt AnD equipment
HYFLUX LTD
ANNUAL REPORT 2011
Leasehold
properties Furniture
plant and motor
Office
and and construction-
note machinery vehicles computers equipment improvements fittings in-progress total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Group
cost
At 1 January 2010
Acquisitions
through business
38,817 3,129 10,630 2,275 46,777 1,715 59,864 163,207
combinations 28 – – – – 6,942 328 – 7,270
Additions 2,195 788 1,103 390 4,688 181 18,766 28,111
Transfers
Transfer from
583 – – (24) 7,712 25 (8,296) –
intangible assets
Transfer from lease
5 3,058 – – – 104 – – 3,162
prepayment – – – – 9,540 – – 9,540
Disposals
Effect of movements
(1,992) (906) (69) (33) (361) (12) – (3,373)
in exchange rates
At 31 December 2010
(2,311) (128) (97) (50) (2,026) (23) (2,922) (7,557)
and 1 January 2011 40,350 2,883 11,567 2,558 73,376 2,214 67,412 200,360
Additions 4,679 197 735 95 1,712 356 45,592 53,366
Transfers
Transfer from/(to)
10,202 (10) 715 45 4,767 (53) (15,666) –
intangible assets 5 7,057 – – – – – (89) 6,968
Disposals
Effect of movements
(14,399) (434) (157) (212) (4,794) (7) (323) (20,326)
in exchange rates 86 37 (155) 20 3,017 107 2,438 5,550
At 31 December 2011 47,975 2,673 12,705 2,506 78,078 2,617 99,364 245,918
71

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
4 property, pLAnt AnD equipment (cont’d)
72
note
plant and
machinery
motor
Office
Leasehold
properties
and
vehicles computers equipment improvements and fittings
Furniture construction-
in-progress total
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Accumulated
depreciation and
impairment losses
At 1 January 2010
Depreciation for the
12,270 2,029 5,566 1,510 6,059 847 – 28,281
year 3,874 350 2,092 246 3,287 263 – 10,112
Disposals (1,123) (752) (53) (12) (104) (12) – (2,056)
Impairment loss
Transfer from lease
2,901 – – – – – 4,956 7,857
prepayment
Effect of movements
– – – – 1,343 – – 1,343
in exchange rates
At 31 December 2010
(721) (70) 9 (49) (183) 11 – (1,003)
and 1 January 2011
Depreciation for the
17,201 1,557 7,614 1,695 10,402 1,109 4,956 44,534
year 5,453 466 2,354 245 3,505 363 – 12,386
Disposals (4,046) (381) (148) (177) (749) (107) – (5,608)
Impairment loss – – – – – – 3,717 3,717
Transfer
Transfer from
– (4) – (4) – 8 – –
intangible assets
Effect of movements
5 1,157 – – – – – – 1,157
in exchange rates 5 23 (92) 10 1,200 15 – 1,161
At 31 December 2011 19,770 1,661 9,728 1,769 14,358 1,388 8,673 57,347
carrying amounts
At 1 January 2010 26,547 1,100 5,064 765 40,718 868 59,864 134,926
At 31 December 2010
and 1 January 2011 23,149 1,326 3,953 863 62,974 1,105 62,456 155,826
At 31 December 2011 28,205 1,012 2,977 737 63,720 1,229 90,691 188,571

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
4 property, pLAnt AnD equipment (cont’d)
computers
Furniture
and fittings total
$’000 $’000 $’000
company
cost
At 1 January 2010, 31 December 2010, 1 January 2011 and 31 December 2011 1,018 11 1,029
Accumulated depreciation
At 1 January 2010, 31 December 2010, 1 January 2011 and 31 December 2011 1,018 11 1,029
carrying amounts
At 1 January 2010, 31 December 2010, 1 January 2011 and 31 December 2011 – – –
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 Group’s
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 2011, 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 2012. 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 2013 using
a pre-tax discount rate of 11% (2011: 9%). Based on the assessment, the Group recognised an impairment loss of $3,717,000
(2010: $4,956,000). The production plant is included in the People’s Republic of China Industrial CGU. See note 5 for the key
assumptions used in determining the recoverable amount of the CGU.
Property, plant and equipment under construction
HYFLUX LTD
ANNUAL REPORT 2011
During the year, the Group has commenced construction of a new headquarter and research center, with costs capitalised up to
the reporting date totalling $41,787,000 (2010: $4,261,000).
Included in the costs capitalised above is capitalised borrowing costs related to the acquisition of the land and the construction
of the new premises amounting to $652,000 (2010: nil), with a capitalisation rate of 2.09% (2010: not applicable).
73

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
5 intAnGiBLe Assets
74
Group
cost
intellectual
property Development Licensing
note Goodwill rights costs fees total
$’000 $’000 $’000 $’000 $’000
At 1 January 2010 14,188 4,755 50,491 8,716 78,150
Additions – 161 – – 161
Additions – internally developed – – 5,377 – 5,377
Acquisition through business combinations 28 8,118 – – – 8,118
Disposal of subsidiaries to a joint venture 102 – – – 102
Transfer to property, plant and equipment 4 – – (3,162) – (3,162)
Effect of movements in exchange rates – (56) (63) (317) (436)
At 31 December 2010 and 1 January 2011 22,408 4,860 52,643 8,399 88,310
Additions – 40 – – 40
Disposal of subsidiaries to a joint venture 1,124 – – – 1,124
Additions – internally developed – – 3,930 – 3,930
Transfer to property, plant and equipment 4 – – (6,968) – (6,968)
Disposal – – (147) – (147)
Effect of movements in exchange rates – 2 (1) (18) (17)
At 31 December 2011 23,532 4,902 49,457 8,381 86,272
Accumulated amortisation
and impairment losses
At 1 January 2010 1,525 890 11,231 2,760 16,406
Amortisation for the year – 118 4,808 438 5,364
Impairment loss 2,402 53 834 1,359 4,648
Effect of movements in exchange rates – (62) (37) (84) (183)
At 31 December 2010 and 1 January 2011 3,927 999 16,836 4,473 26,235
Amortisation for the year – 59 5,130 324 5,513
Impairment loss 8,484 – 3,326 – 11,810
Disposal – – (89) – (89)
Transfer to property, plant and equipment 4 – – (1,157) – (1,157)
Effect of movements in exchange rates – 2 82 – 84
At 31 December 2011 12,411 1,060 24,128 4,797 42,396
carrying amounts
At 1 January 2010 12,663 3,865 39,260 5,956 61,744
At 31 December 2010 and 1 January 2011 18,481 3,861 35,807 3,926 62,075
At 31 December 2011 11,121 3,842 25,329 3,584 43,876

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
5 intAnGiBLe Assets (cont’d)
intellectual
property Licensing
rights fees total
$’000 $’000 $’000
company
cost
At 1 January 2010, 31 December 2010 and 1 January 2011 1,779 137 1,916
Disposals (1,779) (137) (1,916)
At 31 December 2011 – – –
Accumulated amortisation
At 1 January 2010 79 27 106
Amortisation for the year 17 14 31
At 31 December 2010 and 1 January 2011 96 41 137
Amortisation for the year 18 14 32
Disposals (114) (55) (169)
At 31 December 2011 – – –
carrying amounts
At 1 January 2010 1,700 110 1,810
At 31 December 2010 and 1 January 2011 1,683 96 1,779
At 31 December 2011 – – –
Capitalisation of development costs
Initial capitalisation of costs is based on management’s 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. During the year, $6,968,000 (2010: $3,162,000) of laboratory equipment and leasehold improvement previously classified
as development costs 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
HYFLUX LTD
ANNUAL REPORT 2011
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 2011, taking into consideration the changes in the Group’s business plan, an impairment loss of $3,326,000
(2010: $834,000) was recognised in profit or loss although those projects were already into testing phase.
75

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
5 intAnGiBLe Assets (cont’d)
76
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 Group’s 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 Group’s
operating segments as reported in note 27. The aggregate carrying amounts of goodwill allocated to each unit are as follows:
2011 2010
$’000 $’000
Singapore
- Others
The Netherlands
192 192
- Industrial
Kingdom of Saudi Arabia
– 2,402
- Industrial
People’s Republic of China
1,585 5,802
- Industrial – 1,865
- Municipal 9,344 8,220
11,121 18,481
In 2011, following a management review of the business portfolio, impairment losses recognised in profit or loss were as follows:
2011 2010
$’000 $’000
The Netherlands
- Industrial
Kingdom of Saudi Arabia
2,402 2,402
- Industrial
People’s Republic of China
4,217 –
- Industrial 1,865 –
8,484 2,402
The Netherlands Industrial CGU
The Netherlands Industrial CGU continues to be loss making in 2011. Taking into consideration the uncertainties in the European
economic conditions, management has determined that it is unlikely that the CGU would be able to generate any positive cash
flows in the near future. As such, as at 31 December 2011, management has 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 (2010:
$2,402,000).
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 has recorded an impairment loss of $4,217,000 (2010: nil) to
the goodwill arising from Kingdom of Saudi Arabia Industrial CGU.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
5 intAnGiBLe Assets (cont’d)
People’s Republic of China Industrial and Municipal CGU
The recoverable amounts of the People’s Republic of China Industrial and Municipal CGUs were based on their 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 2011 were determined in a similar manner as in 2010.
People’s Republic of China Industrial CGU
For the People’s Republic of China Industrial CGU, the calculation of the value in use were 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 5% (2010: 2% to 5%) for the years 2013 to
2016 (2010: 2011 to 2015). From 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.
People’s Republic of China Municipal CGU
For the People’s Republic of China Municipal CGU, the calculation of value in use is derived from the financial projections
approved by management. The key assumptions made are those regarding 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 5.0%. 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% (2010: 12.5%) 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 management’s assessment of future trends in the industries and are
based on both external sources and internal sources (historical data).
sensitivity to changes in assumption
HYFLUX LTD
ANNUAL REPORT 2011
Following the impairment in the People’s Republic of China Industrial CGU, the recoverable amount is equal to the carrying
amount. Therefore, any adverse movement in a key assumption would lead to further impairment.
77

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
6 intAnGiBLe Assets ArisinG From service concession ArrAnGements
78
note $’000
Group
cost
At 1 January 2010 28,579
Acquisition through business combinations 28 92,895
Transfer to joint venture (1,329)
Additions 10,628
Effect of movements in exchange rates (839)
At 31 December 2010 and 1 January 2011 129,934
Additions 22,769
Effect of movements in exchange rates 6,400
At 31 December 2011 159,103
Accumulated amortisation and impairment losses
At 1 January 2010 708
Amortisation for the year (545)
Transfer to joint venture 2
Effect of movements in exchange rates 275
At 31 December 2010 and 1 January 2011 440
Amortisation for the year 3,211
Effect of movements in exchange rates 515
At 31 December 2011 4,166
carrying amounts
At 1 January 2010 27,871
At 31 December 2010 and 1 January 2011 129,494
At 31 December 2011 154,937
At 31 December 2011, the Group owns water plants in China, including water treatment plants (WTPs) and wastewater treatment
plants (WWTPs), through the special project companies (SPCs) incorporated in China. 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 11). 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.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
6 intAnGiBLe Assets ArisinG From service concession ArrAnGements (cont’d)
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
requirements under the agreement.
7 investments in suBsiDiAries
company
2011 2010
$’000 $’000
Unquoted equity securities, at cost 156,011 109,649
Impairment losses (11,100) (14,338)
144,911 95,311
Loans to subsidiaries 24,509 24,509
169,420 119,820
The 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 Company’s net investments in the subsidiaries, they are stated at cost
less impairment losses, if any.
During the year, the Company has assessed the recoverable amount of its investments in subsidiaries that have been lossmaking
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 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.
During the year, the liquidation of a subsidiary, Hangzhou Zheda Hyflux Hualu Membrane Tech. Co Ltd has been completed.
Accordingly, the cost of investment and provision of impairment of $3,238,000 had been written off.
Details of major subsidiaries are as follows:
HYFLUX LTD
ANNUAL REPORT 2011
name of subsidiary country of incorporation
ownership
interest
2011 2010
% %
held by the company
Hydrochem (S) Pte Ltd Singapore 100 100
Hyflux Membrane Manufacturing (S) Pte. Ltd. Singapore 100 100
SinoSpring Utility Ltd British Virgin Islands 100 100
Spring China Utility Ltd British Virgin Islands 100 100
TuaSpring Pte Ltd Singapore 100 -
Hyflux Engineering Pte Ltd Singapore 100 100
79

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
7 investments in suBsiDiAries (cont’d)
name of subsidiary country of incorporation
ownership
interest
2011 2010
held through subsidiaries % %
Hydrochem Engineering (Shanghai) Co., Ltd People’s Republic of China 100 100
Hyflux Filtech (Shanghai) Co., Ltd People’s Republic of China 71 71
Hyflux Unitech (Shanghai) Co., Ltd People’s Republic of China 71 71
Hyflux Hi-tech Product (Yangzhou) Co., Ltd People’s Republic of China 100 100
Hyflux NewSpring Construction Engineering (Shanghai) Co., Ltd People’s Republic of China 100 100
Hyflux Engineering (Shanghai) Co., Ltd People’s Republic of China 100 100
Hyflux-TJSB Algeria SPA Algeria 51 51
Hyflux Engineering Algeria EURL Algeria 100 100
Sinolac (Huludao) Biotech Co., Ltd People’s Republic of China 100 100
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 HDDY Certified Public Accountants Co., Ltd, People’s Republic
of China and Guerza Rafik Expert Comptable G.R.E.C.
8 investments in Joint venture
80
company
2011 2010
$’000 $’000
Unquoted equity securities, at cost 3,125 3,125
Details of the joint ventures are as follows:
name of joint venture country of incorporation note
ownership
interest
2011 2010
% %
held by the company
Hyflux Marmon Development Pte. Ltd. Singapore 50 50
held through subsidiaries
Galaxy NewSpring Pte. Ltd. Singapore 50 50
H.J. NewSpring Limited Hong Kong 50 50
held through joint ventures
Tianjin Dagang NewSpring Co., Ltd People’s Republic of China 50 50
Hyflux Water Trust Singapore 28 50 50
Hyflux Utility WT (GCL) Limited Hong Kong 50 50
Hyflux NewSpring (LiaoYang GongChangLing) Co., Ltd. People’s Republic of China 50 50
Hyflux Utility WT (MG) Limited Hong Kong 50 50
Hyflux NewSpring Water Treatment (Mingguang) Co., Ltd. People’s Republic of China 50 50
Hyflux Utility (TY) Limited Hong Kong 50 50
Hyflux NewSpring (Taoyuan) Co., Ltd. People’s Republic of China 50 50
Hyflux Utility (LP) Limited Hong Kong 50 50
Hyflux NewSpring Water Treatment (Leping) Co., Ltd. People’s Republic of China 50 50
Hyflux Utility WTP (DZ) Pte Ltd Singapore 50 –

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
8 investments in Joint venture (cont’d)
name of joint venture country of incorporation note
ownership
interest
2011 2010
% %
held through joint ventures (cont’d)
Hyflux NewSpring (Dezhou) Co., Ltd People’s Republic of China 50 –
Hyflux Utility WWT (HCHX) Pte Ltd Singapore 50 –
Hyflux GaoYang Sewage Disposal (ChongQing) Co., Ltd People’s Republic of China 50 –
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, People’s
Republic of China.
The summarised financial information of the joint ventures, which are adjusted for the percentage of ownership held by the
Group, are as follows:
2011 2010
$’000 $’000
Assets and liabilities
Non-current assets 405,518 354,263
Current assets 53,603 53,879
Total assets 459,121 408,142
non-current liabilities (131,904) (81,054)
Current liabilities (48,678) (109,159)
Total liabilities (180,582) (190,213)
results
Revenue 38,218 12,677
Expenses (39,264) (15,332)
Loss before income tax (1,046) (2,655)
contingent liabilities in respect of bank guarantees for which the Group is liable (62,652) (59,938)
9 investments in AssociAtes
HYFLUX LTD
ANNUAL REPORT 2011
Group company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Unquoted equity securities 108,887 75,032 13,704 13,320
Unquoted equity securities of the Group with a carrying amount of $88,195,000 (2010: $55,834,000) have been pledged as
collateral for banking facilities granted to the associates.
81

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
9 investments in AssociAtes (cont’d)
Details of major associates are as follows:
name of associate country of incorporation
ownership
interest
2011 2010
% %
held by the company
SingSpring Trust Singapore 30 30
held through subsidiaries
Ningxia Hypow Bio-Technology Co., Ltd People’s Republic of China 25 25
Tlemcen Desalination Investment Company SAS France 30 30
Tahlyat Myah Magtaa SPA Algeria 47 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 Singapore Exchange Limited Listing Manual
if the Group’s share of its net tangible assets represents 20% or more of the Group’s consolidated net tangible assets, or if the
Group’s share of its pre-tax profits accounts for 20% or more of the Group’s consolidated pre-tax profits.
The summarised financial information of the associates, which are adjusted for the percentage of ownership held by the Group,
are as follows:
2011 2010
$’000 $’000
Assets and liabilities
Total assets 345,251 251,491
Total liabilities (296,566) (191,549)
results
Revenue 27,227 36,972
Profit after income tax 1,226 1,959
10 other investments
82
Group company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Available-for-sale money market instrument – 2,429 – 2,429

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
11 FinAnciAL receivABLes
Group
2011 2010
$’000 $’000
non-current
Financial receivables 418,320 226,087
Lease receivables – 62
current
418,320 226,149
Financial receivables 4,874 5,596
Lease receivables 63 255
4,937 5,851
Total 423,257 232,000
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 agreements.
The Group has receivables under finance leases as follows:
Group
minimum
lease payment
receivables
unearned
finance income
present value
of minimum
lease payment
receivables
minimum
lease payment
receivables
unearned
finance income
HYFLUX LTD
ANNUAL REPORT 2011
present value
of minimum
lease payment
receivables
2011 2011 2011 2010 2010 2010
$’000 $’000 $’000 $’000 $’000 $’000
Within one year 82 19 63 329 74 255
Between one and
five years – – – 81 19 62
82 19 63 410 93 317
Under the terms of the lease arrangements, no contingent rents are recognised and there are no unguaranteed residual values
accruing to the Group.
The weighted average effective interest rate of the lease receivables at 31 December 2011 is 5.5% (2010: 5.5%) per annum.
83

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
12 trADe AnD other receivABLes
84
Group company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
non-current
Trade receivables
Amounts due from:
66 261 – –
- subsidiaries (non-trade) – – 445,312 16,924
- associates (non-trade) 15,486 15,555 – –
15,552 15,816 445,312 16,924
current
Trade receivables 90,691 53,976 – –
Prepayments 4,927 1,865 3,276 245
Deposits 2,512 18,441 – 15,712
Advances to suppliers 19,826 11,278 – –
Staff advances 323 312 – –
Other receivables 12,801 13,958 – –
Derivatives 546 754 514 754
Amounts due from:
- subsidiaries (trade) – – 17,548 18,379
- subsidiaries (non-trade) – – 701,871 549,817
- joint ventures (trade) 30,015 30,806 – 16,927
- joint ventures (non-trade) 1,688 2,218 527 1,101
- associates (trade) 64,955 46,905 – –
- associates (non-trade) 2,809 1,885 5,405 5,447
231,093 182,398 729,141 608,382
Total 246,645 198,214 1,174,453 625,306
At 31 December 2011, trade receivables for the Group included a retention sum of $9,353,000 (2010: $7,090,000) relating to
construction contracts in progress.
Included in current trade receivables of the Group are note receivables of $6,356,000 (2010: $6,531,000) relating to bank
documents secured from customers for settlement of 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.
The 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 entity’s net investment in the
subsidiaries, they are stated at cost.
The non-current non-trade amounts due from associates bear interest at rates of 5.94% (2010: 6.84%) per annum and are
repayable between 2011 to 2014.
The current amounts due from subsidiaries, joint ventures and associates are interest-free and are repayable on demand.
The Group’s and the Company’s exposure to credit and currency risks, and impairment losses related to trade and other
receivables, are as set out in note 21.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
13 DeFerreD tAx Assets AnD LiABiLities
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Group company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Tax losses 17,880 25,857 – –
Deductible temporary differences 18 18 – –
17,898 25,875 – –
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. The 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:
Group
HYFLUX LTD
ANNUAL REPORT 2011
Assets Liabilities
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Property, plant and equipment – – 182 791
Intangible assets – – 4,445 3,732
Intangible assets arising from service concession arrangements (417) (769) 23,747 21,117
Tax loss carry-forwards (2,412) (847) – –
Deferred tax (assets)/liabilities (2,829) (1,616) 28,374 25,640
85

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
13 DeFerreD tAx Assets AnD LiABiLities (cont’d)
86
Movement in temporary differences during the year
From
acquisition
Balance
recognised
Balance
of recognised
Balance
as at Acquired in profit
as at subsidiaries in profit
as at
1 January in business or loss exchange 31 December by a joint or loss exchange 31 December
2010 combination (note 25) differences 2010 venture (note 25) differences 2011
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Group
Property, plant and equipment 667 – 124 – 791 – (609) – 182
Intangible assets 5,605 – (1,873) – 3,732 – 713 – 4,445
Intangible assets arising
from service concession
arrangements – 20,348 – – 20,348 2,729 (613) 866 23,330
Tax loss carry-forwards (2,761) – 1,606 308 (847) – (1,536) (29) (2,412)
3,511 20,348 (143) 308 24,024 2,729 (2,045) 837 25,545

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
14 Gross Amounts Due For contrAct WorK
Group
note 2011 2010
$’000 $’000
Costs incurred and attributable profits 1,127,765 926,508
Progress billings (964,410) (682,011)
163,355 244,497
Comprising of:
Gross amounts due from contract work 176,910 254,469
Advance payments received from customers 17 (13,555) (9,972)
163,355 244,497
15 inventories
Group
2011 2010
$’000 $’000
Raw materials and consumables 11,798 13,456
Work in progress 11,010 10,896
Finished goods 1,387 1,909
24,195 26,261
During the year, the write-down of inventories to net realisable value amounted to $113,000 (2010: $1,412,000) for the Group.
The write-down is included as part of other expenses in profit or loss.
16 cAsh AnD cAsh equivALents
HYFLUX LTD
ANNUAL REPORT 2011
Group company
note 2011 2010 2011 2010
$’000 $’000 $’000 $’000
Bank balances 198,789 104,464 13,782 3,446
Fixed deposits with financial institutions 463,569 117,822 82,625 62,210
Cash and cash equivalents in the statement of
financial position 662,358 222,286 96,407 65,656
Deposits pledged – (204)
Bank overdrafts used for cash management purposes 18 (20,943) –
Cash and cash equivalents in the statement of cash flows 641,415 222,082
87

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
17 trADe AnD other pAyABLes
Group company
note 2011 2010 2011 2010
$’000 $’000 $’000 $’000
Trade payables 183,335 169,519 – –
Progress payments from customers 14 13,555 9,972 – –
Derivatives 395 – 354 –
Accrued expenses 13,958 19,790 762 747
Other payables 15,412 8,637 8,403 3,826
Amounts due to:
- subsidiaries (trade) – – 41 37
- subsidiaries (non-trade) – – 126,007 68,870
- joint ventures (trade) 1,001 1,834 – –
- joint ventures (non-trade) 184 286 – –
227,840 210,038 135,567 73,480
Amounts due to subsidiaries, joint ventures and associates are unsecured, interest-free and repayable on demand.
The Group’s and the Company’s exposure to currency and liquidity risk related to trade and other payables are described in note
21.
18 LoAns AnD BorroWinGs
88
This note provides information about the contractual terms of the Group’s and the Company’s interest-bearing loans and
borrowings, which are measured at amortised cost. For more information about the Group’s and Company’s exposures to
interest rate, foreign currency and liquidity risks, see note 21.
Group company
note 2011 2010 2011 2010
$’000 $’000 $’000 $’000
non-current liabilities
Secured bank loans 78,096 – – –
Unsecured bank loans 180,950 280,818 120,556 220,880
Unsecured notes 453,255 222,788 453,255 222,788
712,301 503,606 573,811 443,668
current liabilities
Bank overdraft 16 20,943 – – –
Secured bank loans 6,482 43,122 – –
Unsecured bank loans 2,258 52,538 – 52,538
Unsecured notes 88,438 – 88,438 –
118,121 95,660 88,438 52,538
Total 830,422 599,266 662,249 496,206
Secured bank loans of the Group at 31 December 2011 are secured by land and building under construction with carrying amount
of $41,787,000 and a joint venture’s share mortgages of its shares of various subsidiaries. Secured bank loans of the Group at
31 December 2010 are secured by a joint venture’s share mortgages of all its shares of China subsidiaries.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
18 LoAns AnD BorroWinGs (cont’d)
Unsecured bank loans and overdraft of the Group totalling $256,291,000 (2010: $294,295,000) are guaranteed by the Company
and certain subsidiaries of the Group.
Unsecured bank loans of the Company totalling $120,556,000 (2010: $234,357,000) are guaranteed by certain subsidiaries of
the Group.
At the reporting date, the Group does not consider it is probable that a claim will be made against the Group under the guarantees
as described above.
During the year, the Company has increased the unsecured multi-currency debt which 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 2011, $544 million (2010: $224
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:
nominal
interest rate year of maturity
Face
value
2011 2010
carrying
amount
HYFLUX LTD
ANNUAL REPORT 2011
Face
value
carrying
amount
currency
$’000 $’000 $’000 $’000
Group
Unsecured bank loans SGD SIBOR + 0.93% 2010 - 2011 – – 30,000 30,000
Unsecured bank loans USD LIBOR + 0.93% 2011 – – 139,254 139,254
Unsecured bank loans USD LIBOR + 1.66% 2016 120,556 120,556 – –
Unsecured bank loans USD COF* + 2.25% 2013 – – 65,102 65,102
Unsecured bank loans USD COF* + 1.75% 2011 – – 39,062 39,062
Unsecured bank loans RMB 5.94% - 6.6% 2023 63,281 62,652 60,539 59,938
Secured bank loans USD COF* + 2.5% 2012 - 2017 33,704 33,704 – –
Secured bank loans USD LIBOR + 2.5% 2012 - 2014 51,963 50,874 – –
Secured bank loans SGD SOR + margin 2011 – – 43,159 43,122
Unsecured notes SGD 3.5% - 5.68% 2012 - 2019 543,500 541,693 223,500 222,788
Bank overdraft
Total loans and
DZD 6% - 9% 2012 20,943 20,943 – –
borrowings 833,947 830,422 600,616 599,266
company
Unsecured bank loans SGD SIBOR + 0.93% 2010 - 2011 – – 30,000 30,000
Unsecured bank loans USD LIBOR + 0.93% 2011 – – 139,254 139,254
Unsecured bank loans USD LIBOR + 1.66% 2016 120,556 120,556 – –
Unsecured bank loans USD COF* + 2.25% 2013 – – 65,102 65,102
Unsecured bank loans USD COF* + 1.75% 2011 – – 39,062 39,062
Unsecured notes SGD 3.5% - 5.68% 2012 - 2019 543,500 541,693 223,500 222,788
Total loans and
borrowings 664,056 662,249 496,918 496,206
89

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
18 LoAns AnD BorroWinGs (cont’d)
Terms and debt repayment schedule (cont’d)
COF* : 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 bank’s costs of compliance with liquidity, reserve or similar
requirements imposed by any relevant authority (if any).
19 cApitAL AnD reserves
90
Share capital
ordinary
shares cps*
2011 2010 2011 2010
no. of shares no. of shares
’000 ’000 ’000 ’000
Group and company
On issue at 1 January 857,931 528,365 – –
Issue of bonus shares – 285,977 – –
Issue of CPS – – 4,000 –
Exercise of share options 3,459 3,372 – –
Exercise of warrants – 40,217 – –
Purchase of treasury shares (2,711) – – –
On issue at 31 December 858,679 857,931 4,000 –
* 6% Cumulative Non-convertible Non-voting Perpetual Class A Perpetual Preference Shares.
All shares rank equally with regard to the Company’s 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.
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 Company’s shares that are held by the Group, the rights are suspended
until these shares are issued.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
19 cApitAL AnD reserves (cont’d)
Ordinary shares (cont’d)
Issuance of ordinary shares
3,459,000 (2010: 43,589,000) ordinary shares were issued as a result of the exercise of vested options and warrants arising
from the 2001 share option programme granted to key management staff and warrant subscription agreements. Options were
exercised at an average price of $1.364 (2010: $1.218) per option. In 2010, the warrants were exercised at an average price of
$2.392 per warrant.
All issued shares were fully paid.
CPS
Group and
company
2011
$’000
Proceeds from issue of CPS 400,000
Transaction costs (7,431)
Net proceeds/carrying amount at 31 December 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 Company’s 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 OIS.
Bonus issue
HYFLUX LTD
ANNUAL REPORT 2011
On 27 December 2010, 285,977,000 fully paid ordinary shares were issued to existing shareholders as bonus shares, in the
proportion of one share for every two shares held.
91

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
19 cApitAL AnD reserves (cont’d)
92
Warrant
By a warrant subscription agreement dated 23 November 2004 supplemented by a supplemental warrant subscription agreement
dated 25 April 2008 (Agreements) entered into between the Company and Istithmar World PJSC (formerly known as Istithmar
PJSC) (Istithmar), Istithmar was entitled to subscribe for 41,216,863 ordinary shares in the Company, subject to the terms and
conditions of the Agreements and the warrant instrument. The exercise period was from April 2008 to April 2010.
The exercise price was the higher of (a) $1.95 and (b) the lower of 70% of the volume-weighted average price for trades in the
Company’s shares transacted on the Singapore Exchange on the market day immediately preceding the exercise date or in the
30 calendar day period immediately preceding the exercise date. All the outstanding warrants have been exercised in 2010 and
there are no outstanding warrants at 31 December 2011.
Reserve for own shares
The reserve for the Company’s own shares comprises the cost of the Company’s shares held by the Group. At 31 December
2011, the Group held 3,211,000 (2010: 500,000) of the Company’s shares.
Capital reserve
The capital reserve comprises:
(a) Capital gain arising from the payment of the Group’s subscription to the share capital of a subsidiary by a non-controlling
interest; and
(b) Statutory Reserve Fund (SRF)
In accordance with the Foreign Enterprise Law in the People’s Republic of China (PRC), the Group’s 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 Group’s share of the hedging reserve of associates.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
19 cApitAL AnD reserves (cont’d)
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.
Dividends
The following dividends were declared and paid by the Group and the Company:
For the year ended 31 December
Group and company
2011 2010
$’000 $’000
Final tax-exempt dividend paid of 3.50 cents (2010: 5.00 cents) per share in respect of
previous financial year 30,108 28,515
Interim tax-exempt dividend paid of 0.67 cent (2010: 1.00 cent) per share in respect of
current financial year 5,767 5,707
$100 per CPS (2010: nil) 12,033 –
47,908 34,222
After the respective reporting dates, the following dividends were proposed by the directors. The dividends have not been
provided for and there are no income tax consequences.
Group and company
2011 2010
$’000 $’000
Final proposed tax-exempt dividend of 2.10 cents (2010: 3.50 cents) per share 18,032 30,027
20 shAre-BAseD pAyment
Description of the share-based payment arrangements
At 31 December 2011, the Group has the following share-based payment arrangements.
Share option scheme (equity-settled)
HYFLUX LTD
ANNUAL REPORT 2011
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. The 2001 Scheme provides an opportunity for employees and
directors of the Company and its subsidiaries, other than substantial shareholders of the Company, to participate in the equity of
the Company.
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.
93

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
20 shAre-BAseD pAyment (cont’d)
94
The 2001 Scheme expired on 26 September 2011.
On 27 April 2011, the members of the Company have approved the implementation of new share option scheme (the 2011
Scheme) to replace the 2001 Scheme that expired on 26 September 2011. 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 SGX Listing
Manual) shall not exceed 25% of the total number of scheme shares available under the 2011 Scheme. It was in force since 27
September 2011 and shall expire on 26 September 2021.
Both the 2001 Scheme and 2011 Scheme (collectively as the Schemes) are 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 (the
options granted for a non-executive director under 2001 Scheme has a validity period of 5 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 2011 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.
Disclosure of share option scheme
The number and weighted average exercise prices of share options are as follows:
Weighted
average
exercise
price
number
of options
Weighted
average
exercise
price
number
of options
2011 2011 2010 2010
$ $
Outstanding at 1 January 1.656 35,640,369 1.492 25,279,093
Forfeited during the year 1.782 (4,517,572) 1.657 (2,338,000)
Exercised during the year 1.364 (3,437,116) 1.218 (3,372,187)
Granted during the year 1.631 14,028,000 2.297 4,200,000
Bonus options – – 1.655 11,871,463
Outstanding at 31 December 1.658 41,713,681 1.656 35,640,369
Exercisable at 31 December 1.564 19,588,481 1.583 18,497,469
The options outstanding at 31 December 2011 have an exercise price in the range of $0.275 to $2.419 (2010: $0.179 to $2.419)
and a weighted average contractual life of 6.66 years (2010: 6.28 years).
The weighted average share price at the date of exercise for share options exercised in 2011 was $1.990 (2010: $1.485) per
share.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
20 shAre-BAseD pAyment (cont’d)
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 4 march 2011 18 october 2011
Fair value at grant date $0.383 $0.217
Share price at grant date $1.830 $1.430
Exercise price $1.892 $1.466
Expected volatility (weighted average volatility) 32% 32%
Option life (expected weighted average life) 100 days 100 days
Expected dividends 1.85% 3.95%
Risk-free interest rate (based on government bonds) 0.75% 0.34%
21 FinAnciAL instruments
Credit risk
Exposure to credit risk
HYFLUX LTD
ANNUAL REPORT 2011
The carrying amount of financial assets in the statement of financial position represents the Group and the Company’s respective
maximum credit exposure. The maximum exposure to credit risk at the reporting date was:
Group company
note 2011 2010 2011 2010
$’000 $’000 $’000 $’000
Financial receivables 11 423,257 232,000 – –
Trade receivables 12 90,757 54,237 – –
Deposits 12 2,512 18,441 – 15,712
Advances to suppliers 12 19,826 11,278 – –
Staff advances 12 323 312 – –
Other receivables 12 12,801 13,958 – –
Amounts due from:
- subsidiaries (trade) 12 – – 17,548 18,379
- subsidiaries (non-trade) 12 – – 1,147,183 566,741
- joint ventures (trade) 12 30,015 30,806 – 16,927
- joint ventures (non-trade) 12 1,688 2,218 527 1,101
- associates (trade) 12 64,955 46,905 – –
- associates (non-trade) 12 18,295 17,440 5,405 5,447
Cash and cash equivalents 16 662,358 222,286 96,407 65,656
Loans and receivables 1,326,787 649,881 1,267,070 689,963
Available-for-sale money market instrument 10 – 2,429 – 2,429
Derivatives 12 546 754 514 754
Recognised financial assets 1,327,333 653,064 1,267,584 693,146
The Group’s revenue is earned from a wide range of customers for whom there has not been a significant change in their credit
quality.
95

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
21 FinAnciAL instruments (cont’d)
96
Credit risk (cont’d)
Exposure to credit risk (cont’d)
The maximum exposure to credit risk for loans and receivables at the reporting date by type of counterparty was:
Group company
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Municipal 1,150,088 514,532 – –
Industrial 138,227 128,893 – –
Subsidiaries – – 1,164,731 585,120
Joint ventures – – 527 18,028
Associates – – 5,405 5,447
Others 38,472 6,456 96,407 81,368
1,326,787 649,881 1,267,070 689,963
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 Gross impairment
2011 2011 2010 2010
$’000 $’000 $’000 $’000
Group
Not past due 1,275,441 – 631,684 –
Past due 0 to 60 days 10,271 5 7,007 –
Past due 61 to 120 days 10,249 – 4,501 –
More than 120 days 35,753 4,922 11,969 5,280
company
1,331,714 4,927 655,161 5,280
Not past due 1,267,070 – 689,963 –

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
21 FinAnciAL instruments (cont’d)
Credit risk (cont’d)
Impairment losses (cont’d)
The movement in the allowance for impairment in respect of loans and receivables during the year was as follows:
Group
2011 2010
$’000 $’000
At 1 January 5,280 4,875
Impairment loss recognised 1,980 2,411
Impairment loss written off (1,503) (828)
Impairment loss written back (903) (885)
Effect of movements in exchange rates 73 (293)
At 31 December 4,927 5,280
At 31 December 2011, an impairment loss of the Group of $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 Group’s loans and receivables that are unimpaired at 31 December 2011 as these loans and receivables are mainly due
from governing bodies or agencies of the People’s 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 Company’s loans and receivables as
at 31 December 2011.
Cash and cash equivalents
HYFLUX LTD
ANNUAL REPORT 2011
The Group held cash and cash equivalents of $662,358,000 at 31 December 2011 (2010: $222,286,000), 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 & Poor’s ratings.
97

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
21 FinAnciAL instruments (cont’d)
98
Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact
of netting agreements:
carrying
amount
contractual
cash flows
Cash flows
Within
1 year
Between
1 and 5
years
more than
5 years
$’000 $’000 $’000 $’000 $’000
Group
2011
Non-derivative financial liabilities
Bank overdraft 20,943 (22,427) (22,427) – –
Variable interest rate loans 267,786 (315,818) (20,799) (236,586) (58,433)
Fixed interest rate notes 541,693 (642,636) (110,674) (351,302) (180,660)
Trade and other payables* 213,890 (213,890) (213,890) – –
1,044,312 (1,194,771) (367,790) (587,888) (239,093)
Derivative financial instruments
Forward exchange contracts (gross-settled) (546)
- Outflow (80,961) (80,961) – –
- Inflow 81,611 81,611 – –
Forward exchange contracts (gross-settled) 354
- Outflow (38,955) (38,955) – –
- Inflow 38,640 38,640 – –
Interest rate swaps used for hedging (net-settled) 41 (65) (41) (24) –
(151) 270 294 (24) –
* Excludes derivatives (shown separately) and progress payments from customers.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
21 FinAnciAL instruments (cont’d)
Liquidity risk (cont’d)
Cash flows
Between
carrying contractual Within 1 and 5 more than
amount cash flows 1 year years 5 years
Group
2010
Non-derivative financial liabilities
$’000 $’000 $’000 $’000 $’000
Variable interest rate loans 376,478 (423,820) (121,189) (102,635) (199,996)
Fixed interest rate notes 222,788 (257,049) (11,051) (245,998) –
Trade and other payables* 200,066 (200,066) (200,066) – –
799,332 (880,935) (332,306) (348,633) (199,996)
Derivative financial instruments
Forward exchange contracts (gross-settled) (754)
- Outflow (39,036) (39,036) – –
- Inflow 39,207 39,207 – –
(754) 171 171 – –
company
2011
Non-derivative financial liabilities
Variable interest rate loans 120,556 (131,365) (2,358) (129,007) –
Fixed interest rate notes 541,693 (642,636) (110,674) (351,302) (180,660)
Trade and other payables* 135,213 (135,213) (135,213) – –
797,462 (909,214) (248,245) (480,309) (180,660)
Derivative financial instruments
Forward exchange contracts (gross-settled) (514)
- Outflow (77,910) (77,910) – –
- Inflow 78,527 78,527 – –
Forward exchange contracts (gross-settled) 354
- Outflow (38,955) (38,955) – –
- Inflow 38,640 38,640 – –
(160) 302 302 – –
2010
Non-derivative financial liabilities
Variable interest rate loans 273,418 (291,071) (74,366) (76,325) (140,380)
Fixed interest rate notes 222,788 (257,049) (11,051) (245,998) –
Trade and other payables* 73,480 (73,480) (73,480) – –
569,686 (621,600) (158,897) (322,323) (140,380)
Derivative financial instruments
Forward exchange contracts (gross-settled) (754)
- Outflow (39,036) (39,036) – –
- Inflow 39,207 39,207 – –
(754) 171 171 – –
* Excludes derivatives (shown separately) and progress payments from customers.
HYFLUX LTD
ANNUAL REPORT 2011
99

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
21 FinAnciAL instruments (cont’d)
100
Liquidity risk (cont’d)
The maturity analysis shows the undiscounted cash flows of the Group and the Company’s financial liabilities 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.
Currency risk
Exposure to currency risk
The Group’s and Company’s exposure to foreign currency risk is as follows based on notional amounts:
31 December
2011
us dollars
31 December
2010
us dollars
$’000 $’000
Group
Trade and other receivables 245,732 362,798
Cash and cash equivalents 75,478 82,080
Loans and borrowings (154,260) (243,418)
Trade and other payables (96,952) (132,760)
company
69,998 68,700
Trade and other receivables 302,601 294,960
Cash and cash equivalents 808 40,183
Loans and borrowings (120,556) (243,418)
Trade and other payables (9,912) (49,018)
172,941 42,707
Sensitivity analysis
A 10% strengthening of the Singapore dollar, as indicated below, against the US dollars at 31 December would have decreased
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
2010, albeit that the reasonably possible foreign exchange rate variances were different, as indicated below:

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
21 FinAnciAL instruments (cont’d)
Currency risk (cont’d)
Sensitivity analysis (cont’d)
Group company
Profit before
Profit before
income tax equity income tax equity
$’000 $’000 $’000 $’000
31 December 2011
US dollars (10% strengthening) (7,000) – (17,294) –
31 December 2010
US dollars (10% strengthening) (6,870) – (4,271) –
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.
Interest rate risk
Profile
At the reporting date, the interest rate profile of the interest-bearing financial instruments was:
Fixed rate instruments
Group company
carrying amount carrying amount
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Bank overdraft (20,943) – – –
Unsecured notes (541,693) (222,788) (541,693) (222,788)
(562,636) (222,788) (541,693) (222,788)
variable rate instruments
Variable interest rate loans (267,786) (376,478) (120,556) (273,418)
Fair value sensitivity analysis for fixed rate instruments
HYFLUX LTD
ANNUAL REPORT 2011
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.
101

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
21 FinAnciAL instruments (cont’d)
102
Interest rate risk (cont’d)
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 2010.
75 bp
increase
Profit before
income tax equity
75 bp
decrease
75 bp
increase
75 bp
decrease
Group $’000 $’000 $’000 $’000
31 December 2011
Variable rate instruments (2,008) 2,008 – –
31 December 2010
Variable rate instruments (2,824) 2,824 – –
company
31 December 2011
Variable rate instruments (904) 904 – –
31 December 2010
Variable rate instruments (2,051) 2,051 – –

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
21 FinAnciAL instruments (cont’d)
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 statement of financial position,
are as follows:
Other financial
liabilities within
total
Designated Loans and the scope of carrying
note at fair value receivables
Frs 39 amount Fair value
Group $’000 $’000 $’000 $’000 $’000
31 December 2011
Cash and cash equivalents 16 – 662,358 – 662,358 662,358
Trade and other receivables* 12 – 241,172 – 241,172 241,356
Financial receivables 11 – 423,257 – 423,257 424,527
Gross amounts due from
contract work 14 – 176,910 – 176,910 176,910
Financial assets designated
at fair value through
profit or loss 12 546 – – 546 546
546 1,503,697 – 1,504,243 1,505,697
Secured bank loans 18 – – (84,578) (84,578) (84,578)
Unsecured bank loans 18 – – (183,208) (183,208) (183,208)
Unsecured notes 18 – – (541,693) (541,693) (563,951)
Trade and other payables# 17 – – (213,890) (213,890) (213,890)
Financial liabilities designated
at fair value through
profit or loss 17 (395) – – (395) (395)
Bank overdraft 18 – – (20,943) (20,943) (20,943)
(395) – (1,044,312) (1,044,707) (1,066,965)
* Excluding derivatives (shown separately) and prepayment.
# Excluding progress payments from customers and derivatives (shown separately).
HYFLUX LTD
ANNUAL REPORT 2011
103

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
21 FinAnciAL instruments (cont’d)
104
Accounting classifications and fair values (cont’d)
Fair values versus carrying amounts (cont’d)
Designated
other
financial
liabilities
within the total
at fair Loans and Available- scope of carrying
note value receivables for-sale Frs 39 amount Fair value
Group $’000 $’000 $’000 $’000 $’000 $’000
31 December 2010
Cash and cash equivalents 16 – 222,286 – – 222,286 222,286
Trade and other receivables* 12 – 195,595 – – 195,595 195,732
Financial receivables 11 – 232,000 – – 232,000 205,664
Gross amounts due from
contract work 14 – 254,469 – – 254,469 254,469
Available-for-sale money
market instrument 10 – – 2,429 – 2,429 2,429
Financial assets designated
at fair value through profit
or loss 12 754 – – – 754 754
754 904,350 2,429 – 907,533 881,334
Secured bank loans 18 – – – (43,122) (43,122) (43,122)
Unsecured bank loans 18 – – – (333,356) (333,356) (333,356)
Unsecured notes 18 – – – (222,788) (222,788) (232,801)
Trade and other payables# 17 – – – (200,066) (200,066) (200,066)
– – – (799,332) (799,332) (809,345)
* Excluding derivatives (shown separately) and prepayment.
# Excluding progress payments from customers and derivatives (shown separately).

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
21 FinAnciAL instruments (cont’d)
Accounting classifications and fair values (cont’d)
Fair values versus carrying amounts (cont’d)
Other financial
liabilities within
total
Designated Loans and the scope of carrying
note at fair value receivables Frs 39 amount Fair value
company $’000 $’000 $’000 $’000 $’000
31 December 2011
Cash and cash equivalents 16 – 96,407 – 96,407 96,407
Trade and other receivables* 12 – 1,170,663 – 1,170,663 1,170,663
Financial assets designated
at fair value through
profit or loss 12 514 – – 514 514
514 1,267,070 – 1,267,584 1,267,584
Unsecured bank loans 18 – – (120,556) (120,556) (120,556)
Unsecured notes 18 – – (541,693) (541,693) (563,951)
Trade and other payables# 17 – – (135,213) (135,213) (135,213)
Financial liabilities designated
at fair value through
profit or loss 17 (354) – – (354) (354)
(354) – (797,462) (797,816) (820,074)
* Excluding derivatives (shown separately) and prepayment.
# Excluding derivatives (shown separately).
HYFLUX LTD
ANNUAL REPORT 2011
105

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
21 FinAnciAL instruments (cont’d)
106
Accounting classifications and fair values (cont’d)
Fair values versus carrying amounts (cont’d)
other
financial
liabilities
within the total
Designated Loans and Available- scope of carrying
note at fair value receivables for-sale Frs 39 amount Fair value
company $’000 $’000 $’000 $’000 $’000 $’000
31 December 2010
Cash and cash equivalents 16 – 65,656 – – 65,656 65,656
Trade and other receivables* 12 – 624,307 – – 624,307 624,307
Available-for-sale money
market instrument 10 – – 2,429 – 2,429 2,429
Financial assets designated
at fair value
through profit or loss 12 754 – – – 754 754
754 689,963 2,429 – 693,146 693,146
Unsecured bank loans 18 – – – (273,418) (273,418) (273,418)
Unsecured notes 18 – – – (222,788) (222,788) (232,801)
Trade and other payables 17 – – – (73,480) (73,480) (73,480)
– – – (569,686) (569,686) (579,699)
* Excluding derivatives (shown separately) and prepayment.
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
2011 2010
Amounts due from associates (non-trade) 6.0% 6.0%
Unsecured notes 3.0% 3.0%
Financial receivables 2.36% - 4.45% 5.24%

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
21 FinAnciAL instruments (cont’d)
Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined
as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e.,
as prices) or indirectly (i.e., derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 1 Level 2 Level 3 total
$’000 $’000 $’000 $’000
Group
31 December 2011
Derivatives – 151 – 151
company
31 December 2011
– 151 – 151
Derivatives – 160 – 160
– 160 – 160
Group and company
31 December 2010
Derivatives – 754 – 754
Available-for-sale money market instrument – 2,429 – 2,429
– 3,183 – 3,183
22 revenue
HYFLUX LTD
ANNUAL REPORT 2011
Group
2011 2010
$’000 $’000
Construction revenue 418,530 513,127
Operating and maintenance income 39,001 32,816
Sale of goods 15,576 17,780
Finance income 6,755 3,697
Finance lease income 394 378
Others 1,719 1,939
481,975 569,737
107

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
23 FinAnce costs
Group
2011 2010
$’000 $’000
Interest expense:
- bank loans 22,597 16,756
- finance lease liabilities – 4
22,597 16,760
24 proFit BeFore income tAx
108
The following items have been included in arriving at profit before income tax:
Group
2011 2010
$’000 $’000
Net foreign currency exchange loss 2,123 16,355
Rental income from investment property – (323)
Interest income:
- fixed deposits with financial institutions (775) (325)
- associates (2,266) (2,800)
Fair value loss/(gain) on derivative financial instruments 594 (754)
Gain on sale of investment property – (1,186)
Remeasurement to fair value of an associate to joint venture – (22,787)
(Gain)/loss on sale of property, plant and equipment (11,899) 380
Operating expenses arising from rental of investment property – 88
Impairment of investments – 264
Impairment of trade and other receivables 2,889 1,526
Financial receivables written off 3,056 –
Operating lease expense 8,884 6,023
Professional fees paid to firms in which a director is member 279 3
Contribution to defined contribution plans, included in staff costs 6,531 5,669
Employees’ share option expense, included in staff costs 1,038 1,829
Research expense 1,380 2,166
Government grant under Jobs Credit Scheme – (260)
Audit fees paid to:
- auditors of the Company 579 522
- other member firms of KPMG International 218 194
- other auditors 88 89
Non-audit fees paid to:
- auditors of the Company 28 63
- other member firms of KPMG International 49 37

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
25 tAx expense
Group
2011 2010
$’000 $’000
current tax expense
Current year 11,655 11,561
(Over)/under provided in prior years (3,292) 170
Deferred tax expense
8,363 11,731
Origination and reversal of temporary differences (2,006) (314)
(Over)/under provided in prior years (39) 171
(2,045) (143)
Tax expense 6,318 11,588
Reconciliation of effective tax rate
HYFLUX LTD
ANNUAL REPORT 2011
Profit before income tax 62,043 100,473
Income tax using Singapore tax rate of 17% 10,547 17,080
Effect of different tax rates in foreign jurisdictions 998 773
Tax exempt income (2,199) (2,650)
Non-deductible expenses 5,558 2,388
Effect of partial tax exemption and tax reliefs (5,255) (6,344)
(Over)/underprovided in prior years (3,331) 341
6,318 11,588
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.
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 People’s 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
People’s 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.
109

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
26 eArninGs per shAre
110
Basic earnings per share
The calculation of basic earnings per share at 31 December 2011 was based on the profit attributable to ordinary shareholders
of $37,027,000 (2010: $88,510,000), and a weighted average number of ordinary shares outstanding of 860,219,000 (2010:
841,682,000), calculated as follows:
Profit attributable to ordinary shareholders
Group
2011 2010
$’000 $’000
Profit for the year 53,027 88,510
Dividends on CPS (16,000) –
Profit attributable to ordinary shareholders 37,027 88,510
Weighted average number of ordinary shares
Group
note 2011 2010
’000 ’000
Issued ordinary shares at 1 January 19 857,931 528,365
Effect of own shares held (345) –
Effects of share options and warrants exercised 2,633 32,756
Effect of bonus issue – 280,561
Weighted average number of ordinary shares at 31 December 860,219 841,682
Diluted earnings per share
The calculation of diluted earnings per share at 31 December 2011 was based on profit attributable to ordinary shareholders
of $37,027,000 (2010: $88,510,000), and a weighted average number of ordinary shares outstanding after adjustment for the
effects of all dilutive potential ordinary shares of 865,451,000 (2010: 865,351,000), calculated as follows:
Weighted average number of ordinary shares (diluted)
Group
2011 2010
’000 ’000
Weighted average number of ordinary shares (basic) 860,219 841,682
Effect of share options on issue 5,232 23,669
Weighted average number of ordinary shares (diluted) at 31 December 865,451 865,351
The average market value of the Company’s 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.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
27 seGment reportinG
(a) operating segments
The Group has two reportable segments, as described below, which are the Group’s strategic business units. The
strategic business units offer different products and services, and are managed separately because they require different
technology and marketing strategies. For each of the strategic business units, the Group’s CEO (the chief operating
decision maker) reviews internal management reports on at least a quarterly basis. The following summary describes the
operations in each of the Group’s reportable segments:
• 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 2011 or 2010.
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 Group’s CEO.
Segment profit is used to measure performance as management believes that such information is the most relevant in
evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment
pricing is determined on an arm’s length basis.
(b) Geographical segments
HYFLUX LTD
ANNUAL REPORT 2011
The Group operates in 3 principal geographical areas: Singapore & Others, 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.
111

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
27 seGment reportinG (cont’d)
112
Information about reportable segments
municipal industrial All other segments total
2011 2010 2011 2010 2011 2010 2011 2010
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
External revenues 417,816 511,180 58,784 55,144 5,375 3,413 481,975 569,737
Inter-segment revenue 115,225 25,593 2,839 (3,906) 703 (938) 118,767 20,749
Interest income 203 – 1,322 1,203 8 175 1,533 1,378
Interest expense (11,734) (3,783) (3) (16) (3) 115 (11,740) (3,684)
Depreciation, amortisation
and impairment (7,778) (3,378) (16,315) (14,967) (387) (2,593) (24,480) (20,938)
Reportable segment profit/
(loss) before income tax 93,972 132,687 (12,800) (11,355) 2,660 (3,178) 83,832 118,154
Share of profit/(loss) of
associates, net of income tax 287 1,774 (1,145) (1,103) 2,084 1,288 1,226 1,959
Tax (expenses)/income (6,160) (6,107) (450) (2,493) 292 (2,988) (6,318) (11,588)
Operating lease expenses (6,713) (5,293) (493) (649) (1,678) (81) (8,884) (6,023)
Contribution to defined
contribution plan, included in
staff cost (5,099) (4,251) (1,316) (1,318) (116) (100) (6,531) (5,669)
Reportable segment assets 1,418,559 900,623 214,036 249,208 86,088 14,015 1,718,683 1,163,846
Investments in associates 99,111 66,549 2,550 3,445 7,226 5,038 108,887 75,032
Capital expenditure 12,419 125,171 601 2,673 260 318 13,280 128,162
Reportable segment liabilities 353,344 261,439 25,683 23,778 55,623 63,771 434,650 348,988

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
27 seGment reportinG (cont’d)
Reconciliations of reportable segment revenues, profit or loss, assets and liabilities and other material items
2011 2010
$’000 $’000
revenues
Total revenue for reportable segments 476,600 566,324
Other revenue 5,375 3,413
Consolidated revenue 481,975 569,737
Profit or loss
Total profit or loss for reportable segments 81,172 121,332
Other profit or loss 2,660 (3,178)
83,832 118,154
Unallocated amounts:
- Other corporate expenses (23,015) (19,640)
Share of profit of associates, net of income tax 1,226 1,959
Consolidated profit before income tax 62,043 100,473
Assets
Total assets for reportable segments 1,632,595 1,149,831
Other assets 86,088 14,015
Investments in associates 108,887 75,032
Other unallocated amounts 204,895 120,824
Consolidated total assets 2,032,465 1,359,702
Liabilities
Total liabilities for reportable segments 379,027 285,217
Other liabilities 55,623 63,771
Other unallocated amounts 662,248 496,207
Consolidated total liabilities 1,096,898 845,195
Other material items in 2011
reportable
segment
totals Adjustments
HYFLUX LTD
ANNUAL REPORT 2011
consolidated
totals
$’000 $’000 $’000
Interest income 1,525 1,516 * 3,041
Interest expense (11,737) (10,860) * (22,597)
Capital expenditure 13,020 45,440 ^ 58,460
Depreciation, amortisation and impairment (24,093) (12,544) ^ (36,637)
113

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
27 seGment reportinG (cont’d)
114
Other material items in 2010
reportable
segment
totals Adjustments
consolidated
totals
$’000 $’000 $’000
Interest income 1,203 1,922 * 3,125
Interest expense (3,799) (12,961) * (16,760)
Capital expenditure 127,844 21,408 ^ 149,252
Depreciation, amortisation and impairment (18,345) (9,156) ^ (27,501)
* 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
31 December 2011
revenues
non-current
assets
$’000 $’000
Middle East & North Africa 114,410 99,504
People’s Republic of China 140,716 529,612
Singapore & Others 226,849 303,856
481,975 932,972
31 December 2010
revenues
non-current
assets
$’000 $’000
Middle East & North Africa 343,810 60,247
People’s Republic of China 150,797 488,263
Singapore & Others 75,130 117,498
569,737 666,008

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
28 Acquisitions oF A Joint venture AnD non-controLLinG interests
Business combination for the year ended 31 December 2010
In December 2010, the Group acquired additional 18.3% interest in Hyflux Water Trust (HWT), increasing its ownership from
31.7% to 50%. The investment was reclassified from an associate to a joint venture subsequent to the additional investment.
The acquisition had the following effect on the Group’s assets and liabilities on acquisition date:
preacquisition
carrying
amounts
Fair value
adjustments
HYFLUX LTD
ANNUAL REPORT 2011
recognised
values on
acquisition
$’000 $’000 $’000
Property, plant and equipment 7,270 – 7,270
Intangible assets 69,602 23,293 92,895
Financial receivables 78,895 – 78,895
Deferred tax assets 445 324 769
Cash and cash equivalents 15,582 – 15,582
Trade and other receivables 8,921 – 8,921
Trade and other payables (24,918) – (24,918)
Tax payable (366) – (366)
Loans and borrowings (43,122) – (43,122)
Deferred tax liabilities (9,522) (8,534) (18,056)
102,787 15,083 117,870
Fair value of the Group’s existing interest of 31.7% on acquisition date (74,701)
Goodwill on acquisition 8,118
Cash consideration not yet paid (8,493)
Consideration paid, satisfied in cash 42,794
Cash acquired (15,582)
Net cash outflow 27,212
Pre-acquisition carrying amounts were determined based on applicable FRS immediately before the acquisition. The values of
assets and liabilities recognised on acquisition are their estimated fair values.
The gain arising from the remeasurement to fair value of the Group’s existing interest in the associate represents the realisation
of revenue from previous sales of plants under service concession arrangements previously not recognised as construction
revenue under the service concession arrangements. As such, the gain had been recorded as part of revenue, consistent with
the Group’s accounting policy at note 3.13.
The goodwill recognised on the acquisition is attributable mainly to the future profitability and synergies related to customers’
contracts portfolio.
115

DELIVERING INNOVATIVE SOLUTIONS
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NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
28 Acquisitions oF A Joint venture AnD non-controLLinG interests (cont’d)
If the acquisition had occurred on 1 January 2010, management estimates that consolidated revenue would have been
$587,237,000 and consolidated profit for the year would have been $89,580,000. In determining these amounts, management
has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition
had occurred on 1 January 2010.
Acquisition of non-controlling interest
In February 2010, the Group acquired an additional 12% interest in Lube Oil Re-refining Co., LLC (Lubrec), increasing its
ownership from 83% to 95%.
In October 2010, the Group acquired an additional 49% interest in Sinolac (Singapore) Pte. Ltd. (Sinolac), increasing its ownership
from 51% to 100%.
The following summarises the effect of changes in the Company’s ownership interests in Lubrec and Sinolac:
Lubrec sinolac
$’000 $’000
Company’s ownership at beginning of the year 12,520 15,318
Effect of increase in Company’s ownership interest 1,735 13,662
Share of comprehensive income (4,025) (1,646)
Company’s ownership at the end of the year 10,230 27,334
29 DeterminAtion oF FAir vALues
116
A number of the Group’s 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.
Property, plant and equipment
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 arm’s 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.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
29 DeterminAtion oF FAir vALues (cont’d)
Trade and other receivables
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.
Non-derivative financial liabilities
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.
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.
30 FinAnciAL risK mAnAGement
The Group has exposure to the following risks from its use of financial instruments:
• credit risk
• liquidity risk
• market risk
HYFLUX LTD
ANNUAL REPORT 2011
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and
processes for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are
included throughout these financial statements.
117

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
30 FinAnciAL risK mAnAGement (cont’d)
118
Risk management framework
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.
The Board has established the Risk Management Committee, which is responsible for developing and monitoring the Group’s
risk management policies. The committee reports regularly to the Board of Directors on its activities.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly
to reflect changes in market conditions and the Group’s activities.
The Group Audit Committee oversees how management monitors compliance with the Group’s risk management policies and
procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. 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 Group’s receivables from customers.
Loan and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management
also considers the demographics of the Group’s 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.
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 Group’s 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 Group’s 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 Group’s reputation.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
30 FinAnciAL risK mAnAGement (cont’d)
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 short-term 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 Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters, while optimising the return.
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 Group’s capital management is to support the Group’s 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.
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
2011 2010
$’000 $’000
Loans and borrowings 830,422 599,266
Less: Cash and cash equivalents (662,358) (222,286)
Net debt 168,064 376,980
Total equity 935,567 514,507
Gearing ratio 18% 73%
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 on 27 April 2011. The Mandate is subject to renewal annually by Shareholders at the
Annual General Meeting.
There were no changes in the Group’s approach to capital management during the year.
HYFLUX LTD
ANNUAL REPORT 2011
119

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
30 FinAnciAL risK mAnAGement (cont’d)
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 People’s 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 19).
(ii) The Company is required under a financial covenant clause to maintain a consolidated total tangible net worth for the
Group of not less than $160 million.
These externally imposed capital requirements have been complied with by the Company and the relevant subsidiaries for the
financial year ended 31 December 2011.
31 operAtinG LeAses
Leases as lessee
Non-cancellable operating lease rentals are payable as follows:
Group
2011 2010
$’000 $’000
Within one year 9,984 4,340
Between one and five years 38,635 16,579
More than five years 49,474 59,677
98,093 80,596
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 Group’s activities concerning dividends, additional debt or further leasing.
32 cApitAL commitments
(i) At 31 December 2011, the Group has outstanding commitments in respect of uncalled capital of approximately
US$5,100,000 (2010: US$33,300,000) in an associate.
(ii) At 31 December 2011, the Group has outstanding capital commitments of $23,988,000 (2010: $49,462,000).
33 continGencies
120
On 28 July 2011, a fire broke out at the Magtaa desalination plant in Algeria which destroyed the warehouse which contained
certain equipment to be installed for the project. As these equipment have to be re-purchased, the project completion is expected
to be delayed till September 2012 and the Group has claimed for an extension of the contractual completion date with the project
owners. Foul play has been ruled out by the local Algerian authorities. Taking into consideration the circumstances which caused
the delay and the project is covered by a comprehensive construction all risk insurance policy, the Group is confident that an
extension of time for the completion of the project will be obtained and no contingent liabilities have been recognised.

NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
33 continGencies (cont’D)
In another project which was completed and handed over in 2011, the Group has potential contingencies arising from the delayed
completion of the construction of a plant in its capacity as the Engineering, Procurement and Construction (EPC) contractor.
However, the Group in its capacity as the EPC contractor has claimed for an extension of time 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 2011, the Group is still in negotiation with the project owner
and currently, no contingent liabilities or assets have been recognised.
In a separate design and supply of a seawater desalination facility, the customer has claimed for delay liquidated damages.
However, the Group, in its capacity as the water technology provider for the project, has, in turn, claimed for an extension of the
completion deadline as well as prolongation costs on the basis that 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 2011,
the Group is still in negotiation with the customer and currently, no contingent liabilities or assets have been recognised.
The Company has given formal undertakings to provide financial support to certain subsidiaries with deficit in shareholders’
equity for at least the next twelve months from the end of the reporting period.
34 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:
HYFLUX LTD
ANNUAL REPORT 2011
Group
2011 2010
$’000 $’000
Directors’ fees 541 490
Short-term employee benefits 4,589 4,678
Share-based payments 692 761
5,822 5,929
Comprise amounts paid/payable to:
- Directors of the Company 2,324 2,277
- Other key management personnel 3,498 3,652
5,822 5,929
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 20.
121

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
NOTES TO THE FINANCIAL STATEMENTS (CONT’D)
34 reLAteD pArties (cont’d)
Other related party transactions
Other than as disclosed elsewhere in the financial statements, transactions carried out in the normal course of business on terms
agreed with related parties are as follows:
Group
transaction value for
the year ended
31 December
Balance outstanding
as at 31 December
2011 2010 2011 2010
$’000 $’000 $’000 $’000
Director
Acquisition of non-controlling interest – 774 – –
Joint venture
Revenue from construction contracts 50,168 9,185 25,470 133
Revenue from maintenance contracts 4,919 504 3,458 652
Rental income 170 36 155 48
Associates
Revenue from construction contracts 74,751 293,754 84,391 60,962
Revenue from maintenance contracts 18,991 30,594 2,159 11,631
Management fee income – 883 – 366
35 suBsequent events
122
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, Ningxia Hypow Bio-Technology Co., Ltd (the Claimant) claiming for an amount up to RMB436 million for certain nonwater
industrial project works carried out by the subsidiaries of the Group for the Claimant.
The Company has provided a corporate guarantee for such works done by its subsidiaries. The Group believes the allegations
made by the Claimant are without merit and will defend all claims vigorously. The Company also intends to file substantive
counterclaims against the Claimant and the PRC shareholders of the Claimant. The outcome of the arbitration is uncertain.
On 5 March 2012, the Company granted 7,305,000 share options pursuant to the Hyflux Employees’ Share Option Scheme 2011
at an exercise price of $1.469 per share. The validity period of options granted is from 5 March 2012 to 4 March 2022.
On 22 March 2012, the Company announced that it has through its wholly-owned subsidiary, Hyflux Utility (India) Pte Ltd,
together with its Japanese partners, Hitachi Ltd and Itochu Corporation signed a co-developer agreement for the development of
a seawater desalination plant with a designed capacity of 336,000m 3 per day to be located in the Dahej Special Economic Zone
in the State of Gujarat, India.
As at the date of this report and subsequent to year-end, pursuant to the Shares Purchase Mandate obtained at the Annual
General Meeting on 27 April 2011, the Company had purchased by way of market acquisition an aggregate of 11,094,000
ordinary shares in the capital of the Company, which are held as treasury shares. The total consideration inclusive of brokerage
and clearing fees paid for the purchases was S$16 million. The highest price paid for the purchases was S$1.50 per share and
the lowest price paid was S$1.19 per share.

CORPORATE GOVERNANCE STATEMENT
introDuction
Hyflux continues to place great importance on the governance of the Company and its subsidiaries, which it believes is vital to its
well being and success. Hyflux is committed to best practice corporate governance and processes that will enhance the Group’s
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 Code of Corporate Governance 2005 (“code”) and believes that this forms a sound platform for supporting
good corporate governance practices.
This 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 Singapore Exchange Securities Trading Limited’s Listing
Manual.
Hyflux will continue to review and refine its practices especially in light of the Audit Committee Guidance Committee guidebook, and
other standards of best practice that develop 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 legislation and recognised
standards. Hyflux 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 2011, Hyflux complied with
the Code’s principles and guidelines.
BoArD mAtters
BOARD’S CONDUCT OF ITS AFFAIRS:
Principle 1: Effective Board to lead and control the Company
role of the Board
HYFLUX LTD
ANNUAL REPORT 2011
The primary role of the Board is to protect and enhance long-term shareholders value and on ensuring 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 Company’s activities and performance and for setting the Company’s overall
strategic direction. It provides leadership and guidance on corporate strategy, business directions, risk policy 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 Director 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 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.
The schedules of all the Board and Board Committee meetings 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 meeting by teleconferencing or videoconferencing. The
Board and Board Committees may also make decisions by way of circulating resolutions.
123

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
CORPORATE GOVERNANCE STATEMENT (CONT’D)
The Board held five meetings in the 2011 financial year. A summary of attendance by Directors at Board and Committee Meetings for
the financial year ended 31 December 2011 is as follows:
Board of
Audit
nominating
remuneration risk management
Directors
committee
committee
committee
committee
no. of no. of no. of no. of no. of no. of no. of no. of no. of no. of
meetings meetings meetings meetings meetings meetings meetings meetings meetings meetings
Name
held Attended held Attended held Attended held Attended held Attended
Olivia Lum Ooi Lin 5 5 4 4* 2 2 2 2* 5 5*
Teo Kiang Kok 5 5 2 2 2 2 1 1 5 4
Lee Joo Hai 5 5 4 4 NA NA 2 2 5 4
Gay Chee Cheong
Christopher
5 5 4 4 2 2 2 2 NA NA
Murugasu
Rajsekar
5 5 NA NA 1 1 2 2 3 3
Kuppuswami Mitta 5 4 2 1 NA NA NA NA 5 5
Simon Tay¹ 4 3 NA NA NA NA NA NA 3 3
Gary Kee Eng Kwee¹ 4 4 2 2 NA NA NA NA NA NA
Legend:
¹ Mr Simon Tay and Mr Gary Kee Eng Kwee were appointed to the Board on 3 May 2011.
* 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 Board approval.
Newly appointed Directors are provided with a training and induction programme, so as to familiarise them with the Company’s business
activities, strategic directions, policies and key new 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
The eight members’ board of the Company in office as at the date of this report is set out as follows:
Audit nominating remuneration risk management
name Board
committee committee committee committee
Olivia Lum Ooi Lin Executive Chairman Member
Teo Kiang Kok Lead
Independent Director
Chairman Member Member
Lee Joo Hai Non-Executive
Independent Director
Chairman Member Member
Gay Chee Cheong Non-Executive
Independent Director
Member Member Chairman
Christopher Murugasu Non-Executive
Independent Director
Member Member
Rajsekar Kuppuswami Mitta Non-Executive
Independent Director
Member Chairman
Simon Tay Non-Executive
Independent Director
Member
Gary Kee Eng Kwee Non-Executive
Non-Independent Director
Member
124

CORPORATE GOVERNANCE STATEMENT (CONT’D)
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 Director’s independent business judgment acting in
the interest of the Company.
While all the Directors have equal responsibilities for the performance of the Group, Non-Executive members of the Board 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 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 general policy of
the Company is to seek to have the Board comprised of at least half independent Directors.
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 Group’s business and operations.
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 12 to 14 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.
chAirmAn AnD chieF executive oFFicer
Principle 3: Clear division of responsibilities at the top of the Company
Responsibilities for various functions and departments in the Group are well defined. 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.
On 22 February 2012, Ms Olivia Lum was re-designated as Executive Chairman and Mr Teo Kiang Kok was appointed as Lead
Independent Director. Following the appointment of Mr Teo, the independence of the Board has now been further ensured and
strengthened.
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 of four Directors:
Mr Teo Kiang Kok (Chairman)
Mr Gay Chee Cheong
Ms Olivia Lum Ooi Lin
Mr Christopher Murugasu
HYFLUX LTD
ANNUAL REPORT 2011
125

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
CORPORATE GOVERNANCE STATEMENT (CONT’D)
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-nomination having regard to the Director’s 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 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 Board’s performance may be evaluated and to propose objective performance criteria.
The NC conducts an annual review of Directors’ independence and based on the Code’s criteria for independence, the NC is of the
view in respect of the financial year ended 31 December 2011, Mr Teo Kiang Kok, Mr Lee Joo Hai, Mr Gay Chee Cheong, Mr. Rajsekar
Kuppuswami Mitta, Mr Christopher Murugasu and Mr Simon Tay are deemed independent.
The NC has recommended the nomination of Directors retiring by rotation under the Company’s Articles of Association:
1. pursuant to Article 88 : Mr Simon Tay and Mr Gary Kee Eng Kwee
2. pursuant to Articles 89 : Mr Teo Kiang Kok and Mr Christopher Murugasu
In reviewing the nomination of the retiring directors, the NC considered the performance and contribution of each of the retiring directors,
having regards not only to their attendance and participation at Board and Board Committee meetings but also the time and efforts
devoted to the Group’s business and affairs.
BoArD perFormAnce
Principle 5: Formal assessment of the effectiveness of the Board and contributions by each Director.
The Code recommends that the NC be responsible for assessing 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 Board’s 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 Management’s performance. The NC conducted a
Board performance evaluation to assess the effectiveness of the Board throughout the financial year ended 31 December 2011 and is
satisfied that sufficient effort, time and attention has been given by the Directors to the affairs of the Group.
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 Group, the Company Secretary and the external auditors
at all times. The Directors also have unrestricted access to the Company’s 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.
126

CORPORATE GOVERNANCE STATEMENT (CONT’D)
The Company Secretary attends all Board and Board Committee meetings. The Company Secretary administers, attends and prepares
minutes of the Board and Board Committee meetings, and assists in ensuring that Board procedures are followed and reviewed in
accordance with the Company’s Articles of Association so that the Board functions effectively and the relevant rules and regulations
applicable to the Company are complied with. The Company Secretary’s 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 Board’s 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 the Group or the individual, 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 of 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 to ensuring 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 Directors and senior Management employees.
The RC’s 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 Group’s performance. Its recommendations are made in consultation with the Executive Committee and
submitted for endorsement by the Board. No Director is involved in deciding his own remuneration. The RC, when deemed necessary,
may obtain expert advice with regard to remuneration matters.
LeveL AnD mix oF remunerAtion
Principle 8: The level of remuneration for Directors should be adequate, not excessive, and linked to performance.
HYFLUX LTD
ANNUAL REPORT 2011
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.
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 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.
127

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
CORPORATE GOVERNANCE STATEMENT (CONT’D)
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 Group’s 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 Company’s Annual General Meeting
(“AGm”). The RC recommends a total Directors’ fees of S$540,795 be paid to Non-Executive Directors for the financial year ended 31
December 2011. 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 2011:
salary Bonus Fees
employees’
share option
scheme
Allowances
and other
benefits total
Directors
Between s$1,500,000 to s$1,750,000
Olivia Lum Ooi Lin 37% 53% 0% 8% 2% 100%
Below s$250,000
Gay Chee Cheong 0% 0% 68% 32% 0% 100%
Lee Joo Hai 0% 0% 70% 30% 0% 100%
Teo Kiang Kok 0% 0% 68% 32% 0% 100%
Christopher Murugasu 0% 0% 63% 37% 0% 100%
Rajsekar Kuppuswami Mitta 0% 0% 66% 34% 0% 100%
Simon Tay 0% 0% 100% 0% 0% 100%
Gary Kee Eng Kwee 0% 0% 100% 0% 0% 100%
top Five Key executives
Between s$1,500,000 to s$1,750,000
Olivia Lum Ooi Lin 37% 53% 0% 8% 2% 100%
s$750,000 to s$1,000,000
Sam Ong 50% 30% 0% 14% 7% 100%
Cho Wee Peng 47% 44% 0% 8% 2% 100%
Winnifred Heap 52% 35% 0% 11% 2% 100%
Below s$750,000
Oon Jin Teik 82% 7% 0% 9% 3% 100%
Andrew Ngiam 77% 14% 0% 8% 1% 100%
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 2011.
128

CORPORATE GOVERNANCE STATEMENT (CONT’D)
AccountABiLity
Principle 10: Board should present a balanced and understandable assessment of the Company’s 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-ST’s 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 financial 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 the following members:
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 of 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 AC’s 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 Company’s 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 consider 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 consider the appointment or re-appointment of external auditors
and matters relating to the resignation or removal of the auditors and approve the remuneration and terms of engagement of the
external auditors; and
8. reviews interested person transactions, as defined in the Listing Manual of the SGX-ST.
HYFLUX LTD
ANNUAL REPORT 2011
In fulfilling its responsibilities, the AC receives regular reports from the Management and the external auditors, KPMG LLP. The AC 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.
129

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
CORPORATE GOVERNANCE STATEMENT (CONT’D)
The AC reviewed all the non-audit services provided by the external auditors and the aggregate amount of audit fees paid to them.
The Audit Committee 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 KPMG 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 Company’s 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 Group’s 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 legislation, regulation and best practice, 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 Board 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 Group’s system of internal controls put in place to address the
key financial, operational and compliance risk affecting the operations.
Based on the reports submitted by internal and external auditors and the various management controls put in place, 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
risk affecting the operations are adequate to provide reasonable assurance that shareholders’ interest and the Group’s business and
assets are safeguarded and the proper accounting records are maintained and financial statement are reliable.
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 Internal Audit Director 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.
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 Auditor will also make recommendations to enhance the
effectiveness and security of the Group’s operations.
130

CORPORATE GOVERNANCE STATEMENT (CONT’D)
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
Group’s 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 Group’s 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 Company’s AGM to ensure a high level of accountability and to stay informed of
the Group’s strategies and growth.
In accordance with the principles in the Code, the full Board of Directors and the external auditor in office are required to attend the
Company’s AGM and will address any question raised at the meeting. The Group fully supports the Code’s principle to encourage active
shareholder participation.
risK mAnAGement committee
The Risk Management Committee (“rmc”) comprises the following members:-
Mr Rajsekar Kuppuswami Mitta (Chairman)
Mr Lee Joo Hai
Mr Teo Kiang Kok
Mr Simon Tay
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 Company, as well as Management’s risk mitigation efforts, with the view of safeguarding shareholder’s
interest and Group 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 Company, 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.
HYFLUX LTD
ANNUAL REPORT 2011
131

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
CORPORATE GOVERNANCE STATEMENT (CONT’D)
management committee
The members of the Management Committee for the financial year ending 31 December 2011 are:
Ms Olivia Lum Ooi Lin (Chairman)
Mr Sam Ong
Mr Cho Wee Peng
Ms Winnifred Heap
Mr Oon Jin Teik
Dr Andrew Ngiam
Mr Foo Hee Kiang
Mr Peter Wu
DeALinG in securities
The Company has adopted its own internal compliance code pursuant to the SGX-ST’s best practices on dealings in securities and
these are applicable to all its officers in relation to their dealings in the Company’s securities. Its officers are advised not to deal in the
Company’s shares during the period commencing two weeks or one month before the announcement of the Company’s quarterly or full
year results respectively, or if they are in possession of unpublished price-sensitive information of the Company. In addition, its directors
and officers are expected to observe insider trading laws at all times even when dealing in securities within the permitted trading period.
The Group has complied with the Best Practices Guide on Securities Transactions issued by the Singapore Exchange.
mAteriAL contrActs
There are no material contracts of the Company or its subsidiaries involving the interests of the 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 on a timely manner to
the AC and that the transactions are at arm’s length basis. All interested person transactions are subject to review by the AC to ensure
compliance with established procedures.
132

SUPPLEMENTARY INFORMATION
interesteD pArty trAnsAction
HYFLUX LTD
ANNUAL REPORT 2011
The Group has established procedures to ensure that all transactions with interested persons are reported on a timely manner to the
AC and that the transactions are at arm’s length basis. All interested person transactions are subject to review by the AC to ensure
compliance with the established procedures. For the year ended 31 December 2011, Hyflux Ltd and its subsidiaries did not enter into
any transaction that would be regarded as interested person transaction pursuant to SGX-ST’s Listing Manual.
133

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
SUPPLEMENTARY INFORMATION (CONT’D)
mAJor properties heLD For DeveLopment
Description Location
Factory and warehouse
building
Office and factory
building
other mAJor properties
Description Location
8 Tuas South Lane
Singapore 637302
80 Bendemeer Road
Singapore 339949
Factory building No. 99 Juli Road
Zhangjiang
High-Tech Park
Pudong Shanghai
China 201203
Office building 1307-1309 Centre
Plaza 188,
Jiefangbei HePing,
District Tianjin,
China 300042
Office building 1310-1312 Centre
Plaza 188,
Jiefangbei HePing,
District Tianjin,
China 300042
Office and factory
building
Office and factory
building
Office and factory
building
134
8# Factory in FTZ,
9# Yang Zi Jiang
South Road, Yangzhou
Jiangsu Province,
China 225131
site area
(sqm)
No 99 Tai Zhen Road,
Bin Jiang Industrial Park,
Taizhou Economic Development Zone,
Taizhou City, Jiangsu Province
China 225300
Long Gang District,
Beigang Industrial Park,
Long Cheng Road,
Huludao City,
Liaoning Province,
China 125003
intended
use
estimated
total lettable
area (sqm)
stage of
completion
expected
date of
completion
77,172 Industrial 22,262 29% 2nd quarter
of 2014
17,374 Industrial 33,362 80% 2nd quarter
of 2012
site area
(sqm)
existing
use
Approximate
total lettable
area (sqm) tenure
5,633 Commercial 7,647 50 years
commencing
from
1 January 2002
384 Commercial 232 50 years
commencing
from
12 June 1994
428 Commercial 257 50 years
commencing
from
12 June 1994
18,040 Commercial 23,115 50 years
commencing
from 2007
25,959 Commercial 12,980 50 years
commencing
from
12 June 1994
112,556 Commercial 93,565 50 years
commencing
from
31 October 2006
Group’s
effective
interest (%)
100
100
Group’s
effective
interest (%)
100
100
100
100
100
100

STATISTICS OF SHAREHOLDINGS
AS AT 22 MARCH 2012
orDinAry shAres
Class of shares : Ordinary shares
Voting rights : One vote per ordinary share
Total number of issued ordinary shares : 862,017,864
No. of issued ordinary shares (excluding Treasury Shares) : 847,820,864
No. of Treasury Shares and percentage : 14,197,000 (1.67%)
DistriBution oF orDinAry shArehoLDinGs
size of shareholdings
no. of
ordinary
shareholders %
no. of ordinary
shares (excluding
treasury shares) %
1 - 999 329 2.00 162,424 0.02
1,000 - 10,000 12,797 77.81 57,395,193 6.77
10,001 - 1,000,000 3,289 20.00 105,502,737 12.44
1,000,001 and above 31 0.19 684,760,510 80.77
Total : 16,446 100.00 847,820,864 100.00
tWenty LArGest orDinAry shArehoLDers
s/no. name
no. of
ordinary shares %
1. Olivia Lum Ooi Lin 267,351,211 31.53
2. DBS Nominees Pte Ltd 145,878,333 17.21
3. HSBC (Singapore) Nominees Pte Ltd 63,725,374 7.52
4. Citibank Nominees Singapore Pte Ltd 59,283,862 6.99
5. Raffles Nominees (Pte) Ltd 25,417,063 3.00
6. Nomura Securities Singapore Pte Ltd 16,285,819 1.92
7. DBSN Services Pte Ltd 12,813,773 1.51
8. Murugasu Deirdre 12,306,267 1.45
9. United Overseas Bank Nominees Pte Ltd 11,200,090 1.32
10. DB Nominees (S) Pte Ltd 9,998,792 1.18
11. BNP Paribas Securities Services Singapore Pte Ltd 5,991,641 0.71
12. Merrill Lynch (Singapore) Pte Ltd 5,654,211 0.67
13. UOB Kay Hian Pte Ltd 5,010,905 0.59
14. Yang Chyan Yeow Aylwin 4,420,000 0.52
15. OCBC Securities Private Ltd 4,238,521 0.50
16. Foo Hee Kiang 3,976,368 0.47
17. Yong Siew Yoon 3,750,000 0.44
18. OCBC Nominees Singapore Private Limited 3,527,473 0.42
19. Phillip Securities Pte Ltd 3,389,902 0.40
20. Bank of Singapore Nominees Pte Ltd 2,784,719 0.33
Total : 667,004,324 78.68
Approximately 57.64% of the Company’s 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.
HYFLUX LTD
ANNUAL REPORT 2011
135

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
STATISTICS OF SHAREHOLDINGS (CONT’D)
AS AT 22 MARCH 2012
6% cumuLAtive non-convertiBLe non-votinG perpetuAL cLAss A preFerence shAres
DistriBution oF preFerence shArehoLDinGs
size of shareholdings
no. of
preference
shareholders %
no. of
preference
shares %
1 - 999 22,309 98.57 1,932,800 48.32
1,000 - 10,000 311 1.37 588,740 14.72
10,001 - 1,000,000 14 0.06 1,478,460 36.96
Total : 22,634 100.00 4,000,000 100.00
tWenty LArGest preFerence shArehoLDers
s/no. name
no. of
preference
shares %
1. DBS Nominees Pte Ltd 598,240 14.96
2. Citibank Nominees Singapore Pte Ltd 247,420 6.19
3. HSBC (Singapore) Nominees Pte Ltd 144,770 3.62
4. Bank of Singapore Nominees Pte Ltd 136,250 3.41
5. Raffles Nominees (Pte) Ltd 92,830 2.32
6. United Overseas Bank Nominees Pte Ltd 71,590 1.79
7. BNP Paribas Nominees Singapore Pte Ltd 56,860 1.42
8. BNP Paribas Securities Services Singapore Pte Ltd 41,700 1.04
9. Tay Lee Lee 20,000 0.50
10. E M Services Pte Ltd 17,000 0.43
11. Wee Hian Ann 16,590 0.41
12. Morgan Stanley Asia (Singapore) Securities Pte Ltd 12,000 0.30
13. OCBC Nominees Singapore Private Limited 11,610 0.29
14. Committee of The Person and Estate of Lee Henrietta 11,600 0.29
15. China Taiping Insurance (Singapore) Pte Ltd 10,000 0.25
16. DB Nominees (S) Pte Ltd 9,910 0.25
17. Ronny Sim 8,610 0.22
18. ABN AMRO Nominees Singapore Pte Ltd 8,500 0.21
19. Olivia Lum Ooi Lin 8,020 0.20
20. Foo Hee Kiang 8,000 0.20
136
Total : 1,531,500 38.30

SUBSTANTIAL ORDINARY SHAREHOLDERS
AS AT 22 MARCH 2012
name of shareholder Direct interest Deemed interest %
Olivia Lum Ooi Lin 267,351,211 - 31.53
Mondrian Investment Partners Limited - 43,463,248¹ 5.13
Matthews International Capital Management, LLC - 43,140,030² 5.09
Matthews International Funds - 43,190,280³ 5.09
Note:
¹ 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 client’s own appointed custodian.
² Shares held for the benefit of accounts managed by Matthews International Capital Management, LLC.
HYFLUX LTD
ANNUAL REPORT 2011
³ The amounts reported includes shares reported by Matthews International Capital Management, LLC which acts as Investment
Advisor to the Matthews International Funds and its other clients.
137

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
HYFLUX GROUP OF COMPANIES
singapore
AcquaSpring Utility (Benghazi) Pte Ltd
AcquaSpring Utility (S) Pte Ltd
AcquaSpring Utility (Tobruk) Pte Ltd
AcquaSpring Utility (Tripoli East) Pte Ltd
Eflux Singapore Pte Ltd
Eflux SK Pte Ltd (in Members’ Voluntary
liquidation)
Eflux Vietnam Pte Ltd
Energy Life 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 Engineering (S) 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 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 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 SIP Pte Ltd
Hyflux Utility (India) Pte Ltd
Hyflux Utility (Indonesia) Pte Ltd
Hyflux Utility (HCCJ) 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 (HCHX) Pte Ltd
Hyflux Utility WWT (HCWT) Pte Ltd
Hyflux Utility WWT (ZY) Pte Ltd
Hyflux Utility WWTP (LP) Pte Ltd
Hyflux Water Trust
Hyflux Water Trust Management Pte Ltd
HyfluxShop Pte Ltd
Marmon Hyflux Investments Pte Ltd
MenaSpring Utility (S) Pte Ltd
MenaSpring Utility (Tlemcen) Pte Ltd
NewSpring Utility Pte Ltd
Sinolac (Singapore) Pte Ltd
TuaSpring Pte Ltd
china
Beijing Shouren Water Engineering Co., Ltd
Eflux Resources (Taizhou) Co., Ltd
Galaxy Operation and Management
(Shanghai) Co., Ltd
Hydrochem Engineering (Shanghai) Co., Ltd
Hyflux (Tianjin) Sewage Disposal Co., Ltd
Hyflux (Zunyi) Sewage Disposal Co., Ltd
Hyflux Caojie Sewage Disposal (Chongqing)
Co., Ltd
Hyflux Design Engineering (Shanghai) Co.,
Ltd
Hyflux Engineering (Shanghai) Co., Ltd
Hyflux Filtech (Shanghai) Co., Ltd
Hyflux GaoYang Sewage Disposal
138
(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 WT (Dafeng) Co., Ltd
Hyflux NewSpring (Dafeng) Co., Ltd
Hyflux NewSpring (Dezhou) Co., Ltd
Hyflux NewSpring (Funing) Co., Ltd
Hyflux NewSpring (Guanyun) Co., Ltd
Hyflux NewSpring Water Treatment (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 (Yangzhou) Co., Ltd
Hyflux NewSpring (Zunhua) Co., Ltd
Hyflux NewSpring Construction Engineering
(Shanghai) Co., Ltd
Hyflux NewSpring Sewage Disposal
(Guanyun) Co., Ltd
Hyflux NewSpring Sewage Disposal
(Rudong) Co., Ltd
Hyflux NewSpring Waste Water Treatment
(Funing) Co., Ltd
Hyflux NewSpring Waste Water Treatment
(Leping) Co., Ltd
Hyflux NewSpring Waste Water Treatment
(Mingguang) Co., Ltd
Hyflux NewSpring Water Treatment
(Mingguang) Co., Ltd
Hyflux Salt Industry Technology Development
(Tianjin) Co., Ltd
Hyflux Unitech (Shanghai) Co., Ltd
Hyflux Weituo Sewage Disposal (Chonqing)
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
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
British virgin islands
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.
india
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

CORPORATE INFORMATION
Board of Directors
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)
management committee
Olivia Lum Ooi Lin (Chairman)
Sam Ong
Cho Wee Peng
Winnifred Heap
Oon Jin Teik
Dr Andrew Ngiam
Foo Hee Kiang
Peter Wu
company secretary
Lim Poh Fong
Registered Office
Hyflux Building
202 Kallang Bahru
Singapore 339339
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
Board Committees:
Audit committee
Lee Joo Hai (Chairman)
Rajsekar Kuppuswami Mitta
Gay Chee Cheong
Gary Kee Eng Kwee
nominating committee
Teo Kiang Kok (Chairman)
Olivia Lum Ooi Lin
Gay Chee Cheong
Christopher Murugasu
remuneration committee
Gay Chee Cheong (Chairman)
Teo Kiang Kok
Lee Joo Hai
Christopher Murugasu
risk management committee
Rajsekar Kuppuswami Mitta (Chairman)
Teo Kiang Kok
Lee Joo Hai
Simon Tay
HYFLUX LTD
ANNUAL REPORT 2011
139

DELIVERING INNOVATIVE SOLUTIONS
LEADING THE WAY
CORPORATE INFORMATION (CONT’D)
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
1 Raffles Place
#32-00 One Raffles Place
Singapore 048616
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
20 Collyer Quay
Tung Centre
Singapore 049319
Chang Hwa Commercial Bank Ltd,
Singapore Branch
No. 1 Finlayson Green, #08-00
Singapore 049246
Chinatrust Commercial Bank Co., Ltd,
Singapore Branch
1 Raffles Place #29-02/03
One Raffles Place
Singapore 048616
140
CIMB Bank Berhad, Singapore Branch
50 Raffles Place
#09-01 Singapore Land Tower
Singapore 048623
Citibank N.A.
8 Marina View
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
6 Shenton Way
DBS Building Tower One
Singapore 068809
First Commercial Bank, Singapore Branch
77 Robinson Road #01-01
Singapore 068896
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 Level 4
HSBC Building
Singapore 049320
Land Bank of Taiwan, Singapore Branch
80 Raffles Place
#34-01 UOB Plaza 1
Singapore 048624
Maybank
2 Battery Road
Maybank Tower #15-01
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 #11-00
Singapore 068912
Natixis, Singapore Branch
50 Raffles Place
#41-01 Singapore Land Tower
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
Marina Bay Financial Centre (Tower 1)
8 Marina Boulevard
Singapore 018981
State Bank of India
6 Shenton Way
#22-08 DBS Building Tower 2
Singapore 068809
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 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

NOTICE OF AGM, BOOK CLOSURE
AND APPENDICES
142
148
149
158
Notice of Annual General Meeting
Notice of Book Closure
Appendix 1
Appendix 2
HYFLUX LTD
ANNUAL REPORT 2011
141

NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Hyflux Ltd (“Company”) will
be held at 202 Kallang Bahru, Hyflux Building, Singapore 339339 on 26 April 2012 at 2.00p.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 2011 together with the Auditors’ Report thereon.
Resolution 2
To declare a final dividend of 2.1 Singapore cents per ordinary share (one-tier tax exempt) for
the year ended 31 December 2011 (previous year: 3.5 Singapore cents per ordinary share).
Resolution 3
To re-elect Mr. Teo Kiang Kok who retires in accordance with Article 89 of the Company’s
Articles of Association and who, being eligible, offers himself for re-election.
Resolution 4
To re-elect Mr. Christopher Murugasu who retires in accordance with Article 89 of the
Company’s Articles of Association and who, being eligible, offers himself for re-election.
Resolution 5
To re-elect Mr. Gary Kee Eng Kwee who retires in accordance with Article 88 of the Company’s
Articles of Association and who, being eligible offers himself for re-election.
Resolution 6
To re-elect Mr. Simon Tay who retires in accordance with Article 88 of the Company’s Articles
of Association and who, being eligible offers himself for re-election.
Resolution 7
To approve the payment of Directors’ fees of S$540,795 for the year ended 31 December 2011
(previous year: S$490,000).
Resolution 8
To re-appoint Messrs KPMG LLP as external auditors and to authorise the Directors to fix their
remuneration.
142

NOTICE OF ANNUAL GENERAL MEETING (CONT’D)
AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with
or without any modifications:
Resolution 9
HYFLUX LTD
ANNUAL REPORT 2011
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) (i) issue ordinary shares in the Company (“Ordinary Shares”) whether by way of
rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, “Instruments”) that
might or would require shares to be issued, including but not limited to the
creation and issue of (as well as adjustments to) 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 sub-paragraph
(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:
(a) new Ordinary Shares arising from the conversion or exercise of the
Instruments or any convertible securities;
(b) 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
143

NOTICE OF ANNUAL GENERAL MEETING (CONT’D)
144
(c) 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
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 10
That:
(1) authority be and is hereby given to the Directors to:
(a) 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
(b) make or grant offers, agreements or options that might or would require
preference shares referred to in sub-paragraph (a) above to be issued, not being
ordinary shares to which the authority referred to in Resolution 9 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 (a) above in pursuance of any offers,
agreements or options made or granted by the Directors while this Resolution was in
force; and
(2) (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 the earlier.
Resolution 11
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

NOTICE OF ANNUAL GENERAL MEETING (CONT’D)
(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 respectively, 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 shares in the capital of the Company
from time to time under 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 the earlier.
Resolution 12
That the Directors of the Company be and are hereby authorised to make purchases of 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 last Annual General Meeting of the Company or at the date of the EGM,
whichever is the higher, but excluding any shares held as treasury shares) at the price of up to
but not exceeding the Maximum Price as defined in the Company’s Circular dated 4 April 2008
and in accordance with the Guidelines on Share Purchase set out in Appendix 1 of the said
Circular and this mandate shall, unless revoked or varied by the Company in general meeting,
continue in force until the conclusion of the next Annual General Meeting of the Company is
held or is required by law to be held, whichever is the 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 2012
HYFLUX LTD
ANNUAL REPORT 2011
145

NOTICE OF ANNUAL GENERAL MEETING (CONT’D)
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 202 Kallang Bahru, Hyflux Building, Singapore
339339 not less than 48 hours before the time appointed for holding the Meeting.
(2) In relation to Resolution 3, Mr. Teo Kiang Kok, will upon re-election as a Director of the
Company, remain as Lead Independent Director, Chairman of the Nominating Committee
and a member of the Remuneration Committee and Risk Management Committee. Mr
Teo is considered a non-executive and independent director.
(3) In relation to Resolution 4, Mr. Christopher Murugasu, will upon re-election as a Director
of the Company, remain as a member of the Nominating Committee and Remuneration
Committee. Mr Murugasu is considered a non-executive and independent director.
(4) In relation to Resolution 5, Mr. Gary Kee Eng Kwee, will upon re-election as a Director of
the Company, remain as a member of the Audit Committee. Mr Kee is considered a nonexecutive
and non-independent director.
(5) In relation to Resolution 6, Mr. Simon Tay, will upon re-election as a Director of the
Company, remain as a member of Risk Management Committee. Mr Tay is considered a
non-executive and independent director.
(6) Ordinary Resolution 9 has been proposed for voting annually at the Company’s AGM
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, the Directors will be empowered from the date of this Meeting
until the date of the next AGM, or the date by which the next AGM 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 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 is passed and any subsequent consolidation or subdivision of
Ordinary Shares.
146

NOTICE OF ANNUAL GENERAL MEETING (CONT’D)
HYFLUX LTD
ANNUAL REPORT 2011
(7) Ordinary Resolution 10 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, the Directors will be
empowered from the date of this Meeting until the date of the next AGM, or the date by
which the next AGM 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
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 Resolutions
and such issue be on such other terms and condition as the Directors may deem fit.
(8) Ordinary Resolution 11 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 Resolutions, the Director will be empowered, from
the date of this Meeting until the next AGM, or the date by which the next AGM is required
by law to be held or such authority is varied or revoked by the Company in a general
meeting, whichever is the earlier, 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 shares in the capital of the Company from time to time under 2001
Scheme.
(9) Ordinary Resolution 12 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. Ordinary Resolution 12, if passed, will empower the Directors of the Company
from the date of this Meeting until the next AGM, or the date by which the next AGM is
required by law to be held, whichever is the 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 the Company’s Circular dated 4 April 2008. Please refer to Appendix 1 of this
Notice of AGM for details.
147

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 at 5.00 p.m. on 4 May 2012 for the preparation of
dividend warrants.
Duly completed registrable transfers of ordinary shares received by the Company’s 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 4 May 2012 will be registered to
determine ordinary shareholders’ entitlements to the said dividend. Members whose Securities
Accounts with The Central Depository (Pte) Limited are credited with the company’s ordinary
shares at 5.00 p.m. on 4 May 2012 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 26 April 2012, will be made on 17 May 2012.
148

APPENDIX 1
SUMMARY SHEET FOR RENEWAL OF SHARES PURCHASE MANDATE
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
27 April 2011, as at 15 March 2012 (the “Latest Practicable Date”), the Company had
purchased by way of market acquisition an aggregate of 13,697,000 ordinary shares
in the capital of the Company (the “Shares”), which are held in treasury. The total
consideration paid for the purchases was S$19,283,859.01 (inclusive of brokerage and
clearing fees of S$40,665.81). The highest price paid for the purchases was S$1.50 per
Share and the lowest price paid was S$1.05 per Share.
(B) RENEWAL OF THE SHARES PURCHASE MANDATE
The Ordinary Resolution No. 12, 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
HYFLUX LTD
ANNUAL REPORT 2011
Short-term speculation may at times cause the market price of the Company’s 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 Company’s 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.
149

APPENDIX 1 (CONT’D)
150
The Directors will ensure that the Shares purchases will not have any effect on the listing
of the Company’s securities including the Shares listed on the Singapore Exchange
Securities Trading Limited (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 company’s 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, 488,699,052 Shares (57.65%) of a total of
847,755,864 Shares issued by the Company are held by 16,527 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.
Any Shares purchases will:
(i) reduce the amount of the Company’s share capital where the Shares were
purchased or acquired out of the capital of the Company;
(ii) reduce the amount of the Company’s profits where the Shares were purchased
or acquired out of the profits of the Company; or

APPENDIX 1 (CONT’D)
HYFLUX LTD
ANNUAL REPORT 2011
(iii) reduce the amount of the Company’s 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 Company’s 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 under the Shares Purchase Mandate will
result in the purchase of 84,775,586 Shares.
4. An illustration of the impact of Shares purchases by the Company pursuant to the
Shares Purchase Mandate on the Group’s and the Company’s financial position is set
out below based on the following assumptions:
(a) audited accounts of the Group and the Company as at 31 December 2011;
(b) in full exercise of the Shares Purchase Mandate, 84,775,586 Shares were
purchased;
(c) the maximum price for the market purchases is $1.5593 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 the
aggregate is $132,190,571.
151

APPENDIX 1 (CONT’D)
152
Group
before
Shares
purchase
($’000)
Group
after
Shares
purchase
($’000)
Company
before
Shares
purchase
($’000)
Company
after
Shares
purchase
($’000)
As at 31 December 2011
Shareholders’ funds 920,591 788,400 656,310 524,119
Net assets value 935,567 803,376 656,310 524,119
Current assets 1,099,493 967,302 825,548 693,357
Current liabilities 356,223 356,223 226,988 226,988
Cash and cash equivalents /
(overdraft) 662,358 530,167 96,407 (35,784)
Number of shares (’000) 858,679 773,903 858,679 773,903
Financial Ratios
Net assets value per share
(cents) 60.6 50.2 29.8 16.0
Earnings per share (cents) 4.30 4.77 3.98 4.41
Gearing (times) 0.18 0.38 0.86 1.33
Current Ratio 3.09 2.72 3.64 3.05
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 2011 and are for illustration only. The results of the Group and the
Company for the financial year ended 31 December 2011 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 Company’s 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.
(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

APPENDIX 1 (CONT’D)
(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
Directors
Direct Interest Deemed Interest Total Interest
Number of Number of
Shares % Shares %
Number of
Shares %
Olivia Lum Ooi Lin 267,351,211 31.54 - - 267,351,211 31.54
Teo Kiang Kok - - 375,000 0.04 375,000 0.04
Lee Joo Hai - - - - - -
Gay Chee Cheong 1,000,000 0.12 - - 1,000,000 0.12
Christopher Murugasu 842,343 0.10 180,000 0.02 1,022,343 0.12
Rajsekar Kuppuswami Mitta - - - - - -
Simon Tay - - - - - -
Gary Kee Eng Kwee - - - - - -
NOTES:
HYFLUX LTD
ANNUAL REPORT 2011
(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
153

APPENDIX 1 (CONT’D)
154
Class A Preference Shareholdings 1
Directors
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
Lee Joo Hai - - - - - -
Gay Chee Cheong 12,000 0.3 - - 12,000 0.3
Christopher Murugasu 1,000 0.025 - - 1,000 0.025
Rajsekar Kuppuswami Mitta 20,000 0.5 - - 20,000 0.5
Simon Tay - - - - - -
Gary Kee Eng Kwee - - - - - -
NOTES:
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
31.54% to 35.04%. Ms Olivia Lum Ooi Lin’s 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. The Securities Industry Council has granted approval in-principle to exempt Ms Olivia
Lum Ooi Lin 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) the Circular contains advice to the effect that by voting for the Shares Purchase
Mandate, shareholders are waiving their rights to a general offer at the required
price from Ms Olivia Lum Ooi Lin and parties acting in concert with her, if any;
the names of Ms Olivia Lum Ooi Lin and her concert parties, if any, and the
voting rights of such persons at the time of resolution and after the proposed
Shares Purchases are disclosed in the Circular;
(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; and
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.

APPENDIX 1 (CONT’D)
(d) 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) the date on which the Shares Purchase Mandate expires; and
(ii) 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 six–month period.
If the Company ceases to buy back its Shares and the increase in the voting
rights held by Ms Olivia Lum Ooi Lin and her concert parties, if any, as a result
of the Shares Purchase at the time of such cessation is less than 1% in any
six-month period, Ms Olivia Lum Ooi Lin and her concert parties, if any, will be
allowed to acquire Shares. However, any increase in Ms Olivia Lum Ooi Lin
and her concert parties’ percentage of voting rights as a result of the Shares
Purchase will be taken into account together with any Shares acquired by Ms
Olivia Lum Ooi Lin and her concert parties, if any, (by whatever means) in
determining whether Ms Olivia Lum Ooi Lin and her concert parties, if any, have
increased their aggregate voting rights in the Company by more than 1% in any
six-month 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 right to a general offer by the
substantial shareholders at the Required Price.
(F) MISCELLANEOUS
HYFLUX LTD
ANNUAL REPORT 2011
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 Shares 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:
155

APPENDIX 1 (CONT’D)
156
“(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 2 of the Company’s Circular to shareholders dated
4 April 2008, a copy of which is annexed. 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 the aforementioned Appendix, the Shares Purchase Mandate
will expire on the earlier 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; and
(b) Paragraph 6(a) of the aforementioned Appendix, 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.
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 one month immediately preceding
the announcement of the Company’s full-year results and the period of two weeks
immediately preceding the announcement of its quarterly 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 the 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.

APPENDIX 1 (CONT’D)
(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 12 relating to the Shares Purchase
Mandate.
(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 12.
(J) TAXATION
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.
(K) DOCUMENTS FOR INSPECTION
HYFLUX LTD
ANNUAL REPORT 2011
Copies of the following documents may be inspected at the registered office of the
Company at 202 Kallang Bahru, Hyflux Building, Singapore 339339 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 2011.
157

APPENDIX 2
GUIDELINES ON SHARES PURCHASES
1. SHAREHOLDERS’ APPROVAL
158
(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) 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.
(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) .

APPENDIX 2 (CONT’D)
(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
HYFLUX LTD
ANNUAL REPORT 2011
(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 takeover
rules;
(v) whether the purchase of Shares, if made, would have any effect on the
listing of the Company’s securities on the Official List of SGX-ST; and
(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.
159

APPENDIX 2 (CONT’D)
160
(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) 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.
7. 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
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 Company’s profits where the Shares were purchased
or acquired out of the profits of the Company; or
(iii) reduce the amount of the Company’s share capital and profits proportionately
where the Shares were purchased or acquired out of both the capital and the
profits of the Company;

APPENDIX 2 (CONT’D)
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 Company’s 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 acceptance of an offer, or
within such time period that may be prescribed by the SGX-ST from time to time.
(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. SUSPENSION OF PURCHASE
HYFLUX LTD
ANNUAL REPORT 2011
(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 Company’s
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.
161

HYFLUX LTD
Company Registration No. 200002722Z
(Incorporated in the Republic of Singapore with limited liability)
PROXY FORM
(Please see notes overleaf before completing this Form)
I/We, (Name and NRIC No.)
of (Address)
being a member/members of Hyflux Ltd (the “Company”), hereby appoint:-
Name NRIC/Passport No. Proportion of Shareholdings
Address
and/or (delete as appropriate)
No of Shares %
Name NRIC/Passport No. Proportion of Shareholdings
Address
No of Shares %
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 26 April 2012 at 2.00pm 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
Ordinary Business
1 Adoption of Directors’ Report and Audited Accounts
2 Declaration of Dividends
3 Re-election of Teo Kiang Kok as Director
4 Re-election of Christopher Murugasu as Director
5 Re-election of Gary Kee Eng Kwee as Director
6 Re-election of Simon Tay as Director
7 Approval of Directors’ fees
8 Re-appointment of Auditors
Special Business
9 Authority to issue shares up to 50 per centum (50%) of
the issued ordinary shares in the capital of the Company
10 Renewal of Preference Share Mandate
11 Authority to issue shares under Hyflux Employees’ Share
Option Scheme 2001 and Hyflux Employee’s Share
Option Scheme 2011
12 Renewal of Share Purchase Mandate
For* Against* No. of
Votes For**
To be used in the
event of a poll
No. of
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 ____________________ 2012
Signature(s) of Shareholder(s), Common Seal of Corporate Shareholder
IMPORTANT:
1. For investors who have used their CPF monies to buy Hyflux Ltd’s 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.
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 Hyflux Building, 202 Kallang
Bahru, Singapore 339339 not less than 48 hours before the time appointed for the Meeting.
fold along this line (1)
fold along this line (2)
The Company Secretary
HYFLUX LTD
Hyflux Building
202 Kallang Bahru
Singapore 339339
Affix
Postage
Stamp
4. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where
the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its 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
Hyflux Building
202 Kallang Bahru
Singapore 339339
www.hyflux.com
Company reg. no.: 200002722Z